Alaska Air Group reports fourth quarter 2019 and full-year results; raises dividend 7%

victoria@aviationnews-online.com
By victoria@aviationnews-online.com January 29, 2020 16:20

Alaska Air Group reports fourth quarter 2019 and full-year results; raises dividend 7%

Alaska Air Group has reported net income of $181 million, or $1.46 per diluted share for the fourth quarter, compared to fourth quarter 2018 net income of $23 million, or $0.19 per diluted share. For the full year 2019, net income was $769 million, or $6.19 per diluted share, up from $437 million, or $3.52 per diluted share in 2018.

Alaska paid a $0.35 per share quarterly cash dividend in the fourth quarter, bringing total dividends paid in 2019 to $173 million. The airline group also repurchased a total of 1,192,820 shares of common stock for approximately $75 million in 2019.

The group generated approximately $1.7 billion of operating cash flow, and used $696 million for capital expenditures, resulting in $1 billion of free cash flow in 2019, representing free cash flow conversion of 133%.

Alaska group grew passenger revenues by 8% compared to the fourth quarter of 2018, and by 6% compared to full-year 2018.

The group has also achieved its goal of 75% repayment on the $2 billion debt borrowed to fund the acquisition of Virgin America, driving its debt-to-capitalization ratio to 41% at the end of 2019, from 47% at the end of 2018.

Alaska has announced a 7% increase in the quarterly dividend, from $0.35 per share to $0.375 per share. This is the seventh time the company has raised the dividend since initiating the quarterly dividend in July 2013, with a cumulative increase of 275% since that time. 

A highlight in the past year was the agreement with Alaska technicians, represented by the Aircraft Mechanics Fraternal Association, which ratified an integrated seniority list and a transition agreement, including a two-year contract extension, in July 2019. 

Alaska’s clerical, office, and passenger service, and Alaska’s ramp and stores employees, both represented by the International Association of Machinists, each ratified new five-year agreements in August 2019.

The group added four Boeing 737-900ER aircraft and two Airbus A321neo aircraft in 2019, as well as four Embraer 175 (E175) aircraft to the regional operating fleet.

“When we announced our intention to purchase Virgin America in the spring of 2016, we launched a body of work that was designed to make Alaska the ‘Go To’ airline for people living up and down the West Coast,” said Brad Tilden, Alaska’s CEO. “2019 was a fantastic year as we completed the majority of that work and began to see significant returns from our investment.”

victoria@aviationnews-online.com
By victoria@aviationnews-online.com January 29, 2020 16:20