Alaska Air Group has reported a third-quarter net income of $73 million, down from $236 million a year prior. This result includes Alaska Airlines and its subsidiaries Hawaiian Airlines and Horizon Air.
The Group published its third-quarter results early on Thursday morning (October 23), but was hit by an IT outage later that day. A ground stop was imposed across both Alaska and Horizon, and hundreds of flights were cancelled. The ground stop was not lifted until about 11:30pm PT.
As a result, the Group cancelled its earnings call that was scheduled for today, and has not yet provided an estimate impact on fourth-quarter earnings. In July, the airline had grounded all of its flights for three hours after a hardware issue at a data centre.
The Group reported total operating revenues of $3.8bn for the quarter, soaring 23% compared to the same period last year. This was comprised of a 21% increase in passenger revenues to $3.4bn; a 17% increase in loyalty programme revenue, totalling $200 million; and $142 million in cargo revenue, up 78%.
However, total operating expense growth outpaced revenue growth, rising 32% to $3.6bn. This led to a 57% drop in operating income, which totalled $148 million.
For the fourth quarter, capacity is expected to be up 2% to 3% compared to last year. Unit revenues and unit costs excluding fuel are forecast to be up low single digits, while adjusted earnings per share (EPS) is set to be at least $0.40.
Full-year capacity is expected to be up around 2%. Unit revenues were guided to be up low single digits and unit costs excluding fuel up mid-single digits. Earnings are expected to be up at least $2.40 per share.
