Alaska Air Group's profits plunged by 45% in the first quarter year-over-year, although the parent of Alaska Airlines and Horizon Air was pleased to post a positive earnings result despite a soaring fuel bill.
Net income excluding special items in the first quarter declined from $74.2 million in 2010 to $40.8 million this year, Alaska Air says today. The net amount excludes a $12.5 million after tax, mark-to-market fuel hedge gain.
The company remained profitable in a typically weak first quarter even though its single-largest expense item - aircraft fuel - soared 63.9% year-over year to $318.8 million. The economic fuel cost per gallon increased 18.8% to $3.41.
At the same time, total operating revenues climbed only 7.7% in the first quarter to $1.04 billion. Overall expenses increased by 16.3% to $966.9 million.
The company's operating performance also showed across the board improvement. Passenger revenue per available seat mile grew by 4.7% to 12.94 cents, while cost per available seat mile excluding fuel increased only 0.1% to 8.82 cents.
Alaska Air increased capacity by 3.3% compared to the same period last year, with load factors still growing 2.6 percentage points to 84.9%.
The company's cash position remained almost stable with $1.14 billion in reserve.