Alaska sees flat costs in 2012

Washington DC
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Alaska Airlines has updated guidance to reflect flat costs in 2012 compared to a year earlier, after a gradual increase in costs during the second quarter.

The Seattle-based carrier expects costs per available seat mile (CASM) excluding fuel and special items to be 8.5 to 8.55 cents for the full year, in an investor update released today. This is up from previous guidance that unit costs would be 8.4 to 8.45 cents for the year.

CASM is expected to increase by 0.5% to 1.5% year-on-year to between 8.2 to 8.3 cents during the third quarter. They increased by 0.4% to 8.38 cents in the second quarter.

Alaska expects capacity to increase by about 6.5% y-o-y in the third quarter after a 6.3% jump during the three months ending in June.

Alaska maintains guidance that capacity will increase 6% for the full year, in the update.

Forward bookings are flat y-o-y in July, up 1.5 percentage points in August and one point in September, says Brandon Pedersen, chief financial officer of Alaska, during an earnings call today. This is down from up three points in July and 3.5 points in August, according to guidance released in June.

Alaska expects to pay an average of $3.09 per gallon for fuel in the third quarter.