Alaska ups capacity guidance for 2014

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Alaska Air Group anticipates consolidated capacity to grow by about 6% in 2014, as it prepares to expand in Salt Lake City and into more midcon markets.

The Seattle-based carrier previous anticipated about 5.5% capacity in 2014, a number that chief financial officer Brandon Pedersen reiterated in comments at a JP Morgan Aviation conference in New York five days ago.

His comments were in response to questions about how the Salt Lake City expansion – 11 new flights beginning in June – and new midcon routes from Seattle Tacoma International to Detroit, New Orleans and Tampa from June and September would not impact capacity guidance.

“We are not growing overall system capacity,” Pedersen said on 10 March. “This is solely reallocation stuff.”

Alaska only plans to increase its fleet by two aircraft in 2014, however, all of its 10 scheduled deliveries are Boeing 737-900ERs that are larger than the 737-700s and 737-800s that they replace. In addition, it is in the midst of a seat retrofit programme that will add up to 11 seats to 737-800 and 737-900ER aircraft that are already in its fleet.

Cost per available seat mile (CASM) excluding fuel and special items guidance is down 0.5 percentage points to a roughly 0.5% increase during the year, according to an investor update released today.

In the first quarter, consolidated CASM excluding fuel and special items is expected to increase by about 2% to 8.75 cents to 8.80 cents. This is 3.5 percentage points lower than the expected increase that Pedersen outlined in January.

Capacity guidance remains unchanged at a 4.5% increase during the quarter.

Advance bookings are down one percentage point in March, and up 0.5 points in both April and May compared to the same months in 2012, according to the update.