SEATTLE – Alaska Air Group Inc. posted a third-quarter loss Tuesday, citing hefty charges and a doubling of jet fuel costs that offset a rise in both revenue and passenger traffic. The news sent the company’s shares sliding more than 7 percent.
For the three-month period ended Sept. 30, the Seattle-based parent company of Alaska Airlines and Horizon Air posted a loss of $17.4 million, or 44 cents per share, reversing a year-ago profit of $90.2 million, or $2.71 per share.
The results included charges stemming from the early buyout of MD-80 aircraft leases, severance costs for hundreds of clerical, office and passenger service employees, and fuel-hedging losses.
The 2005 results included fuel-hedging gains, a refund of Mexico navigation fees and an adjustment of previously recorded restructuring charges.
Excluding the one-time items, the company would have posted earnings of $77.9 million, or $1.93 per share, compared with $71.5 million, or $2.16 per share, a year ago. Analysts polled by Thomson Financial forecast earnings of $2.10 per share, excluding one-time items.
Revenue jumped almost 11 percent to $935.7 million, missing analysts’ consensus estimate of $938.5 million.
Shares of Alaska Air Group tumbled $3.20, or 7.2 percent, to close at $41.36 on the New York Stock Exchange. The stock has traded between $29.31 and $45.85 over the past year.
Bill Ayer, Alaska’s chairman and chief executive, said gains in revenue per available seat mile – a key industry measure – weakened during the third quarter after accelerating in the second quarter.
“The revenue environment has softened somewhat and bears watching, which underscores the importance of continuing to execute our plan for achieving sustained profitability,” Ayer said in a conference call with analysts. “We need to continue reducing costs, improving processes and growing in order to offer our customers a product they prefer at a price they’re willing to pay.”
Quarterly passenger traffic for Alaska Airlines, the nation’s ninth-largest carrier, rose 6 percent on a capacity increase of 5.6 percent. Load factor, an industry measure of occupancy levels, rose to 79.2 percent from 79 percent a year ago.
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