Alaska Air (ALK) Announces Solid June Traffic Statistics

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Alaska Air Group, Inc . ALK reported robust traffic results for June. Traffic, measured in revenue passenger miles (RPMs), increased 7.3% to 5.05 billion.

On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 6.1% to 5.72 billion. Also, load factor or percentage of seats filled by passengers expanded 100 basis points (bps) to 88.3% as traffic growth outpaced capacity expansion.

In the first six months of 2018, the carrier generated RPMs of 26.89 billion (up 6.4% year over year) and ASMs of 32.31 billion (up 7.7% year over year). However, load factor declined 100 bps to 83.2%.

Alaska Air Group, Inc. Price

Alaska Air Group, Inc. Price | Alaska Air Group, Inc. Quote

Q2 Outlook

For the second quarter of 2018, the carrier expects capacity to increase approximately 8% while cost per ASM excluding fuel and special items is projected to rise around 3.5%. Meanwhile, fuel cost per gallon is anticipated to increase nearly 35% to $2.31. Additionally, revenue per ASM is estimated to decline in the 4-5% range.

Detailed results will be available on Jul 26.

Full-Year Outlook

For 2018, Alaska Air forecasts capacity to expand approximately 6.2-6.5% whereas unit costs, excluding fuel and special items, are projected to rise nearly 3.5%.

Zacks Rank & Key Picks

Alaska Air holds a Zacks Rank #5 (Strong Sell).

Some better-ranked stocks in the broader Transportation sector are Expeditors International of Washington, Inc. EXPD , Atlas Air Worldwide Holdings AAWW and Ryder System, Inc. R . While Atlas Air Worldwide sports a Zacks Rank #1 (Strong Buy), Expeditors and Ryder carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Shares of Expeditors and Atlas Air Worldwide have rallied more than 22% and 16%, respectively, in a year. While Ryder boasts an impressive earnings history, having outperformed the Zacks Consensus Estimate in each of the trailing four quarters with an average beat of 3.9%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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