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Alaska Air Group Traffic Rises in October, Load Factor Dips

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Alaska Air Group Inc. (ALK - Free Report) recently reported traffic statistics for October. Traffic, measured in revenue passenger miles (RPMs), increased 11% to 4.37 billion.

On a year-over-year basis, consolidated capacity (or available seat miles/ASMs) rose 11.6% to 5.21 billion. However, load factor or percentage of seats filled by passengers contracted 40 basis points (bps) to 83.8% as capacity expansion outpaced traffic growth.

On a year-to-date basis, Alaska Air Group generated RPMs of 40.61 billion (up 7% year over year) and ASMs of 48.22 billion (up 6.6% year over year). Load factor stood at 84.5% compared with 84.2% in the first 10 months of 2016.

 

Alaska Air Group has been making continuous efforts to expand its operations. Toward this end, the airline recently announced plans to start operating daily flights connecting Seattle with Pittsburgh. These nonstop flights are anticipated to be operational from Sep 6, 2018 and will be the first of its kind to connect the two popular destinations.

On the other hand, this Zacks Rank #5 (Strong Sell) company has announced its decision to stop Cuba operations. The carrier will operate its last Los Angeles-Havana flight on Jan 22, 2018. The tweaked Cuba policy announced by President Donald Trump earlier this month might have influenced Alaska Air Group's decision. Notably, the new policy prohibits individual travel to the island nation among other clauses. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
 
Also, Cuba has ceased to be an attractive site for U.S.-based carriers due to lower-than-expected demand. The likes of American Airlines Group (AAL - Free Report) and JetBlue Airways (JBLU - Free Report) have already trimmed their services to the nation. Plus, Frontier Airlines and Spirit Airlines (SAVE - Free Report) have terminated their flights to Cuba for the same reason.

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