Alaska Air Group, parent of Alaska Airlines and regional subsidiary Horizon Air, made a net loss of $70.3 million last year - including $28.9 million in the last quarter - after taking charges totalling $71.9 million relating to its frequent flyer scheme. Seattle-based Alaska Air, which reported a net profit of $134 million in 1999, also saw fuel costs rise $125 million year-on-year. Group sales were $2.18 billion, up 4.6%.
Alaska Airlines had targeted traffic growth of 6.6% for the year, but was forced to drop capacity expansion plans following the crash of a McDonnell Douglas MD-80 last January. It ended the year with zero growth, and this pushed up unit costs. Alaska Airlines shed two 150-seat MD-80s last month and will dispose of two more this year, but still aims to grow capacity by 10% this year, with the arrival of the first of its 10 ordered 174-seat Boeing 737-900s.
Alaska Airlines' operating costs were also inflated by "increased labour and maintenance costs" in the wake of the US Federal Aviation Administration investigation which followed the crash. The airline had sales of $1.75 billion, up 4.1%, with an operating loss of $13.6 million against a $176.3 million profit in 1999. Regional subsidiary Horizon had sales of $443.5 million, up 6.6%, taking an operating loss of $5.8 million (impacted by aircraft retirement ahead of its transition to Bombardier Dash 8 Q400 turboprops and CRJ700 regional jets), after a $25.5 million profit in 1999.
Source: Flight International
