Alaska Air sees black in Q1, while rivals see red

Posted: Friday, April 23, 2010

ATLANTA - The parent of Alaska Airlines and Horizon Air did what several of its larger rivals couldn't in the first three months of the year: turn a profit.

But fuel prices have risen sharply compared to a year ago, and Alaska Air Group Inc. wasn't immune. It said Thursday it is raising its fee for a first checked bag by $5.

Alaska Air Group, based in Seattle, said it earned $5.3 million, or 15 cents a share, in the first quarter, compared to a loss of $19.2 million, or 53 cents a share, a year earlier.

Excluding special items, its profit was 36 cents a share in the latest quarter.

Revenue rose 11.8 percent to $829.9 million from $742.4 million a year earlier.

Analysts expected an adjusted profit of 35 cents a share on revenue of $816.4 million.

The carrier's low costs and largely domestic focus helped it weather the economic downturn and put it in a good position to capitalize on the ongoing rebound.

However, the parent company said it paid $207.3 million for aircraft fuel in the first quarter, compared to $157.7 million a year earlier. That was a 31.5 percent increase year-over-year.

Alaska Airlines and Horizon Air announced Thursday changes to several service fees that are effective for travel on or after June 16 for tickets purchased beginning May 1.

Alaska and Horizon will charge $20 for each of a passenger's first three checked bags. That is a $5 increase for the first checked bag, a $5 decrease for the second, and a $30 decrease for the third. Some customers remain exempt from fees for the first two checked bags, including elite frequent fliers and first-class passengers.

The two airlines also are lowering fees for unaccompanied minors and changing their baggage service guarantee from 25 minutes to 20 minutes. Customers whose luggage is not at baggage claim within 20 minutes after their flight parks at the gate will receive their choice of 2,000 Alaska Airlines frequent flier reward miles or $20 off a future flight.

The airlines said that customers who want to change their flight within six hours of departure will pay a $25 same-day confirmed fee, if space is available on the requested flight. Those wishing to change their flight outside of that six-hour window must pay the difference in fare plus any applicable change fee.

Under the previous policy, these customers could pay this $25 same-day confirmed fee or stand by for free.

Also, effective May 12, customers will no longer be able to hold reservations for 24 hours without payment when booking directly with Alaska or Horizon. The airlines will, however, offer customers one free change or a full refund within 24 hours of purchase on all tickets.

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