Alaska Air Group, parent company of two SeaTac-based airlines, Alaska Airlines and Horizon Air, reported record third-quarter profits Thursday.
Net income of $118.1 million, or $3.21 a share, surpassed both last year’s third-quarter results of $83 million or $2.33 a share and average analyst expectations of $3.11 a share.
“We are pleased to report our best quarter ever, with record earnings driven by higher traffic and load factors,” Alaska Chairman Bill Ayer said. “We couldn’t be more proud of our people for their commitment to operating our flights safely and delivering on-time performance and customer service.”
Alaska Airlines delivered that on-time performance again in the third quarter recording the best on-time performance among the 10 largest domestic carriers in 16 of the past 17 months.
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Alaska’s profits came as the company embarked on its plan to use some of its accumulated cash to pay off debt. The company has prepaid $115.5 million this year through Sept. 15. The airline holding company plans to prepay $200 million.
Even so, the company’s cash and marketable securities on hand rose to $1.32 billion at the end of this quarter, compared with $1.19 billion a year earlier.
Nearly every indicator on the company’s financial report improved during the past year.
Operating income rose from $136.7 million to $201.5 million in the third quarter.
Passenger traffic increased for Alaska Airlines by 11.2 percent.
Passenger load factor for the mainline carrier jumped by 3 percentage points to 85.3 percent. The load factor is the percentage of seats filled with paying passengers.
The airline’s average number of full-time employees dropped by 2.9 percent to 8,737 despite the higher traffic numbers.
Average trip length rose to 1,089 miles, compared with 1,044 miles.
Meanwhile, at regional carrier Horizon Air, passenger traffic, load factor and yield per passenger mile all rose modestly as capacity dropped 2.3 percent.
The holding company is restructuring Horizon to introduce new efficiencies. Beginning next year, Alaska Airlines will take over that airline’s marketing and route planning. Horizon will fly routes that its sister airline directs at a fixed rate negotiated between the two.