Alaska Air's Q3 Earnings Report Confirms Turnaround Progress
On Thursday, Alaska Air Group (NYSE: ALK) became the latest airline to post a hefty loss for the third quarter: traditionally the most profitable part of the year for many airlines. Despite the weak headline numbers, Alaska's Q3 performance represented another step toward returning to health. Between its solid balance sheet, improving demand trends, and abundant cost-cutting opportunities, the Alaska Airlines parent is poised for a strong earnings recovery over the next several years.
Alaska Airlines continued to restore capacity during the third quarter after making sharp cuts in response to the COVID-19 pandemic earlier this year. That said, capacity remained significantly lower than year-ago levels last quarter -- down 55.1% -- compared to a 74.6% year-over-year decrease a quarter earlier. Alaska has also continued to block middle seats, which isn't counted in these capacity reduction figures.
Considering how few seats were available for sale, Alaska's 70.7% revenue decline (to $701 million) last quarter doesn't seem so bad. This beat the average analyst estimate by more than 3%. That result also marked a significant improvement relative to the airline's 81.6% revenue decline in the second quarter.
Source Fool.com
