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Alaska reports strong growth in traffic and capacity in October

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Growth in passenger traffic

In October 2014, Alaska Airlines’ (ALK) revenue passenger mile (or RPM) increased by 10% to 2,459 million from 2,236 million in October 2013. This was driven by a 8.6% rise in the number of revenue passengers. The year-to-date growth in passengers reached 6.4%, driving RPM up by 6% to 25,536 million from 24,088 million in the previous year.

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Capacity and capacity utilization

Alaska’s capacity increased by 10.9% year-over-year, increasing from 2,670 million to 2,962 million in October 2014. On a year-to-date basis, the airline’s capacity increased by 6.5% to 29,884 million ASMs.

Alaska Airlines had the highest year-over-year capacity growth of 10.9% in October, followed by JetBlue’s (JBLU) 7.6% and Delta’s (DAL) 3.6%. Capacity growth for United (UAL) was 0.7%, American (AAL) was 0.5%, and Southwest (LUV) was 0.4%. However, this resulted in a decreased load factor (or capacity utilization) during the month. Load factor decreased to 83% in October 2014 from 83.7% in October 2013, in spite of strong growth in traffic. The year-to-date load factor also decreased by 0.3% to 85.5%.

Investors can gain exposure to airline stocks by investing in ETFs that hold airline stocks, such as the iShares Transportation Average ETF (IYT) and the SPDR S&P Transportation ETF (XTN).

For a comprehensive company overview of Alaska Airlines, read Market Realist’s series An investor’s guide to Alaska Airlines’ operations.

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