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Alaska Air traffic growth down in January, capacity growth strong

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Growth in passenger traffic

Alaska’s revenue passenger miles (or RPM) increased by 7.9% to 2,496 million in January, lower than the 9.1% growth recorded in December. This was driven by a 9.3% rise in revenue passengers. Passenger growth in 2014 was 6.8%, driving traffic up by 6.5% to 30,712 million from 28,833 million in the previous year. For more information, refer to Alaska Airline Group fundamentally strong, cheap.

In December, Alaska reported the highest traffic growth among its peers, but growth slowed during January. JetBlue Airways (JBLU) and Southwest Airlines (LUV) reported higher growth rates than Alaska Air Group (ALK) in January.

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Capacity and utilization

Alaska’s capacity increased by 10.4% year-over-year in January 2015, lower than the 12% recorded in December. Alaska’s capacity increased from 2,807 million in January 2013 to 3,100 million in January 2015. For the full year 2014, Alaska recorded the highest capacity and traffic growth of 7.1% and 6.5%, respectively.

In January, JetBlue Airways (JBLU) recorded the highest year-over-year growth in capacity with 15.5%, followed by Alaska Air Group’s (ALK) 10.4%, Southwest Airlines’s (LUV) 10.2%, Delta Air Lines’s (DAL) 6.2%, and United Continental Holdings’s (UAL) 1.4%. American Airlines’s (AAL) capacity declined during the month. However, American’s passenger load factor declined from 82.4% to 80.5% in spite of an increase in traffic.

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

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

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