Alaska Air Group’s capacity growth
In June 2016, Alaska Air Group’s (ALK) capacity increased by 11.7% YoY (year-over-year). After an average growth of 13% in the first quarter of 2016, capacity growth slowed down to 11% in the second quarter of 2016. From January through June 2016, ALK’s average capacity growth was 12% YoY.
Alaska Air Group’s mainline capacity has tracked the group’s performance. For June 2016, ALK’s mainline capacity grew by 11% YoY. For the second quarter of 2016, mainline capacity growth averaged 12%, and for the first quarter of 2016, capacity growth averaged 10%. From January through June 2016, ALK’s mainline capacity grew by 11% YoY, which was closer to the group’s capacity growth.
Alaska Air Group’s regional capacity, mainly operated by its subsidiary Horizon Air, has grown at a much higher rate in 2016. From January through June 2016, regional capacity grew by 22.1% YoY. This is a significant change from the comparable period in 2015, when regional capacity grew by only 5.6% YoY.
What to expect
For 2Q16, Alaska Air Group’s YoY capacity growth of 11.1% was slightly higher than the expected growth of 10.8%. The company expects capacity growth to slow down to 5% YoY for 2H16. This would take 2016’s growth to ~8% YoY.
Although this growth is slower than ALK’s 2015 growth, it’s still higher than the capacity growth guidance for its legacy peers American Airlines (AAL), Delta Air Lines (DAL), and United Continental Holdings (UAL). For details on Delta Air Lines’ June 2016 performance, read How Did Delta Air Lines Fare in June 2016?
In the next part of this series, we’ll discuss Alaska Air Group’s traffic.