Alaska Air Group’s capacity growth
For July 2016, Alaska Air Group’s (ALK) capacity increased by 9.6% year-over-year (or YoY). After an average growth of 13% in 1Q16, its growth slowed to 11% in 2Q16 and is slowing further in the third quarter. Through July 2016, ALK’s average capacity growth was 11.6% YoY.
Alaska Air Group’s mainline capacity has tracked the group’s performance. For July 2016, ALK’s mainline capacity grew by 9.4% YoY. For the second quarter of 2016, its mainline capacity growth averaged 12% and for the first quarter of 2016, its capacity growth averaged 10%.
Year-to-date through July 2016, ALK’s mainline capacity grew by 10.7% YoY, slightly slower than the group’s capacity growth.
Alaska’s regional capacity, mainly operated by subsidiary Horizon Air, has grown at a much higher rate in 2016. The pace has slowed down in July. For July 2016, regional capacity grew by 11.3% YoY whereas YTD through July 2016, its regional capacity has grown by 20.2% YoY.
What to expect
Alaska Air Group (ALK) expects its capacity growth to slow down to 5% YoY for the remaining half of 2016. This would take 2016’s full-year growth to ~8% YoY.
Although this growth is slower than ALK’s 2015 growth, it is still higher than the capacity growth guidance for its legacy peers American Airlines (AAL), Delta Air Lines (DAL), and United Continental Holdings (UAL). The remaining three carriers are expected to grow their 2016 capacity by ~2%.