Alaska Air Cargo’s 2018 results show cargo revenue up, Group net income down

Alaska Air Group released its 2018 results, which show that net income fell from 2017 to 2018, but cargo capacity and revenue is on the rise.

While the airline has been adjusting to its merger with Virgin America and endured some temporary associated costs, it has proven that it is strengthening its foothold in airfreight. It increased its operating revenues from cargo during the fourth quarter by 24 percent, year-over-year, from $42 to $52 million. And zooming out to the full year, cargo revenues increased from $175 to $198 million, a 14 percent increase.

Rick Bendix, manager of marketing and business development, cargo, at Alaska Airlines, told Air Cargo World that since the carrier began operating all three of its 737-700BDSFs in March, it operated more than 5,900 freighter flights during 2018, which helped Alaska Air Cargo increase the cargo moved across its network by 12 percent in 2018 compared to 2017. With the added capacity in the bellies of Airbus passenger aircraft from the Virgin America fleet, Alaska increased cargo capacity within its network by 20 percent during the fourth quarter.

For all Alaska Air Group operations, the airline’s reported net income for the fourth quarter of 2018 was $23 million, a sharp contrast to the $315 million figure reported during the same period in 2017. However, the airline said that merger-related costs, special charges and mark-to-market fuel hedging contributed significantly to the decline. Taking those factors into account, its adjusted net income for the fourth quarter of 2018 was $93 million, a five percent increase from $88 million in 2017.

Zooming out to look at the full 2018 year, reported net income was $437 million compared to $960 in 2017. But taking the above-named factors into account, adjusted net income of $554 was still down significantly, by about 42 percent, compared to the full 2017 year, when the company reported $791 million in adjusted net income.

Looking forward, CEO Brad Tilden was optimistic, stating, “In 2018, we achieved the vast majority of our integration milestones and passed through an inflection point in our financial performance,” suggesting that many of the Virgin America integration pains affecting Alaska’s net income are now behind the company.