Alaska Air faces competitive capacity pressure in early 2016 after making its own ASM push in 2015

Alaska Air Group is planning capacity expansion of 8% in 2016 after growing nearly 11% in 2015, including a 12.5% expansion in 4Q2015. Much of the push during the final three months of 2015 is additions to existing markets where Alaska concludes demand remains robust.

Although Alaska's YE2015 capacity growth may be outsized compared with other US airlines, its ASM expansion between 2009 and 2014 was in the mid to high single digits, and its 2016 projections are in line with those trends. It also remained profitable during that time period, which featured soaring fuel prices and a global economic downturn.

During early 2016 Alaska is facing some headwinds from capacity growth by its competitors, but concludes much of that growth is the annualisation of new route launches that occurred in 2H2015. With the competitive onslaught Alaska has endured in Seattle during the last couple of years, it is clear the airline can handle the industry capacity growth in its markets. Its own network development during 2015 reflects a strengthening of its presence in Seattle in both small and large markets to leverage both connecting and local traffic.