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Alaska Air Group continues network diversification as its financial foundation remains rock solid

Analysis

Alaska Air Group continues to round out its network with new transcontinental fights in late 2015, continuing its strategy of eastward expansion as its network in the Pacific Northwest continues to reach a certain level of maturity.

The company is also adding new international service from Los Angeles to Costa Rica and transborder flights from Orange County to Mexican leisure destinations. Alaska's expansion is part of its estimated 10% capacity growth in 2015; however, the company is indicating it could trim some marginal capacity later in the year after the high demand season.

Similar to its US peers, Alaska continues to see unit revenue pressure, but believes some of it should ease later in 2015 after competitive capacity additions begin to decrease in some of its markets. Despite all the moving parts affecting its capacity and passenger unit revenue performance, Alaska continues to deliver strong top-line results.

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