UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
(X)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996.
OR
( )TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from . . . . . . to . . . . . .
Commission file number 1-8957
ALASKA AIR GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 91-1292054
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
19300 Pacific Highway South, Seattle, Washington 98188
(Address of principal executive offices)
Registrant's telephone number, including area code: (206) 431-7040
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. Yes_ No_
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
The registrant has 14,465,600 common shares, par value $1.00, outstanding
at June 30, 1996.
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Attached are the following Alaska Air Group, Inc. (the Company or Air
Group) unaudited financial statements: (i) consolidated balance sheets as
of June 30, 1996 and December 31, 1995; (ii) consolidated statements of
income for the quarters and six months ended June 30, 1996 and 1995; (iii)
consolidated statement of shareholders' equity for the six months ended
June 30, 1996; and, (iv) consolidated statements of cash flows for the six
months ended June 30, 1996 and 1995. Also attached are the accompanying
notes to the Company's consolidated financial statements that have changed
significantly during the six months ended June 30, 1996. These statements,
which should be read in conjunction with the financial statements in the
Company's annual report on Form 10-K for the year ended December 31, 1995,
include all adjustments that are, in the opinion of management, necessary
for a fair presentation of the results for the interim periods. The
adjustments made were of a normal recurring nature.
Air Group is a holding company incorporated in Delaware in 1985. Its
principal subsidiaries are Alaska Airlines, Inc. (Alaska) and Horizon Air
Industries, Inc. (Horizon).
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Results of Operations
Second Quarter 1996 Compared with Second Quarter 1995 The consolidated net
income for the second quarter of 1996 was $18.0 million, or $1.24 per share
($.88 per share fully diluted), compared with net income of $7.0 million,
or $.52 per share ($.48 per share fully diluted), in 1995. Operating
income for the second quarter of 1996 was $39.7 million compared to $24.5
million for 1995. The larger operating income reflects higher passenger
load factors and yields at both Alaska and Horizon. Airline financial and
statistical data is shown following the Air Group financial statements. A
discussion of this data follows.
Alaska Airlines Operating revenues increased 16.6% to $341.6 million.
Passenger revenues, which accounted for 89% of total operating revenues,
increased 19.1% on a 16.8% rise in passenger traffic. Capacity increased
8.9%, primarily due to more flying in the Alaska, Nevada and Mexico
markets. Selective reductions in capacity in the Pacific Northwest to the
Bay Area and to Southern California markets helped boost load factors by
over 10 percentage points in those markets, while the system load factor
increased 4.4 points from 61.3% in 1995 to 65.7% in 1996. Passenger
yields, reflecting an improved balance between supply and demand for air
travel on the West Coast, continued the trend of the first quarter and rose
2.0% to 12.09 cents in 1996.
Freight and mail revenues experienced a relatively modest growth of 1.8%,
reflecting increased competition in the Alaska markets. Other-net revenues
experienced a modest decline due to decreased revenues from providing
services to other airlines.
The table below shows the major operating expense elements on a cost per
available seat mile (ASM) basis for Alaska for the second quarters of 1996
and 1995.
Alaska Airlines Operating Expenses Per ASM (In Cents)
%
1996 1995 Change Change
Wages and benefits 2.49 2.48 .01 -
Aircraft fuel 1.30 1.06 .24 23
Aircraft maintenance .37 .33 .04 12
Aircraft rent .96 .98 (.02) (2)
Commissions .62 .57 .05 9
Depreciation & amortization .36 .42 (.06) (14)
Landing fees and other rentals .33 .34 (.01) (3)
Other 1.56 1.52 .04 3
Alaska Airlines Total 7.99 7.70 .29 4
Alaska's higher unit costs were primarily due to higher fuel prices and
heavier passenger loads. Significant unit cost changes are discussed
below.
Fuel expense per ASM increased 23%, due to a 21% increase in the price of
fuel. Approximately one third of the fuel price increase was due to a 4.3
cent Federal excise tax on domestic fuel consumption that began October 1,
1995. Pending legislation in Congress to extend the exemption from this
tax has not been acted upon to date.
Maintenance expense per ASM increased 12% primarily due to higher
amortization of major airframe and engine overhaul costs.
Commission expense per ASM increased 9% because passenger revenues, upon
which commissions are paid, increased 19% or approximately 9 percentage
points over the 9% ASM growth.
Depreciation and amortization expense per ASM decreased 14% due to the sale
(and leaseback) of two aircraft at the end of the first quarter and a 6%
increase in aircraft utilization.
Other expense per ASM increased 3% primarily due to higher costs related to
heavier passenger loads, such as booking fees, communications charges and
credit card commissions.
Horizon Air Operating revenues increased 9.3% to $76.7 million. Passenger
revenues, which accounted for 95% of total operating revenues, increased
9.4% on less than a one percent rise in passenger traffic. Capacity
decreased 1.3% primarily due to less flying in the lower-yield Seattle-
Spokane and Portland-Spokane markets. These actions helped boost passenger
yields 8.8% to 35.09 cents in 1996. The system load factor increased 1.2
points from 57.3% in 1995 to 58.5% in 1996,
The table below shows the major operating expense elements on a cost per
ASM basis for Horizon for the second quarters of 1996 and 1995.
Horizon Air Operating Expenses Per ASM (In Cents)
%
1996 1995 Change Change
Wages and benefits 6.39 5.98 .41 7
Aircraft fuel 2.22 1.84 .38 21
Aircraft maintenance 2.90 2.29 .61 27
Aircraft rent 2.42 2.38 .04 2
Commissions 1.34 1.37 (.03) (2)
Depreciation & amortization .83 .64 .19 30
Landing fees and other rentals .90 .91 (.01) (1)
Other 3.77 3.68 .09 2
Horizon Air Total 20.77 19.09 1.68 9
Horizon's unit costs increased 9% primarily due to: (a) 22% higher fuel
prices; (b) increased maintenance expense on Dash 8 aircraft, which now
average 8 years in age; and (c) more depreciation expense on aircraft
improvements.
Consolidated Other Income (Expense) Non-operating expense decreased $4.8
million to $6.8 million primarily due to lower interest rates on variable
debt and smaller average debt balances. Interest income increased $1.0
million primarily due to higher average cash balances during the quarter.
Six Months 1996 Compared with Six Months 1995 The consolidated net income
for the six months ended June 30, 1996 was $10.8 million, or $.76 per share
($.66 per share fully diluted), compared with a net loss of $9.3 million,
or $.70 per share, in 1995. Operating income for the first half of 1996
was $35.2 million compared to $6.2 million for 1995. A discussion of
operating revenues and expenses for the two airlines follows.
Alaska Airlines Operating revenues increased 18.3% to $622.0 million,
primarily due to a 17.6% rise in passenger traffic. Capacity increased
9.4%, primarily due to increases in the Alaska, Arizona and Nevada markets.
The load factor increased 4.4 points from 58.9% in 1995 to 63.3% in 1996.
Passenger yields rose 2.6% to 11.83 cents in 1996, reflecting an improved
balance between supply and demand for air travel on the West Coast.
Operating expenses increased 13.8% to $587.8 million on a capacity increase
of 9.4%. Unit costs increased 4.0%, generally for the same reasons as
noted above in the second quarter comparison.
Horizon Air Operating revenues increased 12.1% to $149.1 million, due to a
6.1% rise in passenger traffic combined with a 4.8% increase in passenger
yield. Capacity increased 3.8%, while load factor rose 1.3 points from
57.5% in 1995 to 58.8% in 1996.
Operating expenses increased 8.7% to $147.2 million on a capacity increase
of 3.8%. Unit costs increased 4.8%, generally for the same reasons as
noted above in the second quarter comparison.
Other Income (Expense) Non-operating expense decreased $7.4 million to
$15.8 million for the same reasons as noted above in the second quarter
comparison.
Income Tax Expense Accounting standards require the Company to provide for
income taxes each quarter based on its estimate of the effective tax rate
for the full year. The volatility of air fares and the seasonality of the
Company's business make it very difficult to estimate full-year pretax
results. In addition, a relatively small change in pretax results can
cause a significant change in the effective tax rate due to the magnitude
of nondeductible expenses, such as goodwill amortization and employee per
diem costs. In estimating the 44.3% tax rate for the first half of 1996,
the Company considered a variety of factors, including the U.S. federal
rate of 35%, estimates of nondeductible expenses and state income taxes,
and the 49.1% tax rate used for full year 1995. This rate is evaluated
each quarter and adjustments are made if necessary.
Liquidity and Capital Resources
The table below presents the major indicators of financial condition and
liquidity.
June 30, 1996 December 31, 1995 Change
(In millions, except debt-to-equity and per share amounts)
Cash and market securities $ 105.1 $ 135.1 $ (30.0)
Working capital (deficit) (129.8) (106.4) (23.4)
Long-term debt and
capital lease obligations 483.7 522.4 (38.7)
Shareholders' equity 244.7 212.5 32.2
Book value per common share $16.92 $ 15.67 $ 1.25
Debt-to-equity 66%:34% 71%:29% NA
The Company's cash and marketable securities portfolio decreased by $30
million during the first six months of 1996. Operating activities provided
$139 million of cash during this period. Additional cash was provided by
the sale and leaseback of two B737-400 aircraft ($57 million) and proceeds
received from the issuance of common stock ($21 million). Cash was used
for the purchase of two new MD-83 aircraft, one used B737-400 aircraft, one
previously leased B737-200C, airframe and engine overhauls and other
capital expenditures ($140 million), repayment of short-term borrowings
($66 million), and the repayment of debt ($48 million).
The working capital deficit increased by $23 million primarily due to the
aircraft purchases.
Shareholders' equity increased by $32 million due to the net income of $11
million and the issuance of $21 million of common stock under stock plans.
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders
(a)Air Group's annual meeting of stockholders was held on May 21, 1996.
(b) Not applicable.
(c)Three directors were elected with the following results:
Votes Against Broker
Director Votes For or Withheld Non-Votes
B.I. Mallott 12,198,856 394,023 0
R.L. Parker,Jr.12,198,768 394,111 0
R.A. Wien 12,197,701 395,178 0
The 1996 Long-Term Incentive Equity Plan was approved with 11,351,903
votes for, 1,159,296 votes against, and 81,860 votes abstaining.
The authorization to increase common stock from 30 million to 50 million
shares was approved with 11,359,371 votes for, 1,191,264 votes against, and
42,244 votes abstaining.
ITEM 5. Other Information
The U.S. 10% passenger ticket tax, the 6.25% cargo waybill tax and the $6
per passenger international departure tax expired on December 31, 1995.
Hence, the Company ceased collecting these taxes on January 1, 1996.
Management believes that some form of these taxes will likely be reinstated
in 1996 on a prospective basis and that it is unlikely that any
reinstatement will be retroactive.
During the second quarter 1996, Air Group received approximately $11
million from issuance of 410,000 common shares as a result of management
employees exercising investment options at $27 per share. Air Group could
receive another $50 million and issue 1,864,000 additional common shares if
all the investment options were exercised. These events would likely
result in a reduction in the working capital deficit, an increase in
shareholders' equity and book value per share, a reduction in the debt-to-
equity ratio and a modest dilution of earnings per share.
ITEM 6. Exhibits and Reports on Form 8-K
(a)Exhibit 11 - Statement regarding computation of per-share earnings.
Exhibit 27 - Financial data schedule.
(b)No reports on Form 8-K were filed during the second quarter of 1996.
Signatures
Pursuant to the requirements of the Securities Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
ALASKA AIR GROUP, INC.
Registrant
Date: July 29, 1996
/s/ John F. Kelly
John F. Kelly
Chairman, President and Chief Executive Officer
/s/ Harry G. Lehr
Harry G. Lehr
Senior Vice President/Finance
(Principal Financial Officer)
CONSOLIDATED BALANCE SHEET
Alaska Air Group, Inc.
ASSETS
June 30, Dec. 31,
(In Millions) 1996 1995
Current Assets
Cash and cash equivalents $53.0 $25.8
Marketable securities 52.1 109.3
Receivables - net 89.2 88.5
Inventories and supplies 46.0 44.8
Prepaid expenses and other assets 83.4 70.0
Total Current Assets 323.7 338.4
Property and Equipment
Flight equipment 915.1 845.9
Other property and equipment 224.6 219.1
Deposits for future flight equipment 24.6 40.7
1,164.3 1,105.7
Less accumulated depreciation and amortization 334.5 312.8
829.8 792.9
Capital leases
Flight and other equipment 44.4 44.4
Less accumulated amortization 24.3 23.3
20.1 21.1
Total Property and Equipment - Net 849.9 814.0
Intangible Assets - Subsidiaries 62.6 63.6
Other Assets 88.6 97.4
Total Assets $1,324.8 $1,313.4
See accompanying notes to consolidated financial statements.
CONSOLIDATED BALANCE SHEET
Alaska Air Group, Inc.
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30, Dec. 31,
(In Millions) 1996 1995
Current Liabilities
Accounts payable $66.5 $69.2
Accrued aircraft rent 50.1 44.1
Accrued wages, vacation and payroll taxes 46.9 45.8
Other accrued liabilities 58.6 55.7
Short-term borrowings
(Interest rate: 1995 - 6.2%) - 65.9
Air traffic liability 201.0 124.4
Current portion of long-term debt and
capital lease obligations 30.4 39.7
Total Current Liabilities 453.5 444.8
Long-Term Debt and Capital Lease Obligations 483.7 522.4
Other Liabilities and Credits
Deferred income taxes 48.1 41.0
Deferred income 19.0 20.0
Other liabilities 75.8 72.7
142.9 133.7
Shareholders' Equity
Common stock, $1 par value
Authorized: 50,000,000 shares
Issued: 1996 - 17,214,150 shares
1995 - 16,718,684 shares 17.2 16.7
Capital in excess of par value 166.7 155.4
Treasury stock, at cost:
1996-2,748,550; 1995-3,153,608 shares (62.6) (71.8)
Deferred compensation (3.2) (3.6)
Retained earnings 126.6 115.8
244.7 212.5
Total Liabilities and Shareholders' Equity 1,324.8 1,313.4
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENT OF INCOME
Alaska Air Group, Inc.
Three Months Ended June 30
(In Millions except Per share Amounts) 1996 1995
Operating Revenues
Passenger $374.2 $320.8
Freight and mail 24.9 24.4
Other - net 17.6 17.0
Total Operating Revenues 416.7 362.2
Operating Expenses
Wages and benefits 117.5 108.5
Aircraft fuel 57.3 43.9
Aircraft maintenance 24.6 19.7
Aircraft rent 45.2 43.0
Commissions 26.9 25.0
Depreciation and amortization 16.8 17.0
Landing fees and other rentals 15.7 15.1
Other 73.0 65.5
Total Operating Expenses 377.0 337.7
Operating Income 39.7 24.5
Other Income (Expense)
Interest income 2.9 2.0
Interest expense (9.8) (13.1)
Loss on disposition of assets (0.1) (0.7)
Other - net 0.2 0.2
(6.8) (11.6)
Income before income tax 32.9 12.9
Income tax expense 14.9 5.9
Net Income $18.0 $7.0
Primary Earnings Per Share $1.24 $0.52
Fully Diluted Earnings Per Share $0.88 $0.48
Shares used for computation:
Primary 14.5 13.4
Fully diluted 22.7 19.3
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENT OF INCOME
Alaska Air Group, Inc.
Six Months Ended June 30
(In Millions except Per share Amounts) 1996 1995
Operating Revenues
Passenger $686.8 $580.2
Freight and mail 46.3 45.5
Other - net 35.0 31.1
Total Operating Revenues 768.1 656.8
Operating Expenses
Wages and benefits 231.8 208.3
Aircraft fuel 107.8 83.1
Aircraft maintenance 48.1 40.3
Aircraft rent 89.3 84.7
Commissions 49.9 45.3
Depreciation and amortization 34.0 33.9
Landing fees and other rentals 30.7 29.0
Other 141.3 126.0
Total Operating Expenses 732.9 650.6
Operating Income 35.2 6.2
Other Income (Expense)
Interest income 5.5 3.3
Interest expense (20.9) (26.4)
Loss on disposition of assets (0.8) (0.7)
Other - net 0.4 0.6
(15.8) (23.2)
Income (loss) before income tax 19.4 (17.0)
Income tax expense (credit) 8.6 (7.7)
Net Income (Loss) $10.8 $(9.3)
Primary Earnings (Loss) Per Share $0.76 $(0.70)
Fully Diluted Earnings Per Share $0.66 AD
Shares used for computation:
Primary 14.2 13.4
Fully diluted 22.4 19.2
AD = anti-dilutive
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENT OF SHAREHOLDERS'
Alaska Air Group, Inc.
Common Stock
Capital in Treasury Deferred
$1 Par Excess of Stock Compen- Retained
(In Millions) Value Par Value at Cost sation Earnings Total
Balances at December 31, 1995 $16.7 $155.4 $(71.8) $(3.6) $115.8 $212.5
Net income for the six months
ended June 30, 1996 10.8 10.8
Stock issued under stock plans 0.5 9.6 10.1
Treasury stock purchase
(4,466 shares) (0.1) (0.1)
Treasury stock sold
(409,524 shares) 1.7 9.3 11.0
Employee Stock Ownership Plan
shares allocated 0.4 0.4
Balances at June 30, 1996 $17.2 $166.7 $(62.6) $(3.2) $126.6 $244.7
See accompanying notes to consolidated financial statements.
CONSOLIDATED STATEMENT OF CASH FLOWS
Alaska Air Group, Inc.
Six Months Ended June 30 (In Millions) 1996 1995
Cash and cash equivalents at beginning of period $25.8 $11.6
Cash flows from operating activities:
Net income (loss) 10.8 (9.3)
Adjustments to reconcile net income (loss) to cash:
Depreciation and amortization 34.0 33.9
Amortization of airframe and engine overhauls 16.2 12.2
Loss on disposition of assets 0.8 0.6
Increase (decrease) in deferred income taxes 7.1 (5.8)
Increase in accounts receivable (0.7) (19.7)
Increase in other current assets (14.6) (0.1)
Increase in air traffic liability 76.5 52.1
Increase in other current liabilities 7.4 11.8
Other-net 1.7 (1.2)
Net cash provided by operating activities 139.2 74.5
Cash flows from investing activities:
Proceeds from disposition of assets 3.8 1.5
Purchases of marketable securities (13.4) (42.5)
Sales and maturities of marketable securities 70.6 33.8
Restricted deposits 1.5 (1.7)
Flight equipment deposits returned 1.1 8.9
Additions to flight equipment deposits (0.6) -
Additions to property and equipment (139.4) (35.0)
Net cash used in investing activities (76.4) (35.0)
Cash flows from financing activities:
Proceeds from short-term borrowings - 4.0
Repayment of short-term borrowings (65.9) (29.0)
Proceeds from sale and leaseback transactions 57.4 -
Proceeds from issuance of long-term debt - 128.8
Long-term debt and capital lease payments (48.0) (26.9)
Proceeds from issuance of common stock 10.0 0.6
Proceeds from sale of treasury stock 10.9 -
Net cash provided by (used in) financing activities (35.6) 77.5
Net increase in cash and cash equivalents 27.2 117.0
Cash and cash equivalents at end of period $53.0 $128.6
Supplemental disclosure of cash paid (received) during the period for:
Interest (net of amount capitalized) $26.8 $28.1
Income taxes (refunds) (0.8) (1.9)
Noncash investing and financing activities None None
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS THAT HAVE CHANGED SIGNIFICANTLY
DURING THE SIX MONTHS ENDED JUNE 30, 1996
Alaska Air Group, Inc.
Note 1. Commitments (See Note 5 to Consolidated Financial Statements at
December 31, 1995)
During the first quarter of 1996, Alaska's lease commitments increased
approximately $96 million due to the sale and leaseback of two B737-400
aircraft under 18-1/2-year operating leases.
Alaska Airlines Financial and Statistical Data
Quarter Ended June 30 Six Months Ended June 30
% %
Financial Data (in millions): 1996 1995 Change 1996 1995 Change
Operating Revenues:
Passenger $302.7 $254.1 19.1 $547.8 $454.1 20.6
Freight and mail 22.1 21.7 1.8 40.8 40.3 1.2
Other - net 16.8 17.1 (1.8) 33.4 31.2 7.1
Total Operating Revenues 341.6 292.9 16.6 622.0 525.6 18.3
Operating Expenses:
Wages and benefits 94.8 86.9 9.1 186.3 166.0 12.2
Aircraft fuel 49.5 37.2 33.1 92.3 70.3 31.3
Aircraft maintenance 14.3 11.4 25.4 27.9 23.3 19.7
Aircraft rent 36.6 34.4 6.4 72.1 67.6 6.7
Commissions 23.7 20.0 18.5 43.3 35.8 20.9
Depreciation and amortization 13.8 14.6 (5.5) 28.0 29.3 (4.4)
Landing fees and other rentals 12.5 11.8 5.9 24.4 22.7 7.5
Other 59.0 53.1 11.1 113.5 101.3 12.0
Total Operating Expenses 304.2 269.4 12.9 587.8 516.3 13.8
Operating Income 37.4 23.5 59.1 34.2 9.3 267.7
Interest income 3.0 2.1 5.7 3.6
Interest expense (7.6) (10.2) (16.5) (20.7)
Other - net 0.3 (0.3) 0.4 0.1
(4.3) (8.4) (10.4) (17.0)
Income (Loss) Before Income Tax $33.1 $15.1 $23.8 $(7.7)
Operating Statistics:
Revenue passengers (000) 3,005 2,499 20.3 5,581 4,595 21.5
RPM's (000,000) 2,504 2,143 16.8 4,630 3,937 17.6
ASM's (000,000) 3,809 3,498 8.9 7,309 6,680 9.4
Passenger load factor 65.7% 61.3% 4.4 pts 63.3% 58.9% 4.4 pts
Breakeven load factor 58.2% 57.4% 0.8 pts 60.9% 60.5% 0.4 pts
Yield per passenger mile 12.09c 11.85c 2.0 11.83c 11.53c 2.6
Operating revenue per ASM 8.97c 8.37c 7.1 8.51c 7.87c 8.1
Operating expenses per ASM 7.99c 7.70c 3.7 8.04c 7.73c 4.0
Fuel cost per gallon 73.7c 60.9c 21.0 71.2c 60.5c 17.7
Average number of employees 7,511 6,907 8.7 7,404 6,794 9.0
Aircraft utilization (block hours) 11.5 10.8 6.3 11.2 10.6 5.6
Operating fleet at period-end 76 74 2.7 76 72 5.6
c=cents
Horizon Air Financial and Statistical Data
Quarter Ended June 30 % Six Months Ended June 30 %
Financial Data (in millions): 1996 1995 Change 1996 1995 Change
Operating Revenues:
Passenger $73.0 $66.7 9.4 $142.1 $126.1 12.7
Freight and mail 2.8 2.7 3.7 5.5 5.2 5.8
Other - net 0.9 0.8 12.5 1.5 1.7 (11.8)
Total Operating Revenues 76.7 70.2 9.3 149.1 133.0 12.1
Operating Expenses:
Wages and benefits 22.7 21.6 5.1 45.5 42.3 7.6
Aircraft fuel 7.9 6.7 17.9 15.5 12.7 22.0
Aircraft maintenance 10.3 8.3 24.1 20.2 17.0 18.8
Aircraft rent 8.6 8.6 17.2 17.1 0.6
Commissions 4.8 4.9 (2.0) 9.6 9.5 1.1
Depreciation and amortization 3.0 2.3 30.4 5.8 4.5 28.9
Landing fees and other rentals 3.2 3.3 (3.0) 6.3 6.3
Other 13.5 13.1 3.1 27.1 26.0 4.2
Total Operating Expenses 74.0 68.8 7.6 147.2 135.4 8.7
Operating Income (Loss) 2.7 1.4 92.9 1.9 (2.4) NM
Interest income 0.1
Interest expense (0.2) (0.2) (0.3) (0.4)
Other - net 0.1 (0.1) (0.7) 0.0
(0.1) (0.3) (0.9) (0.4)
Income (Loss) Before Income Tax $2.6 $1.1 $1.0 $(2.8)
Operating Statistics:
Revenue passengers (000) 920 948 (2.9) 1,828 1,812 0.9
RPM's (000,000) 208 207 0.6 417 393 6.1
ASM's (000,000) 356 361 (1.3) 710 684 3.8
Passenger load factor 58.5% 57.3% 1.2 pts 58.8% 57.5% 1.3 pts
Breakeven load factor 56.2% 56.2% 58.1% 58.9% (0.8)pts
Yield per passenger mile 35.09c 32.25c 8.8 34.06c 32.07c 6.2
Operating revenue per ASM 21.54c 19.47c 10.6 21.01c 19.45c 8.0
Operating expenses per ASM 20.77c 19.09c 8.8 20.75c 19.80c 4.8
Fuel cost per gallon 77.5c 63.8c 21.6 75.5c 64.1c 17.8
Average number of employees 2,832 2,900 (2.3) 2,836 2,853 (0.6)
Aircraft utilization (block hours) 7.7 8.1 (4.5) 7.7 8.1 (5.1)
Operating fleet at period-end 59 68 (13.2) 59 68 (13.2)
c=cents