Alaska Airlines has rolled out its basic economy Saver fare across its full network and expects it to drive a minimum of $100 million in revenue this year, executives said on a fourth-quarter earnings call.
Alaska began testing the fare in November. It does not allow seat selection, changes or cancellations and puts the traveler in the last boarding group but does allow mileage accrual and carry-on luggage. Those tests "went smoothly and enabled us to refine our processes and technology," said chief commercial officer and EVP Andrew Harrison. Alaska began selling them across its full network on Jan. 7.
In the fourth quarter, Alaska's passenger revenue increased 6 percent year over year to $1.9 billion. he said. Traffic rose 1 percent as capacity increased 1.1 percent; load factor declined 0.1 percentage points to 83.3 percent.
Yield increased 5.2 percent, and Harrison said Alaska is seeing stronger close-in demand thanks to growing volumes from business travelers. "We're especially pleased with the strength in business traffic, considering we historically have had a much stronger orientation toward the leisure traveler," he said.
Alaska reported a net income of $23 million for the quarter, down from $315 million in the fourth quarter of 2017, which included a $189 million income tax benefit. For the full year, net income was $437 million, compared with $960 million in 2017.
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