Alaska Airlines and Horizon Air parent Alaska Air Group suffered a 16.9% decline in second-quarter profit to US$46.1 million compared to the US$55.5 million earned in the year-ago quarter, which Chairman and CEO Bill Ayer said represented "a solid performance in view of significantly higher fuel costs and a softer revenue environment."

Group revenue rose 3.6% to US$904.4 million while expenses climbed 4.3% to US$826.7 million, dropping operating profit 3% to US$77.7 million from the US$80.1 million earned in the second quarter of 2006. The company's fuel bill jumped 14% year-over-year to US$227.8 million.

The Alaska Airlines segment reported a second-quarter pre-tax profit of US$80.9 million, up 11.6% year-over-year, on an 11.9% lift in operating revenue to US$795.1 million. The airline flew 4.82 billion RPMs, up 4.2%, against a 5.2% gain in ASMs to 6.14 billion. Load factor fell 0.8 point to 78.5%. Yield was down 1.6% to 13.76 cents while operating RASM declined 2.6% to 11.79 cents. Unit cost lowered 4.2% to 10.43 cents and CASM excluding fuel, restructuring charges and fleet transition costs dropped 7.3% to 7.28 cents.

Horizon Air's pre-tax loss of US$4.9 million represented a reversal from the US$9.7 million profit posted in the year-ago quarter. Revenue grew 9.4% to US$178 million but expenses soared 18.4% to US$180.6 million.

For the first six months of 2007, the group reported a profit of US$35.8 million compared to a US$23.6 million loss in the year-ago period. Operating result swung to a US$59.6 million profit from a US$45.1 million loss in the 2006 semester. As of June 30, Alaska operated 114 aircraft and Horizon 74.

The company expects to continue to grow capacity for the rest of 2007. Third-quarter ASMs will rise 2%-3% at Alaska Airlines and 15%-16% at Horizon, with full-year capacity up 3%-4% and 9%-10% respectively. Third-quarter nonfuel CASM at Alaska is expected to increase slightly year-over-year to 7.4-7.5 cents.