Alaska Airlines and Horizon Air Group parent Alaska Air Group reported third-quarter net income of US$85.8 million, reversed from a net loss of US$17.4 million in the year-ago quarter, on a 6.3% rise in revenue to US$995.1 million.

Expenses dropped 11.2% to US$851.8 million and operating income was US$143.3 million, turned around from an operating loss of US$24 million last year. Alaska Airlines posted income before tax of US$133.7 million, reversed from a US$27.9 million pre-tax loss in the year-ago quarter, while Horizon Air recorded pre-tax income of US$8.3 million, up 40.1% from US$5.9 million last year.

Alaska Airlines mainline traffic grew 4% to 5.07 billion RPMs on a 3.3% boost in capacity to 6.35 billion ASMs, producing a load factor of 79.7%, up 0.5 point. Yield lifted 0.8% to 14.44 cents as RASM increased 1.5% to 12.48 cents and CASM dipped 18.5% to 10.41 cents. CASM ex-fuel and fleet transition costs fell 1.1% to 7.19 cents.

Operating cost improvement likely is attributable to the airline's ongoing replacement of MD-80s with 737-800s, which will be completed by the end of next year. Despite the positive quarter, executives warned that "skyrocketing" fuel prices will make sustained profitability difficult to achieve in the near term.