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Alaska Air raises forecast for key cost measure
June 15, 2017 / 11:11 AM / 6 months ago

Alaska Air raises forecast for key cost measure

June 15 (Reuters) - U.S. airline company Alaska Air Group Inc on Thursday raised its second-quarter forecast for a key cost measure, citing one-time expenses related to pay hikes for pilots at its Horizon Air airline.

Alaska Air said it now expects second-quarter cost per available seat mile (CASM) — which measures operating costs as a proportion of flight capacity — to be about 7.95-8.00 cents, excluding fuel and other items, up from an earlier forecast of 7.88-7.93 cents.

A higher CASM is generally associated with lower profitability.

Pilots at Horizon Air last month approved a change to their existing eight-year contract that included pay hikes to new and existing pilots.

Alaska Air Group, the No.5 U.S. airline company, said it would incur one-time costs of $9 million related to the agreement with the Horizon Air pilots.

The company also raised its full-year CASM forecast to about 8.02-8.07 cents from 8.00-8.05 cents. (Reporting by Rachit Vats in Bengaluru; Editing by Sai Sachin Ravikumar)

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