Business Analysis of Alaska Air Group

 Analyze Historical Performance, Strategic Priorities, And Business Improvement Opportunities of Alaska Air Group

ALASKA AIR GROUP

Business Overview

Alaska Air Group, Inc. is the holding company of Alaska Airlines (Alaska), Virgin America Inc., Horizon Air (Horizon) and other business units. The Company operates through three segments: Mainline, Regional and Horizon. Its Mainline segment includes Alaska's and Virgin America's scheduled air transportation for passengers and cargo throughout the United States, and in parts of Canada, Mexico, Costa Rica and Cuba. Its Regional segment includes Horizon's and other third-party carriers' scheduled air transportation for passengers across a shorter distance network within the United States under capacity purchased arrangements (CPAs). Its Horizon segment includes the capacity sold to Alaska under CPA. Alaska and Virgin America operate fleets of narrowbody passenger jets. As of December 31, 2016, it maintained two frequent flyer plans: the Alaska Airlines Mileage Plan and the Virgin America Elevate.

Alaska Air Group

Alaska Air Group


R&P Rank: 447
Sector: Travel & Leisure
Industry:Airline
H.Q Location:Washington
Website: www.alaskaair.com
Company Address:
19300 INTERNATIONAL BOULEVARD, SEATTLE WA 98188
Ph:206-392-5040

Business Analysis of Alaska Air Group

The Travel & Leisure Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Alaska Air Group compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Alaska Air Group to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.

Here is the performance snapshot of Alaska Air Group with an interactive chart.

  1. Revenue Growth: Alaska Air Group reported a revenue growth of 5.9% year-on-year during 2016. Airline Industry grew at -1.0% in the same period
  2. COGS share of Revenues: As a percentage of revenue, Alaska Air Group spent 34.3% of its total revenues on COGS. Airline industry average (COGS share of revenue) in the same period was 38.0%
  3. R&D share of Revenues: Alaska Air Group R&D share of Revenues details are not available because either company does not share the data or we do not have it
  4. SG&A share of Revenues: As a percentage of revenue, Alaska Air Group spent 27.1% of its total revenues on Sales, Marketing, and General Administration (SG&A). Airline industry average SG&A spending in the same period was 29.6%
  5. Inventory share of Revenues: As a percentage of revenue, Alaska Air Group spent 0.8% of its total revenues on Inventories. Airline industry average Inventory spending in the same period was 2.2%
  6. Accounts Payable share of Revenues: As a percentage of revenue, Alaska Air Group invested 1.6% of its total revenues on Accounts Payable (A/P) Airline industry average Accounts Payable investment in the same period was 5.2%
  7. Accounts Receivable share of Revenues: As a percentage of revenue, Alaska Air Group invested 5.1% of its total revenues on Accounts Receivable (A/R). Airline industry average Accounts Receivable investment in the same period was 3.8%
  8. PP&E share of Revenues: As a percentage of revenue, Alaska Air Group invested 95.5% of its total revenues on Property, Plants, and Equipments (PP&E). Airline industry average PPE investment in the same period was 73.7%
  9. Intangibles share of Revenues: As a percentage of revenue, Alaska Air Group invested 35.0% of its total revenues on Intangibles. Airline industry average Intangibles investment in the same period was 20.3%
  10. Net Margins: Alaska Air Group Net Margins in the year 2016 were 13.7%. Airline industry average Net Margins in the same period were 8.6%

Sector and Industry Association of Alaska Air Group

For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.

Alaska Air Group is associated with Travel & Leisure Sector and Airline Industry.

Travel & Leisure sector is comprised of the following industries: Airline; Car Rental Services; Casino; Hotels and Resorts; Recreational Services. The definitions for each of the industries is as follows:

  • Airline industry includes companies primarily engaged in providing passenger air transport.
  • Car Rental Services industry includes companies engaged in providing car rental services.
  • Casino industry includes providers of gambling and casino facilities.
  • Hotels and Resorts industry includes operators of hotels, motels, lodges, resorts, spas and campgrounds.
  • Recreational Services industry includes providers of leisure facilities and services, such as amusement and theme parks, fitness centers, cruise lines, movie theaters, racetracks, and sports teams.

Industry Ranking of Alaska Air Group

With $5.9 billion revenues, Alaska Air Group ranked number 6 of all the companies in the US Airline industry. There were a total of 10 public companies in the US Airline industry that had revenues greater than $50 million during 2016.

The top-10 companies in the US Airline industry by revenues during 2016 were:

  1. American Airlines ($40.2 billion)
  2. Delta Airlines ($39.6 billion)
  3. United Continental ($36.6 billion)
  4. Southwest Airlines ($20.4 billion)
  5. JetBlue Airways ($6.6 billion)
  6. Alaska Air Group ($5.9 billion)
  7. SkyWest ($3.1 billion)
  8. Hawaiian Holdings ($2.5 billion)
  9. Spirit Airlines ($2.3 billion)
  10. Allegiant Travel ($1.4 billion)

Business Model Analysis (BMA) Framework

We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.

Next Steps

  • Conduct a holistic benchmarking; to identify and target additional sources of value
  • Get in touch with us to learn more about Business Model Analysis Framework
  • Get free data, charts, and analysis of Alaska Air Groupand its peers on select key performance indicators by clicking the reports provided below

Industry Peers and Competitors of alaska-air-group

United Continental (UAL) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

United Continental Holdings, Inc. with $37 billion revenues in the year 2016 was the number 3 Airline company. Read this report to know the top competitors of United Continental and identify growth and cost optimization opportunities of United Continental

Southwest Airlines (LUV) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Southwest Airlines Co with $20 billion revenues in the year 2016 was the number 4 Airline company. Read this report to know the top competitors of Southwest Airlines and identify growth and cost optimization opportunities of Southwest Airlines

JetBlue Airways (JBLU) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

JetBlue Airways Corp with $7 billion revenues in the year 2016 was the number 5 Airline company. Read this report to know the top competitors of JetBlue Airways and identify growth and cost optimization opportunities of JetBlue Airways

SkyWest (SKYW) Business Analysis – Analyze Historical Performance, Strategic Priorities, And...

SkyWest Inc with $3 billion revenues in the year 2016 was the number 7 Airline company. Read this report to know the top competitors of SkyWest and identify growth and cost optimization opportunities of SkyWest

Hawaiian Holdings (HA) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Hawaiian Holdings Inc with $2 billion revenues in the year 2016 was the number 8 Airline company. Read this report to know the top competitors of Hawaiian Holdings and identify growth and cost optimization opportunities of Hawaiian Holdings

Spirit Airlines (SAVE) Business Analysis – Analyze Historical Performance, Strategic Priorities,...

Spirit Airlines, Inc. with $2 billion revenues in the year 2016 was the number 9 Airline company. Read this report to know the top competitors of Spirit Airlines and identify growth and cost optimization opportunities of Spirit Airlines

Revenues Analysis

Alaska Air Group (ALK) Revenues And Revenue Growth From 2012 To...

This report provides the last five years revenues and revenue growth of Alaska Air Group, Inc. (ALK) from 2012 to 2016. Alaska Air Group generated a total of $5.9 billion revenues during 2016. Alaska Air Group reported a revenue growth of 5.9% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Alaska Air Group (ALK) Revenues And Revenue Growth From 2002 To...

This report provides the last fifteen years revenues and revenue growth of Alaska Air Group, Inc. (ALK) from 2002 to 2016. Alaska Air Group generated a total of $5.9 billion revenues during 2016. Alaska Air Group reported a revenue growth of 5.9% year-over-year during 2016. The revenues and the revenue growth correspond to the fiscal year ending in December.

Alaska Air Group (ALK) Revenue Growth Comparison With Industry Growth From...

This report provides a comparison of Alaska Air Group, Inc. (ALK) revenue growth with Airline industry growth during the last five years from 2012 to 2016. Alaska Air Group reported a revenue growth of 5.9% year-over-year during 2016. The Airline industry growth was -1% year-over-year during 2016. Alaska Air Group growth was faster than the industry during 2016.

Profit Analysis

Alaska Air Group (ALK) Net Profit And Net Margin From 2012...

This report provides the last five years net profit and net margin of Alaska Air Group, Inc. (ALK) from 2012 to 2016. Alaska Air Group reported a total net income of $814 million during 2016. Alaska Air Group generated a total of $5.9 billion revenues during 2016. Alaska Air Group net profit margin was 13.7% during 2016. The net profit and the net profit margin correspond to the fiscal year ending in December.

Alaska Air Group (ALK) Net Profit And Net Margin From 2002...

This report provides the last fifteen years net pr