Friday July 10, 03:53 PM
UPDATE 1-Alaska Air says bag fee to boost revenue
ATLANTA, July 10 (Reuters) - Alaska Air Group Inc said on Friday that a fee it began charging passengers this month for a first checked bag was expected to add $70 million or more to annual revenue.
The parent of Alaska Airlines and Horizon Air Industries also said in a filing with the U.S. Securities and Exchange Commission that the fee, which it began charging on July 7, was expected to add about $30 million in revenue for its second half.
The company's shares were up $1.12, or 6 percent, to $19.92 in morning trading.
In its investor update, Alaska Air (NYSE: ALK - news) also said it expects revenue per available seat mile (RASM) to be down 6 percent to 7 percent in the second quarter from a year earlier for Alaska Airlines.
The company added that a modification of Alaska Airlines' affinity card agreement with Bank of America (NYSE: IKJ - news) was expected to result in about $15 million of incremental revenue that it expects to record for June, pending a final accounting review.
It said the impact of the card agreement change was not included in its RASM forecast.
Alaska Air also noted that it has reached agreements with plane makers Boeing Co (NYSE: BA - news) and Bombardier to defer firm aircraft deliveries to future periods.
(Reporting by Karen Jacobs) Keywords: ALASKAAIR/
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