Alaska Air Group Can't Wait to Move Past Its Virgin Merger

We are good airline operators. We're good at managing costs. We're good at managing operations. We're actually good at managing revenues, but we have been a little bit focused on the merger. And the sooner we get to the place where the merger is done and we're running the airline, which means whatever, getting close to our people, budgets, all of that stuff, the better. --Alaska Air Group CEO Brad Tilden

The quote above, from Alaska Air Group's (NYSE: ALK) third-quarter 2017 earnings call yesterday, neatly juxtaposes two narratives that accurately describe the Seattle-based carrier. One is that of a well-run, disciplined network airline that tends to lead the industry in any given quarter in several categories, including safety, customer satisfaction, and on-time performance.

The other, more current narrative describes an organization struggling to integrate an acquired competitor. Through three quarters of 2017, nine months after its December 2016 acquisition of Virgin America, Alaska has seen its typical operating margin shrink from costs both directly and indirectly associated with integration. More worrisome for shareholders is management's acknowledgment that the hard work of integration has pulled the airline's attention away from its basic business model.

Source: Fool.com