Alaska Air Group Inc. reported better-than-expected earnings in the latest quarter amid declining fuel costs, as the company seeks regulatory approval for its proposed marriage with Virgin America Inc.

U.S. airliners have reported strong financial performance in recent quarters, the result of slower growth, less competition and cheaper fuel.

Seattle-based Alaska Air reported its aircraft fuel expenses, including hedging gains and losses, had declined 29% to $167 million.

In the quarter ended March 31, Alaska Air's unit revenue—the amount it takes in per seat flown a mile—fell 6.1% compared with the prior-year quarter. The metric is closely watched as a sign of demand and how well an airline is generating sales. Unit revenues have been declining across the industry because of relatively rapid expansions.

Alaska Air last week said i t submitted paperwork outlining to the government its $2.6 billion plan to acquire Virgin America. The U.S. Federal Trade Commission and the U.S. Justice Department will review the proposed transaction to determine whether it is anticompetitive.

If regulators bless the deal, Alaska would become the fifth-largest U.S. airline by traffic, vaulting over JetBlue Airways Corp., which also participated in the bidding for Virgin America.

Overall for the first quarter, Alaska Air reported a profit of $184 million, or $1.46 a share, compared with $149 million, or $1.12 a share, in the prior-year period. Excluding the impact of mark-to-market fuel hedge adjustments, the company's per-share earnings was $1.45. Revenue rose 6% to $1.35 billion.

Analysts had expected $1.42 a share on revenue of $1.34 billion.

Load factor rose to 82% from 83.4% a year earlier. Traffic shot up 11% as capacity climbed 12.9%.

Alaska's shares were unchanged premarket.

Write to Joshua Jamerson at joshua.jamerson@wsj.com

 

(END) Dow Jones Newswires

April 21, 2016 07:55 ET (11:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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