SEATTLE _ Alaska Air Group chief executive Brad Tilden said Thursday he remains "very confident" the company's proposed $2.6 billion purchase of Virgin America will go through, despite a last-minute extension of an antitrust review by the U.S. Department of Justice.
"We were hoping to get this done a couple of weeks ago. We're not there quite yet," Tilden said. "Our hope is we'll have antitrust clearance soon."
The merger was announced in April. If the Justice Department grants approval, Tilden said the financing is already in place and the deal can close quickly.
He said he looks forward to the combination making Alaska "an airline with a national footprint and an unmatched ability to serve West Coast travelers."
Tilden spoke as Alaska announced its third quarter earnings, which showed net profit down due to costs related to the planned merger.
He also noted that due to activity around the Virgin transaction, Alaska has agreed with Boeing to postpone the introduction of its first 737 MAX model from fall of next year to early 2018.
"With so much going on, we wanted more time to bring it into service," Tilden said.
Still, Alaska's fleet continues to modernize and to grow rapidly as it replaces its older 737-400 jets with larger 737-900ERs.
This year, Alaska is adding 19 of those new jets while retiring 10 older models. Next year, it will take a dozen more of the new 737s and retire the last 16 of the older models.
The new jets bring the airline much greater fuel efficiency.
On a teleconference about the quarter's results, Alaska Air chief financial officer Brandon Pedersen said that though the 737-900ER has 37 more seats than the 737-400, it burns 910 gallons of fuel per flight hour compared to 940 gallons per flight hour on the older jet.
The -900ER "sips fuel like a Prius with wings," Pedersen said.
Andrew Harrison, Alaska's chief commercial officer, said the airline turned in a solid financial performance in the third quarter.
Revenue rose 3.4 percent to $1.6 billion during the quarter, which Harrison contrasted with a revenue contraction in the rest of the airline industry.
He said the airline was able to keep its planes as full as ever despite growing its seat capacity and ever-increasing competition in its markets, not only from Delta but also from American Airlines and low-cost carrier Spirit Airlines.
However, competition has lowered fares, so Alaska like other carriers is seeing a reduction in a key airline industry financial performance metric _ unit revenue, or the revenue collected per mile for each seat.
Unit revenue is down more than 4 percent to 13.97 cents per available seat mile, compared to 14.61 cents a year ago.
Alaska's net profit in the quarter was $256 million, or $2.07 a share, down from $274 million, or $2.14 per share, last year.
Excluding $22 million in merger-related costs and smaller fuel hedge adjustments, net profit was $272 million, or $2.20 per diluted share.
The total was slightly down from an adjusted net profit a year ago of $277 million. However, due to a buyback of 5 million shares in the quarter, the adjusted per share profit was up just shy of 2 percent from $2.16 a year ago.
Adjusted net earnings per share beat the consensus estimate among Wall Street analysts, which according to data from First Call was $2.09 per share.
Harrison also gave an update on the plan to introduce a premium class on some Alaska routes _ offering extra leg room and other benefits at an additional cost.
He said 61 jets will be converted by year-end and Alaska will start selling premium class tickets in early November for travel starting Jan. 5.
