SEATTLE — Alaska Airlines reported a $114 million net profit for the fourth quarter (Q4) of 2016, down 40.3% year-over-year YOY from $191 million in Q4 2015. Pretax earnings were down a more modest 10.8% YOY to $231 million for the full year. The same pattern applied for the full year results, where Alaska saw its net profit dip 4.0% YOY to $814 while pretax profit actually rose 2.5% YOY to $1.35 billion.

Alaska Airlines generated these results on Q4 revenues of $1.06 billion, up 10.4% YOY, while full year revenues were up 5.9% YOY to $5.93 billion. This compared to operating expenses of $1.28 billion for Q4 (up 14.3% YOY) and $4.58 billion for the full year, up 6.6% YOY. These figures yielded operating margins of 15.8% for Q4, and 22.7% for the full year, strong but not quite industry-leading.

Capacity for Q4 was up 10.3% YOY (outstripped by demand growth of 13.1%) for Q4 and 10.6% YOY for the full year. Accordingly, the all-important unit revenue or PRASM metric was down 0.9% YOY for Q4 and 5.6% YOY for the full year, both of which qualify as strong performance in the current US airline industry.

Airways Senior Business Analyst Vinay Bhaskara live blogged Alaska’s Q4 earnings call today. His summary take was:

Overall, a very strong quarter and full year for Alaska, which continued its stellar track record as a core business. One worrisome note did come out of the call around the notion that 19% of Alaska’s customers are at least partially on mileage tickets, which is heavy (even as the mileage program as a whole delivers $915 million worth of cash flow). Otherwise everyone’s eyes will turn to the Virgin America integration. There are some substantial synergies here as per Alaska management, but fundamentally, Virgin America is a lower margin business than Alaska and that margin gap has to be filled with some combination of efficiency improvements and revenue growth. But competitive capacity is pulling back sharply in early and mid 2017, and that should give Alaska the breather that it needs to be able to turn that corner.

You can follow re-read his live blog below via the ReplyAll tool.