Alaska Air ( ALK) said it lost $3.4 million excluding special items in the fourth quarter as revenue growth slowed and winter storms increased costs.

The loss amounted to 8 cents a share. Revenue was $790.3 million, up 8% from the same period a year earlier. Analysts polled by Thomson Financial had expected flat earnings on revenue of $793.4 million.

Including the impact of fuel hedge accounting and restructuring items, the company had a loss of $11.6 million, or 29 cents a share, for the quarter.

Results were lower than the company's most recent guidance. On a conference call, executives cited three December storms in Seattle, as well as higher costs for wages, benefits and pensions. During the quarter, cost per available seat mile, excluding fuel, grew 2%. Load factor was 73.7%, down 0.2 points.

Meanwhile, revenue per available seat mile grew by 3.9%, below the increases of the last three quarters. "Comparisons have become more difficult, and the trend will continue," said Gregg Saretsky, executive vice president, who noted that first-quarter RASM growth will be flat to slightly up.

By the end of 2008, Alaska will have jettisoned its last MD-80 and moved to an all-Boeing fleet, continuing a trend of cost reduction, said CEO Bill Ayer. The airline will take delivery of 14 Boeing 737-800s in 2007 but will add a single new route at most.

Even if fuel costs decline further, the airline won't be tempted to keep flying older airplanes, Ayer said. "We are committed to this transformation out of the MD-80s," he said. "Even at historically low fuel prices, it's a good thing to get to a single fleet type."

The company would expect more rapid growth when the transition is completed, he said.

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