Seattle-based Alaska Air Group, parent of Alaska Airlines and Horizon Air, posted third-quarter 2016 net income of $256 million, down 6.6% from a net profit of $274 million in the 2015 September quarter.

The year-over-year profit decline can be attributed to $22 million in one-time costs related to Alaska’s proposed merger with San Francisco-based Virgin America, which remains the subject of antitrust talks between Alaska executives and the US Department of Justice (DOJ). Without the merger costs, Alaska’s profit would be slightly up year-over-year.

Chairman and CEO Brad Tilden told analysts and reporters that “2016 is shaping up to be a year of record profitability” for Alaska, predicting that the company’s full-year net income will top its record 2015 net profit of $848 million.

Alaska’s third-quarter revenue rose 3% year-over-year to $1.6 billion while expenses increased 8% to $1.2 billion, producing an operating profit of $400 million, down 8% from $433 million in operating income in the prior-year period.

Alaska’s third-quarter consolidated traffic (including regional Horizon) increased 8.1% to 9.6 billion RPMs on an 8.1% lift in capacity to 11.2 billon ASMs, producing a load factor of 85.6%, unchanged from the prior-year quarter. Yield dropped 5.7% to 13.8 cents.

Though Alaska’s full-year mainline capacity is expected to grow 8% year-over-year in 2016, fourth quarter capacity is only expected to rise 2%.