Alaska Air Group reports third quarter 2025 results
Announced two new global nonstop routes from Seattle to London and Reykjavik starting May 2026
Launched Atmos™ Rewards loyalty program and exceeded premium credit card sign-up expectations
Announced fleet wide installation of Starlink high-speed Wi-Fi with complimentary access for Atmos Rewards members
SEATTLE, Oct. 23, 2025 /PRNewswire/ -- Alaska Air Group (NYSE: ALK) today reported financial results for the third quarter ending September 30, 2025.
"Alaska's profitable quarter was powered by another period of industry-leading unit revenue," said CEO Ben Minicucci. "I'm proud of our people for taking care of our guests, executing major integration milestones and capturing synergies ahead of plan as we bring together Alaska and Hawaiian Airlines. Together we are delivering on our Alaska Accelerate vision, building our future as a global airline positioned to compete with greater scale, deeper relevance and stronger loyalty in the places we fly."
Quarter in Review:
Air Group's Consolidated Statements of Operations, Consolidated Balance Sheets, and Summary Cash Flow Statement include Hawaiian Airlines from September 18, 2024 onward. For comparability of financial and operational results, historical information has also been provided on a pro forma basis within the Supplementary Pro Forma Comparative Financial and Operating Information in this filing and in prior 8-K filings. The pro forma information provided assumes Hawaiian is included in both 2024 and 2025.
Air Group reported third quarter Generally Accepted Accounting Principles (GAAP) pretax margin of 2.9% and a GAAP net income per share of $0.62. Our third quarter adjusted pretax margin was 4.6% and our adjusted earnings per share was $1.05.
Q3 2025 Results
Prior Expectation
Actual Results
Capacity (ASMs) % change versus pro forma 2024
Down ~(1.0)%
Down ~(0.7)%
RASM % change versus pro forma 2024
Flat to up low single digits
Up ~1.4%
CASMex % change versus pro forma 2024
Up mid to high single digits
Up ~8.6%
Adjusted earnings per share
$1.00 to $1.40
$1.05
Air Group continued to advance its Alaska Accelerate strategy during the quarter, achieving several key integration milestones. These include the successful launch of our unified Atmos Rewards loyalty program and new premium credit card, final approval for our imminent transition to become one mainline airline under a single operating certificate, and the completion of our selling cutover to a unified passenger service system. These achievements represent significant progress in building the infrastructure to support Air Group's future growth and profitability, and deliver on our Alaska Accelerate goal of $10 earnings per share in 2027 enabled by $1 billion in incremental profit.
Third quarter record revenue was $3.8 billion, resulting in a 1.4% year-over-year RASM increase which we believe will continue to lead the industry. Corporate travel grew 8% year-over-year compared to low single-digit declines in the prior quarter, while close-in demand remained strong throughout the third quarter. Our diverse revenue streams continued to deliver with premium revenue increasing 5%, year-over-year, cargo revenue increasing 27% year-over-year, and our loyalty program cash remuneration increasing 8% year-over-year. Commercial initiatives and synergy capture remained on track for the third consecutive quarter.
Unit costs, excluding fuel, freighter costs, and special items increased 8.6% year-over-year. This increase is at the high end of prior guidance, primarily due to elevated recovery costs from the IT outage that resulted in irregular operations in July and several weeks of challenging weather. Economic fuel price per gallon was $2.51 per gallon in the third quarter, reflecting elevated West Coast refining prices during the third quarter.
Fourth Quarter and Full Year Forecast Information:
We anticipate fourth quarter unit revenue to increase low single digits year-over-year, building on last year's solid performance. Unit costs for the fourth quarter are expected to increase low single-digits year-over-year and reflect significant cost synergies, with fourth quarter capacity growth expected to be 2 to 3% year-over-year. Fuel costs are expected to remain a headwind due to ongoing volatility in West Coast refining costs. We expect fourth quarter earnings per share of at least $0.40, with full year adjusted earnings per share of at least $2.40.
Q4 Expectation
Full Year Expectation
Capacity (ASMs) % change versus pro forma 2024
Up 2% to 3%
Up ~2%
RASM % change versus pro forma 2024
Up low single digits
Up low single digits
CASMex % change versus pro forma 2024
Up low single digits
Up mid single digits
Adjusted earnings per share (a)
At least $0.40
At least $2.40
(a)
Adjusted earnings per share guidance assumes economic fuel price per gallon between $2.50 and $2.60, non-operating expense of approximately $50 million, and a tax rate of 32%
Financial Results and Updates:
Operational Updates:
Atmos Rewards:
Network and Partnerships:
Customer Experience:
Other Highlights:
The following table reconciles the company's reported GAAP net income per share (EPS) for the three and nine months ended September 30, 2025 and 2024 to adjusted amounts.
Three Months Ended September 30,
2025
2024
(in millions, except per share amounts)
Dollars
Per Share
Dollars
Per Share
Net income
$ 73
$ 0.62
$ 236
$ 1.84
Adjusted for:
Mark-to-market fuel hedge adjustments
—
—
(4)
(0.03)
Gains on foreign debt
(2)
(0.02)
—
—
Special items (a)
64
0.54
75
0.58
Income tax effect (b)
(12)
(0.09)
(18)
(0.14)
Adjusted net income
$ 123
$ 1.05
$ 289
$ 2.25
Nine Months Ended September 30,
2025
2024
(in millions, except per-share amounts)
Dollars
Per Share
Dollars
Per Share
Net income
$ 79
$ 0.65
$ 324
$ 2.52
Adjusted for:
Mark-to-market fuel hedge adjustments
(4)
(0.03)
(22)
(0.17)
Losses on foreign debt
5
0.04
—
—
Special items (a)
211
1.74
255
1.99
Income tax effect (b)
(48)
(0.39)
(57)
(0.44)
Adjusted net income
$ 243
$ 2.01
$ 500
$ 3.90
(a)
Includes $1 million of non-operating special items in the three and nine months ended September 30, 2024.
(b)
Includes income tax effect of the adjustments in the tables above as well as one-time effects of the One Big Beautiful Bill Act which was signed into law in the third quarter of 2025.
A conference call regarding the third quarter results will be streamed online at 11:30 a.m. EDT/ 8:30 a.m. PDT on October 24, 2025. It can be accessed at www.alaskaair.com/investors. For those unable to listen to the live broadcast, a replay will be available after the conclusion of the call.
References in this update to "Air Group," "Company," "we," "us," and "our" refer to Alaska Air Group, Inc. and its subsidiaries, unless otherwise specified.
This news release may contain forward-looking statements subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. These statements relate to future events and involve known and unknown risks and uncertainties that may cause actual outcomes to be materially different from those indicated by our forward-looking statements, assumptions or beliefs. For a discussion of risks and uncertainties that may cause our forward-looking statements to differ materially, see Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Some of these risks include competition, labor costs, relations and availability, general economic conditions, increases in operating costs including fuel, uncertainties regarding the ability to successfully integrate the operations of the recently completed acquisition of Hawaiian Holdings, Inc. and the ability to realize anticipated cost savings, synergies, or growth from the acquisition, inability to meet cost reduction and other strategic goals, seasonal fluctuations in demand and financial results, supply chain risks, events that negatively impact aviation safety and security, cybersecurity risks, and changes in laws and regulations that impact our business. All of the forward-looking statements are qualified in their entirety by reference to the risk factors discussed in our most recent Form 10-K and in our subsequent SEC filings. We operate in a continually changing business environment, and new risk factors emerge from time to time. Management cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on our business or events described in any forward-looking statements. We expressly disclaim any obligation to publicly update or revise any forward-looking statements made today to conform them to actual results. Over time, our actual results, performance or achievements may differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, assumptions or beliefs and such differences might be significant and materially adverse.
Alaska Airlines, Hawaiian Airlines and Horizon Air are subsidiaries of Alaska Air Group, and McGee Air Services is a subsidiary of Alaska Airlines. We are a global airline with hubs in Seattle, Honolulu, Portland, Anchorage, Los Angeles, San Diego and San Francisco. We deliver remarkable care as we fly our guests to more than 140 destinations throughout North America, Latin America, Asia and the Pacific. We'll serve Europe beginning in spring 2026. Guests can book travel at alaskaair.com and hawaiianairlines.com. Alaska is a member of the oneworld alliance, with Hawaiian scheduled to join oneworld in spring 2026. With oneworld and our additional global partners, guests can earn and redeem points for travel to over 1,000 worldwide destinations with Atmos Rewards. Learn more about what's happening at Alaska and Hawaiian at news.alaskaair.com. Alaska Air Group is traded on the New York Stock Exchange (NYSE) as "ALK."
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Alaska Air Group, Inc.
Three Months Ended September 30,
Nine Months Ended September 30,
(in millions, except per share amounts)
2025
2024
Change
2025
2024
Change
Operating Revenue
Passenger revenue
$ 3,424
$ 2,821
21 %
$ 9,587
$ 7,476
28 %
Loyalty program other revenue
200
171
17 %
617
509
21 %
Cargo and other revenue
142
80
78 %
403
216
87 %
Total Operating Revenue
3,766
3,072
23 %
10,607
8,201
29 %
Operating Expenses
Wages and benefits
1,226
883
39 %
3,518
2,469
42 %
Variable incentive pay
71
104
(32) %
194
197
(2) %
Aircraft fuel, including hedging gains and
losses
761
624
22 %
2,142
1,804
19 %
Aircraft maintenance
238
140
70 %
698
391
79 %
Aircraft rent
64
49
31 %
190
142
34 %
Landing fees and other rentals
305
194
57 %
825
532
55 %
Contracted services
151
108
40 %
442
311
42 %
Selling expenses
107
82
30 %
312
243
28 %
Depreciation and amortization
203
139
46 %
596
393
52 %
Food and beverage service
100
69
45 %
282
194
45 %
Third-party regional carrier expense
72
63
14 %
205
181
13 %
Other
256
202
27 %
764
593
29 %
Special items - operating
64
74
(14) %
211
254
(17) %
Total Operating Expenses
3,618
2,731
32 %
10,379
7,704
35 %
Operating Income
148
341
(57) %
228
497
(54) %
Non-operating Income (Expense)
Interest income
23
28
(18) %
71
69
3 %
Interest expense
(70)
(44)
59 %
(202)
(115)
76 %
Interest capitalized
8
7
14 %
29
19
53 %
Other - net
2
(4)
150 %
(10)
(4)
150 %
Total Non-operating Expense
(37)
(13)
185 %
(112)
(31)
NM
Income Before Income Tax
111
328
116
466
Income tax expense
38
92
37
142
Net Income
$ 73
$ 236
$ 79
$ 324
Basic Earnings Per Share
$ 0.63
$ 1.87
$ 0.66
$ 2.57
Diluted Earnings Per Share
$ 0.62
$ 1.84
$ 0.65
$ 2.52
Weighted Average Shares Outstanding used for
computation:
Basic
115.287
126.189
119.061
126.165
Diluted
117.500
128.590
121.193
128.347
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
Alaska Air Group, Inc.
(in millions)
September 30, 2025
December 31, 2024
ASSETS
Current Assets
Cash and cash equivalents
$ 778
$ 1,201
Restricted cash
28
29
Marketable securities
1,494
1,274
Total cash, restricted cash, and marketable securities
2,300
2,504
Receivables - net
586
558
Inventories and supplies - net
229
199
Prepaid expenses
285
307
Other current assets
66
192
Total Current Assets
3,466
3,760
Property and Equipment
Aircraft and other flight equipment
12,953
12,273
Other property and equipment
2,367
2,173
Deposits for future flight equipment
710
883
16,030
15,329
Less accumulated depreciation and amortization
(4,794)
(4,548)
Total Property and Equipment - net
11,236
10,781
Other Assets
Operating lease assets
1,322
1,296
Goodwill
2,723
2,724
Intangible assets - net of accumulated amortization of $60 and $16
829
873
Other noncurrent assets
436
334
Total Other Assets
5,310
5,227
Total Assets
$ 20,012
$ 19,768
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in millions, except share amounts)
September 30, 2025
December 31, 2024
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable
$ 322
$ 186
Accrued wages, vacation and payroll taxes
811
1,001
Air traffic liability
1,938
1,712
Other accrued liabilities
1,007
997
Deferred revenue
1,837
1,592
Current portion of long-term debt
519
442
Current portion of operating lease liabilities
216
207
Current portion of finance lease liabilities
9
8
Total Current Liabilities
6,659
6,145
Noncurrent Liabilities
Long-term debt, net of current portion
4,490
4,491
Operating lease liabilities, net of current portion
1,197
1,198
Finance lease liabilities, net of current portion
40
47
Deferred income taxes
976
934
Deferred revenue
1,596
1,664
Obligation for pension and post-retirement medical benefits
439
460
Other liabilities
586
457
Total Noncurrent Liabilities
9,324
9,251
Shareholders' Equity
Preferred stock, $0.01 par value, Authorized: 5,000,000 shares, none issued or
outstanding
—
—
Common stock, $0.01 par value, Authorized: 400,000,000 shares, Issued: 2025 -
144,137,508 shares; 2024 - 141,449,174 shares, Outstanding: 2025 - 115,232,538
shares; 2024 - 123,119,199 shares
1
1
Capital in excess of par value
913
811
Treasury stock (common), at cost: 2025 - 28,904,970 shares; 2024 - 18,329,975
shares
(1,671)
(1,131)
Accumulated other comprehensive loss
(223)
(239)
Retained earnings
5,009
4,930
Total Shareholders' Equity
4,029
4,372
Total Liabilities and Shareholders' Equity
$ 20,012
$ 19,768
SUMMARY CASH FLOW (unaudited)
Alaska Air Group, Inc.
(in millions)
Nine Months
Ended September
30, 2025
Six Months Ended
June 30, 2025 (a)
Three Months
Ended September
30, 2025 (b)
Cash Flows from Operating Activities:
Net income
$ 79
$ 6
$ 73
Adjustments to reconcile net income to net cash provided by
operating activities
639
455
184
Changes in working capital
346
374
(28)
Net cash provided by operating activities
1,064
835
229
Cash Flows from Investing Activities:
Property and equipment additions
(963)
(741)
(222)
Other investing activities
(33)
(6)
(27)
Net cash used in investing activities
(996)
(747)
(249)
Cash Flows from Financing Activities:
(490)
(544)
54
Net increase (decrease) in cash and cash equivalents
(422)
(456)
34
Cash, cash equivalents, and restricted cash at beginning of
period
1,257
1,257
801
Cash, cash equivalents, and restricted cash at end of the
period
$ 835
$ 801
$ 835
(a)
As reported in Form 10-Q for the second quarter of 2025.
(b)
Cash flows for the three months ended September 30, 2025 can be calculated by subtracting cash flows from the six months ended June 30, 2025 from the nine months ended September 30, 2025.
SPECIAL ITEMS (unaudited)
Air Group has classified certain operating activity as special items due to their unusual or infrequently occurring nature. We believe disclosing information about these items separately improves comparable year-over-year analysis and allows stakeholders to better understand our results of operations. A description of the special items is provided below.
Integration costs: Integration costs were associated with the acquisition of Hawaiian Airlines and consist of employee-related costs, legal and professional fees, technology, and other merger costs.
Labor and other: Labor and other costs in 2025 were primarily for changes to Alaska flight attendants' sick leave benefits pursuant to a new collective bargaining agreement ratified in the first quarter of 2025. Costs in 2024 were associated with new labor agreements, the retirement of Alaska's Airbus and Horizon's Q400 aircraft, and certain litigation items.
Three Months Ended
September 30,
Nine Months Ended September
30,
(in millions)
2025
2024
2025
2024
Operating Expenses
Integration costs
$ 61
$ 90
$ 154
$ 128
Labor and other
3
(16)
57
126
Special items - operating
$ 64
$ 74
$ 211
$ 254
OPERATING STATISTICS (unaudited)
A manual recalculation of certain figures using rounded amounts may not agree directly to the actual figures presented in the
table below. 2024 figures include Hawaiian results September 18, 2024 onward.
Three Months Ended September 30,
Nine Months Ended September 30,
2025
2024
Change
2025
2024
Change
Consolidated Operating Statistics: (a)
Revenue passengers (000)
15,879
13,237
20.0 %
44,272
34,899
26.9 %
RPMs (000,000) "traffic"
20,739
16,970
22.2 %
58,174
44,803
29.8 %
ASMs (000,000) "capacity"
24,447
19,847
23.2 %
69,724
53,422
30.5 %
Load factor
84.8 %
85.5 %
(0.7) pts
83.4 %
83.9 %
(0.5) pts
Yield
16.51¢
16.62¢
(0.7) %
16.48¢
16.69¢
(1.3) %
PRASM
14.00¢
14.21¢
(1.5) %
13.75¢
13.99¢
(1.7) %
RASM
15.41¢
15.48¢
(0.5) %
15.21¢
15.35¢
(0.9) %
CASMex (b)
11.23¢
10.16¢
10.5 %
11.32¢
10.48¢
8.0 %
Economic fuel cost per gallon (b) (c)
$2.51
$2.61
(3.8) %
$2.50
$2.82
(11.3) %
Fuel gallons (000,000) (c)
303
240
26.3 %
859
646
33.0 %
ASMs per gallon
80.6
82.7
(2.5) %
81.1
82.6
(1.8) %
Departures (000)
144.0
121.6
18.4 %
407.4
329.7
23.6 %
Average full-time equivalent employees
(FTEs)
32,590
24,963
30.6 %
31,221
23,784
31.3 %
Operating fleet (d)
406
394
12 a/c
406
394
12 a/c
Alaska Airlines Operating Statistics:
RPMs (000,000) "traffic"
14,140
14,951
(5.4) %
39,597
40,375
(1.9) %
ASMs (000,000) "capacity"
16,631
17,459
(4.7) %
47,424
48,118
(1.4) %
Economic fuel cost per gallon
$2.53
$2.60
(2.7) %
$2.51
$2.80
(10.4) %
Hawaiian Airlines Operating Statistics:
RPMs (000,000) "traffic"
5,113
634
NM
14,454
634
NM
ASMs (000,000) "capacity"
6,045
763
NM
17,313
763
NM
Economic fuel cost per gallon (c)
$2.36
$2.35
— %
$2.38
$2.35
1 %
Regional Operating Statistics: (e)
RPMs (000,000) "traffic"
1,486
1,385
7.3 %
4,123
3,795
8.6 %
ASMs (000,000) "capacity"
1,771
1,625
9.0 %
4,987
4,540
9.8 %
Economic fuel cost per gallon
$2.73
$2.74
(0.4) %
$2.70
$2.99
(9.7) %
(a)
Except for FTEs, data includes information related to third-party regional capacity purchase flying arrangements.
(b)
See a reconciliation of this non-GAAP measure and Note A for a discussion of the importance of this measure to investors in the accompanying pages.
(c)
Excludes operations under the Air Transportation Services Agreement (ATSA) with Amazon.
(d)
Includes aircraft owned and leased by Alaska, Hawaiian, and Horizon as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excludes all aircraft removed from operating service.
(e)
Data presented includes information related to flights operated by Horizon and third-party carriers.
GAAP TO NON-GAAP RECONCILIATIONS (unaudited)
Alaska Air Group, Inc.
We are providing reconciliations of reported non-GAAP financial measures to their most directly comparable financial measures reported on a GAAP basis. Amounts in the tables below are rounded to the nearest million. As a result, a manual recalculation of certain figures using these rounded amounts may not agree directly to the actual figures presented in the tables below.
Adjusted Income Before Income Tax Reconciliation
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in millions)
2025
2024
2025
2024
Income before income tax
$ 111
$ 328
$ 116
$ 466
Adjusted for:
Mark-to-market fuel hedge adjustment
—
(4)
(4)
(22)
(Gains)/losses on foreign debt
(2)
—
5
—
Special items (a)
64
75
211
255
Adjusted income before income tax
$ 173
$ 399
$ 328
$ 699
Pretax margin
2.9 %
10.7 %
1.1 %
5.7 %
Adjusted pretax margin
4.6 %
13.0 %
3.1 %
8.5 %
(a)
Includes $1 million of non-operating special items in the three and nine months ended September 30, 2024.
CASMex Reconciliation
Three Months Ended
September 30,
Nine Months Ended
September 30,
(in millions)
2025
2024
2025
2024
Total operating expenses
$ 3,618
$ 2,731
$ 10,379
$ 7,704
Less the following components:
Aircraft fuel, including hedging gains and losses
761
624
2,142
1,804
Freighter costs
47
17
135
46
Special items - operating
64
74
211
254
Total operating expenses, excluding fuel, freighter
costs, and special items
$ 2,746
$ 2,016
$ 7,891
$ 5,600
ASMs
24,447
19,847
69,724
53,422
CASMex
11.23 ¢
10.16 ¢
11.32 ¢
10.48 ¢
Fuel Reconciliation
Three Months Ended September 30,
2025
2024
(in millions, except for per-gallon amounts)
Dollars
Cost/Gallon
Dollars
Cost/Gallon
Raw or "into-plane" fuel cost
$ 761
$ 2.51
$ 619
$ 2.57
Losses on settled hedges
—
—
9
0.04
Economic fuel expense
$ 761
$ 2.51
$ 628
$ 2.61
Mark-to-market fuel hedge adjustment
—
—
(4)
(0.01)
Aircraft fuel, including hedging gains and losses
$ 761
$ 2.51
$ 624
$ 2.60
Fuel gallons
303
240
Nine Months Ended September 30,
2025
2024
(in millions, except for per gallon amounts)
Dollars
Cost/Gallon
Dollars
Cost/Gallon
Raw or "into-plane" fuel cost
$ 2,142
$ 2.50
$ 1,795
$ 2.77
Losses on settled hedges
4
—
31
0.05
Economic fuel expense
$ 2,146
$ 2.50
$ 1,826
$ 2.82
Mark-to-market fuel hedge adjustment
(4)
—
(22)
(0.03)
Aircraft fuel, including hedging gains and losses
$ 2,142
$ 2.50
$ 1,804
$ 2.79
Fuel gallons
859
646
Debt-to-capitalization, including leases
(in millions)
September 30, 2025
December 31, 2024
Long-term debt, net of current portion
$ 4,490
$ 4,491
Capitalized operating leases
1,413
1,405
Capitalized finance leases
49
55
Adjusted debt, net of current portion of long-term debt
5,952
5,951
Shareholders' equity
4,029
4,372
Total Invested Capital
$ 9,981
$ 10,323
Debt-to-capitalization ratio, including leases
60 %
58 %
Adjusted net debt to earnings before interest, taxes, depreciation, amortization, rent, and special items
(in millions)
September 30, 2025
December 31, 2024
Long-term debt
$ 5,009
$ 4,933
Capitalized operating leases
1,413
1,405
Capitalized finance leases
49
55
Total adjusted debt
6,471
6,393
Less: Total cash and marketable securities
2,272
2,475
Adjusted net debt
$ 4,199
$ 3,918
(in millions)
Twelve Months Ended
September 30, 2025
Twelve Months Ended
December 31, 2024
Operating Income (a)
$ 301
$ 570
Adjusted for:
Special items - operating
302
345
Mark-to-market fuel hedge adjustments
(10)
(28)
Gain on foreign debt
(5)
(10)
Depreciation and amortization
786
583
Aircraft rent
255
207
EBITDAR
$ 1,629
$ 1,667
Adjusted net debt to EBITDAR
2.6x
2.4x
(a)
Operating income can be reconciled using the trailing twelve month operating income as filed quarterly with the SEC.
OPERATING SEGMENTS (unaudited)
Alaska Air Group, Inc.
Three Months Ended September 30, 2025
(in millions)
Alaska
Airlines
Hawaiian
Airlines
Regional
Consolidating
& Other (a)
Air Group
Adjusted (b)
Adjustments (c)
Consolidated
Operating Revenue
Passenger revenue
$ 2,172
$ 768
$ 484
$ —
$ 3,424
$ —
$ 3,424
Loyalty program other revenue
155
29
16
—
200
—
200
Cargo and other revenue
79
60
—
3
142
—
142
Total Operating Revenue
2,406
857
500
3
3,766
—
3,766
Operating Expenses
Operating expenses, excluding fuel
1,745
684
386
(22)
2,793
64
2,857
Fuel expense
470
188
103
—
761
—
761
Total Operating Expenses (Income)
2,215
872
489
(22)
3,554
64
3,618
Non-operating Income (Expense)
(4)
(27)
—
(8)
(39)
2
(37)
Income (Loss) Before Income Tax
$ 187
$ (42)
$ 11
$ 17
$ 173
$ (62)
$ 111
Three Months Ended September 30, 2024
(in millions)
Alaska
Airlines
Hawaiian
Airlines
Regional
Consolidating
& Other (a)
Air Group
Adjusted (b)
Adjustments (c)
Consolidated
Operating Revenue
Passenger revenue
$ 2,261
$ 84
$ 476
$ —
$ 2,821
$ —
$ 2,821
Loyalty program other revenue
151
5
15
—
171
—
171
Cargo and other revenue
71
6
—
3
80
—
80
Total Operating Revenue
2,483
95
491
3
3,072
—
3,072
Operating Expenses
Operating expenses, excluding fuel
1,625
82
340
(14)
2,033
74
2,107
Fuel expense
510
23
95
—
628
(4)
624
Total Operating Expenses (Income)
2,135
105
435
(14)
2,661
70
2,731
Non-operating Income (Expense)
3
(4)
—
(11)
(12)
(1)
(13)
Income (Loss) Before Income Tax
$ 351
$ (14)
$ 56
$ 6
$ 399
$ (71)
$ 328
Nine Months Ended September 30, 2025
(in millions)
Alaska
Airlines
Hawaiian
Airlines
Regional
Consolidating
& Other (a)
Air Group
Adjusted (b)
Adjustments (c)
Consolidated
Operating Revenue
Passenger revenue
$ 6,061
$ 2,190
$ 1,336
$ —
$ 9,587
$ —
$ 9,587
Loyalty program other revenue
468
100
49
—
617
—
617
Cargo and other revenue
224
171
—
8
403
—
403
Total Operating Revenue
6,753
2,461
1,385
8
10,607
—
10,607
Operating Expenses
Operating expenses, excluding fuel
5,004
1,986
1,102
(66)
8,026
211
8,237
Fuel expense
1,326
533
287
—
2,146
(4)
2,142
Total Operating Expenses (Income)
6,330
2,519
1,389
(66)
10,172
207
10,379
Non-operating Income (Expense)
(12)
(71)
—
(24)
(107)
(5)
(112)
Income (Loss) Before Income Tax
$ 411
$ (129)
$ (4)
$ 50
$ 328
$ (212)
$ 116
Nine Months Ended September 30, 2024
(in millions)
Alaska
Airlines
Hawaiian
Airlines
Regional
Consolidating
& Other (a)
Air Group
Adjusted (b)
Adjustments (c)
Consolidated
Operating Revenue
Passenger revenue
$ 6,078
$ 84
$ 1,314
$ —
$ 7,476
$ —
$ 7,476
Loyalty program other revenue
460
5
44
—
509
—
509
Cargo and other revenue
202
6
—
8
216
—
216
Total Operating Revenue
6,740
95
1,358
8
8,201
—
8,201
Operating Expenses
Operating expenses, excluding fuel
4,639
82
977
(52)
5,646
254
5,900
Fuel expense
1,515
23
288
—
1,826
(22)
1,804
Total Operating Expenses (Income)
6,154
105
1,265
(52)
7,472
232
7,704
Non-operating Income (Expense)
6
(4)
—
(32)
(30)
(1)
(31)
Income (Loss) Before Income Tax
$ 592
$ (14)
$ 93
$ 28
$ 699
$ (233)
$ 466
(a)
Includes consolidating entries, Air Group parent company, Horizon, McGee Air Services, and other immaterial business units.
(b)
The Air Group Adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocation and excludes certain charges.
(c)
Includes special items, mark-to-market fuel hedge accounting adjustments, and gain and losses on foreign debt.
SUPPLEMENTARY PRO FORMA COMPARATIVE FINANCIAL AND OPERATING INFORMATION (unaudited)
We believe that analysis of specific financial and operational results on a pro forma basis provides more meaningful year-over-
year comparisons. The table below provides results comparing the three and nine months ended September 30, 2025 as reported
to the pro forma three and nine months ended September 30, 2024. Hawaiian's financial information has been conformed to
reflect Air Group's historical financial statement presentation. This information does not purport to reflect what our financial and
operational results would have been had the acquisition been consummated at the beginning of the periods presented.
Three Months Ended September 30,
Nine Months Ended September 30,
(in millions)
2025
2024 Pro
forma (a)
Change
2025
2024 Pro
forma (b)
Change
Operating Revenue
Passenger revenue
$ 3,424
$ 3,424
— %
$ 9,587
$ 9,324
3 %
Loyalty program other revenue
200
197
2 %
617
593
4 %
Cargo and other revenue
142
118
20 %
403
328
23 %
Total Operating Revenue
3,766
3,739
1 %
10,607
10,245
4 %
Operating expenses, excluding fuel
2,857
2,650
8 %
8,237
7,665
7 %
Aircraft fuel, including hedging gains and losses
761
783
(3) %
2,142
2,343
(9) %
Total Operating Expenses
3,618
3,433
5 %
10,379
10,008
4 %
Operating Income
148
306
(52) %
228
237
(4) %
Non-operating expense
(37)
(51)
(27) %
(112)
(88)
27 %
Income Before Income Tax
111
255
(56) %
116
149
(22) %
Special items (c)
64
79
(19) %
211
265
(20) %
Mark-to-market fuel hedge adjustments
—
(4)
(100) %
(4)
(24)
(83) %
(Gain)/Losses on foreign debt
(2)
13
(115) %
5
(3)
NM
Adjusted Income Before Income Tax
$ 173
$ 343
(50) %
$ 328
$ 387
(15) %
Pretax Margin
2.9 %
6.8 %
(3.9) pts
1.1 %
1.5 %
(0.4) pts
Adjusted Pretax Margin
4.6 %
9.2 %
(4.6) pts
3.1 %
3.8 %
(0.7) pts
Pro forma Comparative Operating Statistics
Revenue passengers (000)
15,879
15,724
1.0 %
44,272
42,795
3.5 %
RPMs (000,000) "traffic"
20,739
21,073
(1.6) %
58,174
57,498
1.2 %
ASMs (000,000) "capacity"
24,447
24,607
(0.7) %
69,724
68,462
1.8 %
Load factor
84.8 %
85.6 %
(0.8) pts
83.4 %
84.0 %
(0.6) pts
Yield
16.51¢
16.25¢
1.6 %
16.48¢
16.22¢
1.6 %
RASM
15.41¢
15.19¢
1.4 %
15.21¢
14.96¢
1.7 %
CASMex
11.23¢
10.34¢
8.6 %
11.32¢
10.69¢
5.9 %
Pro forma Comparative CASMex Reconciliation
(in millions)
Total operating expenses
$ 3,618
$ 3,433
5 %
$ 10,379
$ 10,008
4 %
Less the following components:
Aircraft fuel, including hedging gains and losses
761
783
(3) %
2,142
2,343
(9) %
Freighter costs
47
29
62 %
135
74
82 %
Special items - operating
64
78
(18) %
211
272
(22) %
Total operating expenses, excluding fuel, freighter
costs, and special items
$ 2,746
$ 2,543
8 %
$ 7,891
$ 7,319
8 %
ASMs
24,447
24,607
(0.7) %
69,724
68,462
1.8 %
CASMex
11.23¢
10.34¢
8.6 %
11.32¢
10.69¢
5.9 %
(a)
As provided on Form 8-K filed with the SEC on January 22, 2025, including certain immaterial reclassification and policy adjustments.
(b)
Pro forma nine months ended September 30, 2024 can be calculated by adding the three months ended March 31, 2024, June 30, 2024, and September 30, 2024 as provided on Form 8-K filed with the SEC on January 22, 2025, including certain immaterial reclassification and policy adjustments.
(c)
Includes non-operating special items of $1 million expense and $7 million income for three and nine months ended September 30, 2024.
Note A: Pursuant to Regulation G, we are providing reconciliations of reported non-GAAP financial measures to their most directly comparable financial measures reported on a GAAP basis. We believe that consideration of these non-GAAP financial measures may be important to investors for the following reasons:
GLOSSARY OF TERMS
Adjusted net debt - long-term debt, including current portion, plus capitalized operating and finance leases, less cash and marketable securities
Adjusted net debt to EBITDAR - represents net adjusted debt divided by EBITDAR (trailing twelve months earnings before interest, taxes, depreciation, amortization, rent, and special items)
ASMs - available seat miles, or "capacity"; represents total seats available across the fleet multiplied by the number of miles flown
CASMex - operating costs excluding fuel, freighter costs, and special items per ASM, or "unit cost"
Debt-to-capitalization ratio - represents adjusted debt (long-term debt plus capitalized operating and finance lease liabilities) divided by total equity plus adjusted debt
Diluted Earnings per Share - represents earnings per share (EPS) using fully diluted shares outstanding
Diluted Shares - represents the total number of shares that would be outstanding if all possible sources of conversion, such as stock options, were exercised
Economic Fuel - best estimate of the cash cost of fuel, net of the impact of our fuel-hedging programs and excluding operations under the Air Transportation Service Agreement (ATSA) with Amazon
Freighter Costs - operating expenses directly attributable to the operation of Alaska's B737 freighter aircraft and Hawaiian's A330-300 freighter aircraft exclusively performing cargo missions
Load Factor - RPMs as a percentage of ASMs; represents the number of available seats that were filled with revenue passengers
PRASM - passenger revenue per ASM, or "passenger unit revenue"
RASM - operating revenue per ASMs, or "unit revenue"; operating revenue includes all passenger revenue, freight & mail, loyalty program revenue, and other ancillary revenue; represents the average total revenue for flying one seat one mile
RPMs - revenue passenger miles, or "traffic"; represents the number of seats that were filled with revenue passengers; one passenger traveling one mile is one RPM
Yield - passenger revenue per RPM; represents the average passenger revenue for flying one passenger one mile
SOURCE Alaska Air Group