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:
Reported GAAP net income for the third quarter of 2025 of $73 million, or $0.62 per share, which includes Hawaiian results, compared to net income of $236 million, or $1.84 per share, for the third quarter of 2024, which includes Hawaiian results from September 18, 2024 onward.
Reported net income for the third quarter of 2025, excluding special items and other adjustments, of $123 million, or $1.05 per share, which includes Hawaiian results, compared to net income of $289 million, or $2.25 per share, for the third quarter of 2024, which includes Hawaiian results from September 18, 2024 onward.
Repurchased 10.6 million shares for approximately $540 million for the nine months ended September 30, 2025.
Generated $229 million in operating cash flow for the third quarter.
Held $2.3 billion in unrestricted cash and marketable securities as of September 30, 2025.
Operational Updates:
Announced leadership promotions at Air Group effective in the fourth quarter of 2025, naming Jason Berry COO of Alaska Airlines, Diana Birkett Rakow CEO of Hawaiian Airlines, and Andy Schneider CEO of Horizon Air.
Ratified a five-year agreement with more than 2,900 IAM-represented McGee Air Services employees.
Completed the sale of Alaska's final eight 737-900s in the third quarter.
Completed selling cutover in preparation for the full transition to a single passenger service system in spring 2026.
Atmos Rewards:
Launched Atmos Rewards, a combined loyalty program that integrates Alaska's Mileage Plan™ and Hawaiian's HawaiianMiles™ programs, offering flexible earning and expanded redemption options across our global network.
Released the Atmos Rewards Summit Visa Infinite, our premium co-branded credit card, offering enhanced earnings opportunities and exclusive benefits. Card sign-ups exceeded our year-end goal within two weeks, with notable traction beyond our core West Coast and Hawai'i markets.
Network and Partnerships:
Announced new nonstop services from Seattle to London and Reykjavik starting May 2026, increasing our global reach to five intercontinental destinations from Seattle.
Announced seven new nonstop routes connecting California and the Pacific Northwest starting this winter, including new service from Burbank, Boise, Spokane, San Diego, and Palm Springs.
Expanded our codeshare agreement with STARLUX Airlines, enhancing connectivity between our network and its long-haul services to Taipei.
Customer Experience:
Selected Starlink to equip Alaska's fleet with high-speed Wi-Fi, complimentary to all Atmos Rewards members. Installations are expected to begin in the fourth quarter and be completed in 2027.
Announced investments to widebody aircraft interiors to support Alaska's premium international experience, including lie-flat Business Class suites, a new Premium Economy cabin, refreshed Main Cabin seating, and elevated onboard amenities.
Announced San Diego lounge expansion plans to begin construction in early 2027, including a 13,000 square-foot space.
Other Highlights:
Launched a new investment fund in partnership with oneworld alliance members and Breakthrough Energy Ventures to advance and commercialize sustainable aviation fuel (SAF) technologies.
Partnered with Cosmo Oil Marketing to incorporate SAF on Osaka-Honolulu flights as part of our continued commitment to decarbonization.
Launched the combined Alaska Airlines | Hawaiian Airlines Foundation, dedicated to investing in nonprofit organizations focused on communities across the states of Alaska and Hawai'i.
Top awards in the third quarter:
"Best Airline Rewards Program", #1 ranking from U.S. News & World Report
"Most Innovative Airline Initiative", #1 ranking from Future Travel Experience
"2025 World's Best Awards for Best Domestic Airline", Travel + Leisure. Hawaiian Airlines ranked 2nd and Alaska Airlines ranked 4th
"Best Employers by State", Forbes. Hawaiian Airlines ranked No. 7 in Hawaiʻi and Alaska Airlines No. 11 in Washington.
"2026 APEX Five Star Major Airlines", APEX
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 ...
