Alaska Air Group led the industry in domestic unit revenue performance in the first quarter of 2025. ed the industry in domestic unit revenue performance. Ratified two agreements with Alaska and Hawaiian flight attendants represented by AFA. Generated operating cash flow of $459 million. Repurchased $149 million in shares year-to-date. Enhanced loyalty program benefits by offering status matching and reciprocal mileage earn between our Mileage Plan and
HawaiianMiles programs.
(Image Source)
Alaska AirlinesAlaska Air Group (NYSE: ALK) today reported financial results for the first quarter ending March 31, 2025.
The team is executing well on integration milestones, cost performance, synergy capture and the initiatives that underpin the Alaska Accelerate plan. Our efforts to deliver $1 billion in incremental profit by 2027 are off to a strong start.
Alaska is built for times like these with our relentless focus on safety, care and performance. Amid the economic uncertainty, our teams controlled what they can control and delivered results that strengthen our foundation for the long term. We’re growing scale, relevance and loyalty in our hubs, we’re already recognizing synergies from the combination with Hawaiian Airlines, and our employees have never been more engaged and excited about our future. Between the progress on our Alaska Accelerate strategic plan and the resilient business model we’ve built over decades, Alaska is well positioned to thrive in the years ahead.
President & CEO of Alaska Air Group
Quarter in Review
Air Group’s Consolidated Statement of Operations, Consolidated Balance Sheets, and Summary Cash Flow 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 Combined Comparative 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.
| Q1 2025 Results | Prior Expectation | Actual Results |
|---|---|---|
| Capacity (ASMs) % change versus pro forma 2024 | Up 2.5% to 3.5% | Up ~3.9% |
| RASM % change versus pro forma 2024 | Up high-single digits | Up ~5.0% |
| CASMex % change versus pro forma 2024 | Up low-single digits to mid-single digits | Up ~2.1% |
| Economic fuel cost per gallon | n/a | $2.61 |
| Adjusted loss per share | $(0.70) to $(0.50) | $(0.77) |
Our Generally Accepted Accounting Principles (GAAP) pretax margin for the first quarter was (7.4)%, with a GAAP net loss per share of $1.35. On an adjusted basis, our pretax margin was (4.5)%, with a net loss per share of $0.77. While macroeconomic factors and a softening demand environment began to negatively impact our results in February, we still delivered a 7 point year-over-year improvement to our adjusted pretax margin on a pro forma basis.
Air Group capacity grew 3.9% during the quarter, approximately 1 point higher than expected, reflecting lower than expected flight cancellation rates. Total revenue grew 9.0% year-over-year, with unit revenue up 5.0% year-over-year — a result we believe will lead the industry, despite a 3 point impact from softening demand. Premium revenue remains resilient, up 10% year-over-year, and our loyalty program cash remuneration grew 12% year-over-year. Our revenue results reflect progress on key initiatives, such as network changes and synergies which are tracking in line with expectations.
Unit costs increased 2.1% year-over-year. This cost performance is in line with our expectations, and inclusive of the new Alaska flight attendant contract, which was ratified in February. Economic fuel price per gallon was $2.61 in the first quarter, reflecting moderating crude oil prices offset by elevated West Coast refining margins.
Our consolidated results reflect strong initial progress on the integration of Hawaiian Airlines, and the synergies it unlocks. We are realizing benefits from our combined network, improved asset utilization and greater connectivity for our guests. In the first quarter, Hawaiian unit revenue increased 8.8% year-over-year, and Hawaiian’s adjusted pretax margin improved 14 points.
Second Quarter Forecast Information
For the second quarter of 2025, we expect the following results. Although overall bookings have stabilized as we look forward, our guidance reflects approximately 6 points of revenue impact to the second quarter due to recent demand softness. Consistent with prior commentary and expectations, Q2 2025 faces the most cost pressure while unit costs are expected to improve sequentially through the second half of the year.
| Q2 Expectation | |
|---|---|
| Capacity (ASMs) % change versus pro forma 2024 | Up 2% to 3% |
| RASM % change versus pro forma 2024 | Flat to Down low single digits |
| CASMex % change versus pro forma 2024 | Up mid to high single digits |
| Adjusted earnings (loss) per share | $1.15 to $1.65 |
Given recent economic uncertainty and volatility, we are not providing an update to our full year 2025 guidance. We are assessing a variety of scenarios, and expect to be solidly profitable in 2025 even if revenue remains pressured throughout the second half of the year. Absent the softer macroeconomic outlook, areas of our business within our control are performing well and in line with our prior expectations. We will provide further updates to full year guidance later this year.
Financial Results
- Reported GAAP net loss for the first quarter of 2025 of $166 million, or $1.35 per share, which includes Hawaiian results, compared to net loss of $132 million, or $1.05 per share, for the first quarter of 2024, which does not include Hawaiian results
- Reported net loss for the first quarter of 2025, excluding special items and other adjustments, of $95 million, or $0.77 per share, which includes Hawaiian results, compared to net loss of $116 million, or $0.92 per share, for the first quarter of 2024, which does not include Hawaiian results
- On a pro forma basis, adjusted pretax loss improved $190 million from $330 million in the first quarter of 2024 to $140 million in the first quarter of 2025.Repurchased 1.8 million shares of common stock for approximately $107 million in the first quarter, with year-to-date repurchases totaling $149 million as of April 22, 2025
- Generated $459 million in operating cash flow for the first quarter
- Held $2.5 billion in unrestricted cash and marketable securities as of March 31, 2025.
Operational Updates
- Ratified a three-year collective bargaining agreement (CBA) with Alaska’s more than 6,900 AFA-represented flight attendants, recognizing them for their contributions to the company’s success.
- Ratified a three-year extension of the existing CBA with Hawaiian’s more than 2,100 AFA-represented flight attendants. The extension includes Hawaiian flight attendants in the company’s Performance-Based Pay and Operational Performance Rewards programs, as well as other improved benefits.
- Reached a Tentative Agreement for an updated CBA with Horizon technicians, represented by AMFA.
- Expanded our combined fleet by eight aircraft during the quarter, adding four 737-9s, one 787-9, one E175, and two A330-300 freighters.
- Announced growth at our San Diego hub with three new nonstop routes to Phoenix, Chicago O’Hare, and Denver, as well as increased flight frequencies to Las Vegas, Sacramento, Salt Lake City, and San Jose to begin later this year.
Integration Updates
- Enhanced loyalty program benefits by offering status matching and reciprocal mileage earn between our Mileage Plan and HawaiianMiles programs.
- Continued to bring our operations closer together by co-locating Alaska and Hawaiian stations in Los Angeles, New York JFK, Phoenix, and San Francisco in order to provide a more seamless travel experience for our guests.
- Completed co-location of Alaska and Hawaiian Air Cargo operations in four Hawaiian locations — Honolulu, Maui, Kona, and Līhuʻe.
- Unified cargo booking systems, allowing customers to book shipments across both networks more easily.
Other Updates
- Introduced the Horizon Air Pilot Development Program in Hawai’i, the first of its kind in the state, providing students with a path to join Horizon Air while easing the financial burden of training costs.
- Announced investment in Loft Dynamics to develop the first hyper-realistic, full-motion Boeing 737 VR simulator, aiming to enhance pilot training and inform future training solutions across the industry.
- Named the best airline of 2025 by NerdWallet based on loyalty program value, elite status benefits, operational strength, and more.
- Named to Newsweek Reader’s Choice list of top 10 best airport lounges in the U.S., a recognition of our continued investment in the lounge experience for guests traveling through our hubs.
The following table reconciles the company’s reported GAAP net loss per share (EPS) for the three months ended March 31, 2025 and 2024 to adjusted amounts.
| Three Months Ended March 31, | ||||
|---|---|---|---|---|
| 2025 | 2024 | |||
| (in millions, except per share amounts) | Dollars | Per Share | Dollars | Per Share |
| Net loss | $ (166) | $ (1.35) | $ (132) | $ (1.05) |
| Adjusted for: | ||||
| Mark-to-market fuel hedge adjustments | (3) | (0.02) | (13) | (0.10) |
| Losses on foreign debt | 5 | 0.04 | ___ | ___ |
| Special items – operating | 91 | 0.74 | 34 | 0.27 |
| Income tax effect of adjustments above | (22) | (0.18) | (5) | (0.04) |
| Adjusted net loss | $ (95) | $ (0.77) | $ (116) | $ (0.92) |
A conference call regarding the first quarter results will be streamed online at 8:30 a.m. PDT on April 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.
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