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.
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Alaska Airlines“Alaska’s profitable quarter was powered by another period of industry-leading unit revenue. 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.” President & CEO Alaska Air Group
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
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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.
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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.
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Repurchased 10.6 million shares for approximately $540 million for the nine months ended September 30, 2025.
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Generated $229 million in operating cash flow for the third quarter.
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Held $2.3 billion in unrestricted cash and marketable securities as of September 30, 2025.
Operational Updates
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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.
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Ratified a five-year agreement with more than 2,900 IAM-represented McGee Air Services employees.
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Completed the sale of Alaska’s final eight 737-900s in the third quarter.
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Completed selling cutover in preparation for the full transition to a single passenger service system in spring 2026.
Atmos Rewards
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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.
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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
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Announced new nonstop services from Seattle to London and Reykjavik starting May 2026, increasing our global reach to five intercontinental destinations from Seattle.
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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.
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Expanded our codeshare agreement with STARLUX Airlines, enhancing connectivity between our network and its long-haul services to Taipei.
Customer Experience
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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.
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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.
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Announced San Diego lounge expansion plans to begin construction in early 2027, including a 13,000 square-foot space.
Other Highlights
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Launched a new investment fund in partnership with oneworld alliance members and Breakthrough Energy Ventures to advance and commercialize sustainable aviation fuel (SAF) technologies.
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Partnered with Cosmo Oil Marketing to incorporate SAF on Osaka-Honolulu flights as part of our continued commitment to decarbonization.
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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.
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Top awards in the third quarter:
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“Best Airline Rewards Program” – #1 ranking from U.S. News & World Report
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“Most Innovative Airline Initiative” – #1 ranking from Future Travel Experience
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“2025 World’s Best Awards for Best Domestic Airline” – Travel + Leisure. Hawaiian Airlines ranked 2nd and Alaska Airlines ranked 4th
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“Best Employers by State” – Forbes. Hawaiian Airlines ranked No. 7 in Hawaiʻi and Alaska Airlines No. 11 in Washington.
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“2026 APEX Five Star Major Airlines” – APEX
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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.
Source: Alaska Airlines
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