Alaska Air Group reports second quarter 2025 results
Announced first transatlantic route in Air Group history: Seattle to Rome starting May 2026Alaska Mileage Plan named #1 airline rewards program by U.S. News & World Report for the 11th consecutive yearReported earnings per share of $1.42, with adjusted earnings per share of $1.78, ahead of Wall Street expectation and previous guidance range
SEATTLE, July 23, 2025 /PRNewswire/ -- Alaska Air Group (NYSE:ALK) today reported financial results for the second quarter ending June 30, 2025.
The Alaska and Hawaiian teams closed out an impactful quarter that included the launch of a global network transformation and performance that beat expectations.
"The results this quarter are clear evidence of our team's disciplined execution and unwavering focus on what we can control: delivering a remarkable guest experience, driving operational excellence and unlocking the value of our newly combined network and commercial platform," said CEO Ben Minicucci. "I've never been more confident in our team of 30,000 to execute our Alaska Accelerate plan and position Air Group for long-term success."
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 delivered strong second quarter results, with a Generally Accepted Accounting Principles (GAAP) pretax margin of 6.4% and a GAAP net income per share of $1.42.
Q2 2025 Results
Prior Expectation
Actual Results
Capacity (ASMs) % change versus pro forma 2024
Up 2% to 3%
Up ~2.7%
RASM % change versus pro forma 2024
Flat to down low single digits
Down ~(0.6)%
CASMex % change versus pro forma 2024
Up mid to high single digits
Up ~6.5%
Adjusted earnings per share
$1.15 to $1.65
$1.78
Our adjusted pretax margin was 8.0% and our adjusted earnings per share was $1.78, exceeding the high end of our previously issued guidance. Just 10 months post-acquisition, Hawaiian's second quarter adjusted pretax margin expanded by 11-points versus prior year, surpassing breakeven for the first time since 2019. Our second quarter results affirm our strategy is delivering notable progress across the network and providing greater connectivity for our guests. Our team is delivering on the initiatives that underpin Alaska Accelerate and we remain committed to delivering our goal of $1 billion in incremental profit by 2027.
Second quarter record revenue topped $3.7 billion, resulting in year-over-year RASM that is down 0.6%, which we believe will once again lead the industry. This performance is enabled by our commercial initiatives and focus on revenue diversification; in the second quarter 49% of revenue was generated outside the main cabin. Premium revenue grew 5% year-over-year, cargo revenue grew 34% year-over-year, and our loyalty program cash remuneration grew 5% year-over-year.
Unit costs excluding fuel, freighter costs, and special items increased 6.5% year-over-year, in line with prior guidance. Economic fuel price per gallon was $2.39 in the second quarter, reflecting both moderating crude oil and West Coast refining prices throughout much of the quarter. During the quarter Hawaiian Airlines experienced a cybersecurity incident. We took immediate steps to safeguard our airlines and remain engaged with authorities and experts to conclude our investigation. Our operations were not affected.
Third Quarter and Full Year Forecast Information:
We have recently seen a positive inflection in traffic, yield and revenue intake for both Alaska and Hawaiian Airlines' bookings. We have also adjusted our 2025 capacity expectations to approximately 2% year-over-year growth. These changes reflect 2-point reductions in off-peak flying in the third and fourth quarters relative to our prior expectations, and are expected to be margin accretive. With recent changes to the demand environment, and our continued delivery on synergy and commercial initiative commitments, our outlook for full year earnings per share is greater than $3.25.
Our third quarter adjusted earnings per share is expected to be between $1.00 and $1.40, including an expected ~10 cent impact from an IT outage that resulted in irregular operations in July. Costs remain in line with our expectation, and reflect strategic investments as well as elevated real estate costs, maintenance costs and new labor agreements. Our capacity expectations will pressure unit costs in the third quarter, which are expected to be up mid to high single digits year-over-year, before improving meaningfully in the fourth quarter. We still anticipate delivering full year unit costs in line with our prior expectations.
Q3 Expectation
Full Year Expectation
Capacity (ASMs) % change versus pro forma 2024
Down ~1%
Up ~2%
RASM % change versus pro forma 2024
Flat to up low single digits
Flat to up low single digits
CASMex % change versus pro forma 2024
Up mid to high single digits
Up mid single digits
Adjusted earnings per share
$1.00 to $1.40
>$3.25
Financial Results and Updates:
Reported GAAP net income for the second quarter of 2025 of $172 million, or $1.42 per share, which includes Hawaiian results, compared to net income of $220 million, or $1.71 per share, for the second quarter of 2024, which does not include Hawaiian results.
Reported net income for the second quarter of 2025, excluding special items and other adjustments, of $215 million, or $1.78 per share, which includes Hawaiian results, compared to net income of $327 million, or $2.55 per share, for the second quarter of 2024, which does not include Hawaiian results.
Repurchased 8.7 million shares of common stock for approximately $428 million in the second quarter, bringing total repurchases to 10.5 million shares for approximately $535 million for the six months ended June 30, 2025.
Generated $376 million in operating cash flow for the second quarter.
Held $2.1 billion in unrestricted cash and marketable securities as of June 30, 2025.
Operational Updates:
Announced new nonstop service between Seattle and Rome beginning in May 2026, the first transatlantic route for Air Group.
Began new daily nonstop service between Seattle and Tokyo, the first long-haul aircraft international destination from Seattle for Air Group.
Expanded summer service with twice-daily A330 flights between Seattle and Anchorage, boosting cargo capacity equivalent to two 737 freighters.
Expanded our combined fleet by twelve aircraft during the second quarter, taking delivery of three 737-8s, four 737-9s, one 787-9, two E175s, and two A330-300 freighters.
Exercised options for twelve 737-10s with expected deliveries through 2028.
Announced a new Boeing 787-9 base in Seattle and five additional 787-9s to support our international growth.
Reached an agreement to sell Alaska's twelve 737-900s, with four aircraft sold in the second quarter and the remaining eight to be sold in the second half of 2025.
Began the cabin refresh of Alaska's 737 fleet to expand Premium and First Class seating and elevate our guests' travel experience, with modifications expected to be completed in 2026.
Ratified a four-year CBA with Horizon's AMFA-represented technicians and reached a tentative agreement with IAM-represented McGee Air Services employees.
Appointed Pete Shimer to the Air Group Board of Directors serving on the Audit and Safety Committees.
Loyalty and Guest Experience:
Launched enhanced benefit for Alaska Airlines Visa Signature® and Alaska Airlines Visa® Business cardholders, allowing Companion Fare redemption on Hawaiian Airlines flights within North America, including the state of Hawaiʻi.
Announced expanded partnership with Qantas, enabling Qantas Frequent Flyers to redeem on Hawaiian Airlines' global network, and a new partnership with Philippine Airlines. Mileage Plan members can now earn on Philippine Airlines flights, and redemptions are coming soon.
Launched Chef's (tray) Table, a new rotating First Class dining experience featuring seasonal menus crafted by celebrated West Coast chefs, including James Beard Award-winner Chef Brady Ishiwata Williams.
Expanded fresh meal options for guests seated in the Main Cabin to more flights, now available on routes as short as 670 miles.
Alaska Mileage Plan recognized as the Best Airline Rewards Program by U.S. News & World Report for the 11th consecutive year.
Recognized by the Airline Passenger Experience Association as the Best Major Airline in North America in 2025.
The following table reconciles the company's reported GAAP net income per share (EPS) for the three and six months ended June 30, 2025 and 2024 to adjusted amounts.
Three Months Ended June 30,
2025
2024
(in millions, except per share amounts)
Dollars
Per Share
Dollars
Per Share
Net income
$ 172
$ 1.42
$ 220
$ 1.71
Adjusted for:
Mark-to-market fuel hedge adjustments
(1)
(0.01)
(5)
(0.04)
Losses on foreign debt
2
0.02
—
—
Special items - operating
56
0.46
146
1.14
Income tax effect of adjustments above
(14)
(0.11)
(34)
(0.26)
Adjusted net income
$ 215
$ 1.78
$ 327
$ 2.55
Six Months Ended June 30,
2025
2024
(in millions, except per-share amounts)
Dollars
Per Share
Dollars
Per Share
Net income
$ 6
$ 0.05
$ 88
$ 0.69
Adjusted for:
Mark-to-market fuel hedge adjustments
(4)
(0.03)
(18)
(0.14)
Losses on foreign debt
7
0.05
—
—
Special items - operating
147
1.19
180
1.41
Income tax effect of adjustments above
(36)
(0.29)
(39)
(0.31)
Adjusted net income
$ 120
$ 0.97
$ 211
$ 1.65
A conference call regarding the second quarter results will be streamed online at 8:30 a.m. PDT on July 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, with McGee Air Services a subsidiary of Alaska Airlines. 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. Alaska is a member of the oneworld Alliance with Hawaiian scheduled to join in 2026. With oneworld and our additional global partners, guests can earn and redeem miles for travel to over 1,000 worldwide destinations. Guests can book travel at alaskaair.com and hawaiianairlines.com. Learn more about what's happening at Alaska and Hawaiian. 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 June 30,
Six Months Ended June 30,
(in millions, except per share amounts)
2025
2024
Change
2025
2024
Change
Operating Revenue
Passenger revenue
$ 3,355
$ 2,651
27 %
$ 6,163
$ 4,655
32 %
Loyalty program other revenue
210
174
21 %
417
338
23 %
Cargo and other revenue
139
72
93 %
261
136
92 %
Total Operating Revenue
3,704
2,897
28 %
6,841
5,129
33 %
Operating Expenses
Wages and benefits
1,165
782
49 %
2,292
1,586
45 %
Variable incentive pay
61
49
24 %
123
93
32 %
Aircraft fuel, including hedging gains and losses
700
615
14 %
1,381
1,180
17 %
Aircraft maintenance
240
129
86 %
460
251
83 %
Aircraft rent
64
46
39 %
126
93
35 %
Landing fees and other rentals
278
173
61 %
520
338
54 %
Contracted services
146
106
38 %
291
203
43 %
Selling expenses
105
84
25 %
205
161
27 %
Depreciation and amortization
199
128
55 %
393
254
55 %
Food and beverage service
97
67
45 %
182
125
46 %
Third-party regional carrier expense
69
64
8 %
133
118
13 %
Other
247
186
33 %
508
391
30 %
Special items - operating
56
146
(62) %
147
180
(18) %
Total Operating Expenses
3,427
2,575
33 %
6,761
4,973
36 %
Operating Income
277
322
(14) %
80
156
(49) %
Non-operating Income (Expense)
Interest income
22
24
(8) %
48
41
17 %
Interest expense
(66)
(36)
83 %
(132)
(71)
86 %
Interest capitalized
9
6
50 %
21
12
75 %
Other - net
(4)
—
NM
(12)
—
NM
Total Non-operating Expense
(39)
(6)
NM
(75)
(18)
NM
Income Before Income Tax
238
316
5
138
Income tax expense (benefit)
66
96
(1)
50
Net Income
$ 172
$ 220
$ 6
$ 88
Basic Earnings Per Share
$ 1.45
$ 1.74
$ 0.05
$ 0.70
Diluted Earnings Per Share
$ 1.42
$ 1.71
$ 0.05
$ 0.69
Weighted Average Shares Outstanding used for computation:
Basic
118.847
126.337
120.979
126.153
Diluted
120.930
128.310
123.183
127.857
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
Alaska Air Group, Inc.
(in millions)
June 30, 2025
December 31, 2024
ASSETS
Current Assets
Cash and cash equivalents
$ 750
$ 1,201
Restricted cash
28
29
Marketable securities
1,374
1,274
Total cash, restricted cash, and marketable securities
2,152
2,504
Receivables - net
737
558
Inventories and supplies - net
218
199
Prepaid expenses
264
307
Other current assets
136
192
Total Current Assets
3,507
3,760
Property and Equipment
Aircraft and other flight equipment
13,056
12,273
Other property and equipment
2,267
2,173
Deposits for future flight equipment
621
883
15,944
15,329
Less accumulated depreciation and amortization
(4,729)
(4,548)
Total Property and Equipment - net
11,215
10,781
Other Assets
Operating lease assets
1,279
1,296
Goodwill
2,724
2,724
Intangible assets - net
844
873
Other noncurrent assets
316
334
Total Other Assets
5,163
5,227
Total Assets
$ 19,885
$ 19,768
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in millions, except share amounts)
