Alaska Air Group reports strong third quarter of 2024

DALLAS – Alaska Air Group (AS) achieved a significant milestone in the third quarter of 2024, leading the aviation industry with an adjusted pre-tax margin of 13%.

The airline achieved a GAAP pre-tax margin of 10.7% and earnings per share (EPS) of $1.84, highlighting its solid financial health and operational excellence. Additionally, the completion of the Hawaiian Airlines (HA) acquisition on September 18, 2024 added 13 days of quarterly results and strengthened Alaska's already solid position in the industry.

Key highlights of the third quarter include a strategic capacity increase that supported both airlines' extensive networks. Unit revenues recorded a positive trend driven by strong demand and pricing power, while unit costs remained under control due to AS's “commitment to cost discipline.”

The acquisition also positions the company to increase Hawaiian Airlines' profitability, although temporary headwinds from integration and alignment activities are expected. As part of its long-term strategy, Alaska is improving fuel cost efficiency, which is expected to help maintain margins amid fluctuating oil prices (Alaska Air Q3 2024).

The merger of West Coast airlines leverages each airline's unique strengths. HA's Pacific-focused routes complement AS's extensive onland network. Together, they are able to capitalize on new growth opportunities and serve a more diverse customer base, particularly in high-demand vacation destinations.

Alaska Air Group CEO Ben Minicucci noted that the combination increases operational scale and strengthens the airline's ability to adapt to industry changes and navigate new competitive landscapes with best-in-class pre-tax margins and financial stability.

By the end of 2024, Alaska Air Group expects to be among the top three U.S. airlines in pretax margin, setting a new standard for operational resilience and strategic direction among domestically focused airlines.

Alaska Airlines Q3 Results, Q4 Expectations

• Expectations for the third quarter (July 17, 2024):
  • ASMs vs. 2023: 2% to 3% increase
  • CASMex vs. 2023: High single-digit increase
  • RASM vs. 2023: Flat to positive
  • Economic fuel cost per gallon: $2.85 to $2.95
  • Adjusted pre-tax profit (in millions): —
  • Adjusted earnings per share: $1.40 to $1.60
• Expectations for the third quarter (September 12, 2024):
  • ASMs vs. 2023: 2% to 3% increase
  • CASMex vs. 2023: High single-digit increase
  • RASM vs. 2023: ~2% increase
  • Economic fuel cost per gallon: $2.60 to $2.70
  • Adjusted pre-tax profit (in millions): —
  • Adjusted earnings per share: $2.15 to $2.25
• Air Group Q3 Consolidated Results:
  • ASMs compared to 2023: increase of 6.8%
  • CASMex vs. 2023: Plus 6.9%
  • RASM vs. 2023: increase of 1.3%
  • Economic fuel cost per gallon: $2.61
  • Adjusted profit before taxes (in millions): $399
  • Adjusted earnings per share: $2.25
• Earnings contribution from Hawaiian Airlines in the third quarter:
  • ASMs vs. 2023: 4.1 points
  • CASMex vs. 2023: 0.2 points
  • RASM vs. 2023: (0.8) points
  • Economic fuel cost per gallon: $2.35
  • Adjusted profit before taxes (in millions): US$(14)
  • Adjusted earnings per share: US$ (0.09)
• Q4 expectation:
  • Capacity (ASMs) % change from 2023: increase of 1.5% to 2.5%
  • CASMex % change from 2023: High single-digit increase
  • RASM% change from 2023: Mid-single-digit increase
  • Economic fuel cost per gallon: $2.55 to $2.65
  • Adjusted earnings per share(a): $0.20 to $0.40

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