Alaska Air Group Reports Strong Third Quarter 2024

DALLAS — Alaska Air Group (AS) achieved a significant milestone in the third quarter of 2024, leading the airline industry with an adjusted 13% pretax margin. 

The airline posted a GAAP pretax margin of 10.7% and earnings per share (EPS) of US$1.84, underscoring its robust financial health and operational excellence. Additionally, completing its acquisition of Hawaiian Airlines (HA) on September 18, 2024, contributed 13 days of performance to the quarter's results, enhancing Alaska's already solid standing in the industry.

Key third-quarter highlights include a strategic increase in capacity, which supported both airlines' expansive networks. Unit revenues experienced a favorable trend, driven by strong demand and pricing power, while unit costs remained under control due to AS’ “commitment to cost discipline.”

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

The combination of the West Coast airlines capitalizes on each carrier's unique strengths. HA's Pacific-focused routes complement AS’ extensive mainland network. Together, they are positioned to capture new growth opportunities and serve a more diverse customer base, particularly in high-demand leisure destinations. 

Alaska Air Group's CEO, Ben Minicucci, noted that the merger enhances operational scale and strengthens the airline's ability to adapt to industry shifts and embrace new competitive landscapes with top-tier pretax margins and financial stability.

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

Alaska Airlines Q3 Results, Q4 Expectations

• Q3 Expectations (July 17, 2024):
  • ASMs vs. 2023: Up 2% to 3%
  • CASMex vs. 2023: Up high single digits
  • RASM vs. 2023: Flat to positive
  • Economic fuel cost per gallon: US$2.85 to US$2.95
  • Adjusted pretax income (in millions): --
  • Adjusted earnings per share: US$1.40 to US$1.60
• Q3 Expectations (September 12, 2024):
  • ASMs vs. 2023: Up 2% to 3%
  • CASMex vs. 2023: Up high single digits
  • RASM vs. 2023: Up ~2%
  • Economic fuel cost per gallon: US$2.60 to US$2.70
  • Adjusted pretax income (in millions): --
  • Adjusted earnings per share: US$2.15 to US$2.25
• Q3 Consolidated Air Group Results:
  • ASMs vs. 2023: Up 6.8%
  • CASMex vs. 2023: Up 6.9%
  • RASM vs. 2023: Up 1.3%
  • Economic fuel cost per gallon: US$2.61
  • Adjusted pretax income (in millions): US$399
  • Adjusted earnings per share: US$2.25
• Q3 Hawaiian Airlines Contribution to Results:
  • ASMs vs. 2023: 4.1 pts
  • CASMex vs. 2023: 0.2 pts
  • RASM vs. 2023: (0.8) pts
  • Economic fuel cost per gallon: US$2.35
  • Adjusted pretax income (in millions): US$(14)
  • Adjusted earnings per share: US$(0.09)
• Q4 Expectation:
  • Capacity (ASMs) % change versus 2023: Up 1.5% to 2.5%
  • CASMex % change versus 2023: Up high single digits
  • RASM % change versus 2023: Up mid-single digits
  • Economic fuel cost per gallon: US$2.55 to US$2.65
  • Adjusted earnings per share(a): US$0.20 to US$0.40