January 22, 2025

Media contact:						Investor/analyst contact:
Media Relations						Ryan St. John
(206) 304-0008						VP Finance, Planning and Investor Relations
						ALKInvestorRelations@alaskaair.com

SEATTLE — Alaska Air Group Inc. (NYSE: ALK) today reported financial results for the fourth quarter and full year ended December 31, 2024.

Air Group completed 2024 on a high note, with record revenues of $11.7 billion and a GAAP pretax margin of 4.6%. On an adjusted basis, the full year pretax margin of 7.1% is expected to be amongst the best in the industry despite the completed acquisition of Hawaiian Airlines and fleet grounding in the first quarter of the year.

"This was a transformational year as we brought Hawaiian Airlines into Alaska Air Group and began our journey to unlock $1 billion in incremental pretax profit over the next three years,” said CEO Ben Minicucci. “We’re proud that our incentive plan will reward Alaska Airlines and Horizon Air employees with nearly six weeks of pay, which we believe will lead the industry. Looking forward, our vision is clear and we’re focused on executing our strategic plan – leveraging the strengths of our combined network, enhancing the end-to-end travel experience for our guests, and delivering value for everyone who depends on us."

Air Group’s consolidated results reported in the fourth quarter and full year 2024 include Hawaiian Airlines as of September 18, 2024 while prior comparable periods exclude any Hawaiian results. Discussion of fourth quarter results and forward-looking guidance refer to pro forma historical results as provided in prior 8-K filings and represented below.

Our GAAP pretax margin for the fourth quarter was 2.2% and GAAP earnings per share was $0.55. On an adjusted basis, our pretax margin was 3.9% and earnings per share was $0.97, which exceeded our latest guidance by approximately $0.50 at the midpoint driven by revenue and cost improvement across our business as well as lower non-operating expenses. Due to these same out-performance factors, full year adjusted EPS of $4.87 also surpassed the better end of our prior guidance range.

Fourth quarter revenue was stronger than expected across both Alaska and Hawaiian, building on the strength seen in the fall, and exiting the year with momentum driven by sustained leisure demand and an uptick in corporate travel which improved close in demand. With mild winter weather to end the year, we delivered reliable operational performance for our guests throughout the holiday travel period, with higher-than-expected completion rate and load factor. After inflecting positive in August, unit revenues improved nearly 6 points sequentially from 1% in the third quarter to 7% in the fourth quarter. This momentum has continued, with ongoing close-in strength in early Q1 bookings. Combined with a stable industry capacity backdrop, we are encouraged by these early indications for Q1 and a constructive start to 2025.

Unit cost performance in the fourth quarter also exceeded our guidance, up 8.6% as compared to pro forma 2023, as disciplined non-fuel cost performance offset higher performance-based pay accruals and better completion rates drove higher capacity. Throughout 2024, unit costs remained pressured from constrained capacity as a result of aircraft delivery delays, but are expected to improve through 2025 as we normalize resource levels and capacity compared to 2024.

Following a great close to 2024, we continue to build on our strong foundation and execute on Alaska Accelerate - our vision for the future. This strategy is focused on building scale, relevance and loyalty to connect our guests to the world with a remarkable travel experience rooted in safety, care and performance and deliver $1 billion in incremental profit over the next 3 years.

"Our success this year and our optimistic look ahead is built upon a proven strategy that puts the guest at the center of everything we do and unlocks new opportunities across our business," said Chief Commercial Officer, Andrew Harrison. "We’re poised to capitalize on the strength of a combined global network, a powerful loyalty program, two beloved brands, and a remarkable travel experience that meets guests’ needs at every phase of the travel journey."

For the first quarter and full year 2025, we expect the following results compared to pro forma historical results as if the acquisition had occurred on January 1, 2023.

•Reported net income for the fourth quarter and full year 2024 under Generally Accepted Accounting Principles (GAAP) of $71 million, or $0.55 per share, and $395 million, or $3.08 per share. These results compare to net loss for the fourth quarter and net income for the full year 2023 of $2 million, or $0.02 per share, and $235 million, or $1.83 per share.

•Reported net income for the fourth quarter and full year 2024, excluding special items and other adjustments, of $125 million, or $0.97 per share, and $625 million, or $4.87 per share. These results compare to net income for the fourth quarter and full year 2023, excluding special items and other adjustments, of $38 million, or $0.30 per share, and $583 million, or $4.53 per share.

•Generated an adjusted pretax margin of 7.1% for the full year 2024, among the highest in the industry.

•Generated $1.5 billion in operating cash flow for the full year 2024.

•Completed $2 billion in financing, backed by the Company's Mileage Plan program, and retired $1.6 billion of certain debt acquired with Hawaiian Airlines.

•Repurchased 3.9 million shares of common stock for approximately $250 million in the fourth quarter, bringing total repurchases to 5.5 million shares for $312 million in 2024.

•Authorized a new $1 billion dollar share repurchase plan to be executed over the next four years, with repurchases beginning in January 2025.

•Alaska and Horizon employees earned $325 million of incentive pay in 2024 by achieving profitability, safety, sustainability, and operational targets. The payout represents approximately six weeks of pay for most employees.

•Reached an Agreement in Concept with Alaska flight attendants for an updated collective bargaining agreement in January 2025.

•Announced the launch of Seattle as an international gateway with nonstop routes to Tokyo Narita and Seoul Incheon in 2025, with plans to add 12 international widebody destinations by 2030.

•Approved to fly nonstop service between San Diego International Airport and Ronald Reagan Washington National Airport, making Alaska the only airline to operate this route.

•Expanding service from the states of Alaska and Oregon beginning this summer, including nonstop service from Anchorage to Detroit and Sacramento; Portland to Houston, Fairbanks, and Eugene; and Medford to San Diego.

•Hawaiian received two A330-300 freighter aircraft from Amazon during the fourth quarter, bringing the total within the airline's fleet to six.

•Announced improvements to Alaska's Mileage Plan for 2025, including more milestone rewards and new ways to earn elite qualifying miles.

•Introduced Alaska's new premium credit card, which will be available late summer 2025 and will provide holders exclusive travel benefits and perks.

•Launched Huaka'i by Hawaiian, a free program for HawaiianMiles members that offers kama‘āina (Hawai'i residents) exclusive travel benefits when flying with Hawaiian Airlines.

The following table reconciles the company's reported GAAP net income (loss) per share (EPS) for the three and twelve months ended December 31, 2024 and 2023 to adjusted amounts.

			Three Months Ended December 31,
			2024												2023
(in millions, except per share amounts)			Dollars						Per Share						Dollars						Per Share
Net income (loss)			$	71					$	0.55					$	(2)					$	(0.02)
Mark-to-market fuel hedge adjustments			(6)						(0.05)						12						0.09
Unrealized gain on foreign debt			(10)						(0.08)						—						—
Special items - operating			91						0.71						37						0.29
Special items - net non-operating			(17)						(0.13)						4						0.03
Income tax effect of adjustments above(a)			(4)						(0.03)						(13)						(0.09)
Adjusted net income			$	125					$	0.97					$	38					$	0.30

(a) Certain integration costs are non deductible for tax purposes, resulting in a smaller income tax effect for current year adjustments.

A conference call regarding the fourth quarter and full year results will be streamed online at 8:30 a.m. PST on January 23, 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 Quarterly Report on Form 10-Q for the period ended September 30, 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, ESG and other strategic goals, seasonal fluctuations in demand and financial results, supply chain risks, events that negatively impact aviation safety and security, 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-Q 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 Air Group, Inc. is based in Seattle and comprised of subsidiaries Alaska Airlines, Hawaiian Holdings, Inc., Horizon Air and McGee Air Services. With our recent acquisition of Hawaiian Airlines, we now serve more than 140 destinations throughout North America, Central America, Asia and the Pacific. We are committed to safety, remarkable customer care, operational excellence, financial performance and sustainability. Alaska Airlines is a member of the oneworld Alliance. With oneworld and our additional global partners, our guests have more choices than ever to purchase, earn or redeem on alaskaair.com across 31 airlines and more than 1,000 worldwide destinations. Book travel throughout the Pacific on Hawaiian Airlines at hawaiianairlines.com. Learn more about Alaska Airlines at news.alaskaair.com and Hawaiian Airlines at newsroom.hawaiianairlines.com/blog. Alaska Air Group is traded on the New York Stock Exchange (NYSE) as “ALK.”

###

(a) As reported in Form 10-Q for the third quarter of 2024.

(b) Cash flows for the three months ended December 31, 2024 can be calculated by subtracting cash flows for the nine months ended

September 30, 2024, as reported in Form 10-Q for the third quarter 2024, from the year ended December 31, 2024.

(c) Cash, cash equivalents, and restricted cash shown in the Summary Cash Flow consists of restricted cash presented within Restricted Cash as well as certain restricted cash balances presented within Other noncurrent assets in the condensed consolidated balance sheets.

Air Group has classified certain operating and non-operating activity as special items due to their unusual or infrequently occurring nature. We believe disclosing information about these items separately improves comparable year-over-year analysis and allows stakeholders to better understand our results of operations. A description of the special items is provided below.

Fleet transition: Fleet transition costs (benefits) are associated with the retirement and disposition of Airbus acquired from Virgin America and Q400 aircraft.

Labor agreements: Labor agreement costs in 2024 are for retroactive pay for Alaska flight attendants pursuant to the agreement in concept reached in January 2025. Costs in 2023 are for contractual changes to Alaska pilots' sick leave benefits.

Integration costs: Integration costs are associated with the acquisition of Hawaiian Airlines and primarily consist of legal and professional fees, change in control payments, and other employee-related expenses.

Litigation: Litigation costs represent expenses associated with the Virgin trademark license agreement with the Virgin Group and recorded following a negative ruling in an appeal case in 2024.

Net non-operating: The income in 2024 is for gains on Hawaiian debt extinguishment in the fourth quarter. The expense in 2023 is primarily for interest expense associated with certain Virgin America A321neo lease agreements which were modified as part of Alaska's fleet transition.

(a)Except for FTEs, data includes information related to third-party regional capacity purchase flying arrangements.

(b)See a reconciliation of this non-GAAP measure and Note A for a discussion of the importance of this measure to investors in the accompanying pages.

(c)Excludes operations under the Air Transportation Services Agreement (ATSA) with Amazon.

(d)Includes aircraft owned and leased by Alaska, Hawaiian, and Horizon as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excludes all aircraft removed from operating service.

(e)Data presented includes information related to flights operated by Horizon and third-party carriers.

We are providing reconciliations of reported non-GAAP financial measures to their most directly comparable financial measures reported on a GAAP basis. Amounts in the tables below are rounded to the nearest million. As a result, a manual recalculation of certain figures using these rounded amounts may not agree directly to the actual figures presented in the tables below.

(a) Amount excludes $20 million of Hawaiian Airlines freighter costs already included within Freighter costs.

OPERATING SEGMENTS (unaudited)
Alaska Air Group, Inc.
			Three Months Ended December 31, 2024
(in millions)			Alaska Airlines						Hawaiian Airlines						Regional						Consolidating & Other(a)						Air Group Adjusted(b)						Adjustments(c)						Consolidated
Operating Revenue
Passenger revenue			$	2,073					$	673					$	432					$	—					$	3,178					$	—					$	3,178
Loyalty program other revenue			161						48						15						—						224						—						224
Cargo and other revenue			77						53						—						2						132						—						132
Total Operating Revenue			2,311						774						447						2						3,534						—						3,534
Operating Expenses
Operating expenses, excluding fuel			1,736						619						330						(17)						2,668						91						2,759
Fuel expense			447						172						89						—						708						(6)						702
Total Operating Expenses			2,183						791						419						(17)						3,376						85						3,461
Non-operating Income (Expense)			14						(27)						—						(8)						(21)						27						6
Income (Loss) Before Income Tax			$	142					$	(44)					$	28					$	11					$	137					$	(58)					$	79
			Three Months Ended December 31, 2023
(in millions)			Alaska Airlines						Hawaiian Airlines						Regional						Consolidating & Other(a)						Air Group Adjusted(b)						Adjustments(c)						Consolidated
Operating Revenue
Passenger revenue			$	1,928					$	—					$	398					$	—					$	2,326					$	—					$	2,326
Loyalty program other revenue			152						—						13						—						165						—						165
Cargo and other revenue			60						—						—						2						62						—						62
Total Operating Revenue			2,140						—						411						2						2,553						—						2,553
Operating Expenses
Operating expenses, excluding fuel			1,499						—						289						(13)						1,775						37						1,812
Fuel expense			592						—						105						—						697						12						709
Total Operating Expenses			2,091						—						394						(13)						2,472						49						2,521
Non-operating Income (Expense)			(12)						—						—						(12)						(24)						(4)						(28)
Income (Loss) Before Income Tax			$	37					$	—					$	17					$	3					$	57					$	(53)					$	4

    

OPERATING SEGMENTS (unaudited)
Alaska Air Group, Inc.
			Twelve Months Ended December 31, 2024
(in millions)			Alaska Airlines						Hawaiian Airlines						Regional						Consolidating & Other(a)						Air Group Adjusted(b)						Adjustments(c)						Consolidated
Operating Revenue
Passenger revenue			$	8,151					$	757					$	1,746					$	—					$	10,654					$	—					$	10,654
Loyalty program other revenue			621						53						59						—						733						—						733
Cargo and other revenue			279						59						—						10						348						—						348
Total Operating Revenue			9,051						869						1,805						10						11,735						—						11,735
Operating Expenses
Operating expenses, excluding fuel			6,406						701						1,276						(69)						8,314						345						8,659
Fuel expense			1,962						195						377						—						2,534						(28)						2,506
Total Operating Expenses			8,368						896						1,653						(69)						10,848						317						11,165
Non-operating Income (Expense)			20						(31)						—						(40)						(51)						26						(25)
Income (Loss) Before Income Tax			$	703					$	(58)					$	152					$	39					$	836					$	(291)					$	545
			Twelve Months Ended December 31, 2023
(in millions)			Alaska Airlines						Hawaiian Airlines						Regional						Consolidating & Other(a)						Air Group Adjusted(b)						Adjustments(c)						Consolidated
Operating Revenue
Passenger revenue			$	8,010					$	—					$	1,516					$	—					$	9,526					$	—					$	9,526
Loyalty program other revenue			599						—						49						—						648						—						648
Cargo and other revenue			244						—						—						8						252						—						252
Total Operating Revenue			8,853						—						1,565						8						10,426						—						10,426
Operating Expenses
Operating expenses, excluding fuel			5,841						—						1,121						(14)						6,948						443						7,391
Fuel expense			2,264						—						379						—						2,643						(2)						2,641
Total Operating Expenses			8,105						—						1,500						(14)						9,591						441						10,032
Non-operating Income (Expense)			(15)						—						—						(38)						(53)						(18)						(71)
Income (Loss) Before Income Tax			$	733					$	—					$	65					$	(16)					$	782					$	(459)					$	323

(a)Includes consolidating entries, Air Group parent company, Horizon, McGee Air Services, and other immaterial business units.

(b)The Air Group Adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocation and excludes certain charges.

(c)Includes special items, mark-to-market fuel hedge accounting adjustments, and unrealized gain on foreign debt.

Note A: Pursuant to Regulation G, we are providing reconciliations of reported non-GAAP financial measures to their most directly comparable financial measures reported on a GAAP basis. We believe that consideration of these non-GAAP financial measures may be important to investors for the following reasons:

•By excluding certain costs from our unit metrics, we believe that we have better visibility into the results of operations. Our industry is highly competitive and is characterized by high fixed costs, so even a small reduction in non-fuel operating costs can result in a significant improvement in operating results. We believe that all U.S. carriers are similarly impacted by changes in jet fuel costs over the long run, so it is important for management and investors to understand the impact of company-specific cost drivers which are more controllable by management. We adjust for expenses related directly to our freighter aircraft operations, including those costs incurred under the ATSA with Amazon, to allow for better comparability to other carriers that do not operate freighter aircraft. We also exclude certain special charges as they are unusual or nonrecurring in nature and adjusting for these expenses allows management and investors to better understand our cost performance.

•CASMex is one of the most important measures used by management and by the Air Group Board of Directors in assessing quarterly and annual cost performance. CASMex is also a measure commonly used by industry analysts, and we believe it is the basis by which they have historically compared our airline to others in the industry. The measure is also the subject of frequent questions from investors.

•Adjusted pretax income is an important metric for the employee incentive plan, which covers the majority of Air Group employees.

•Disclosure of the individual impact of certain noted items provides investors the ability to measure and monitor performance both with and without these special items. We believe that disclosing the impact of these items as noted above is important because it provides information on significant items that are not necessarily indicative of future performance. Industry analysts and investors consistently measure our performance without these items for better comparability between periods and among other airlines.

•Although we disclose our unit revenue, we do not, nor are we able to, evaluate unit revenue excluding the impact that changes in fuel costs have had on ticket prices. Fuel expense represents a large percentage of our total operating expenses. Fluctuations in fuel prices often drive changes in unit revenue in the mid-to-long term. Although we believe it is useful to evaluate non-fuel unit costs for the reasons noted above, we would caution readers of these financial statements not to place undue reliance on unit costs excluding fuel as a measure or predictor of future profitability because of the significant impact of fuel costs on our business.

Adjusted net debt - long-term debt, including current portion, plus capitalized operating and finance leases, less cash, restricted cash, and marketable securities

Adjusted net debt to EBITDAR - represents net adjusted debt divided by EBITDAR (trailing twelve months earnings before interest, taxes, depreciation, amortization, special items and rent)

Aircraft Utilization - block hours per day; this represents the average number of hours per day our aircraft are in transit

Aircraft Stage Length - represents the average miles flown per aircraft departure

ASMs - available seat miles, or “capacity”; represents total seats available across the fleet multiplied by the number of miles flown

CASM - operating costs per ASM; represents all operating expenses including fuel, freighter costs, and special items

CASMex - operating costs excluding fuel, freighter costs, and special items per ASM, or "unit cost"

Debt-to-capitalization ratio - represents adjusted debt (long-term debt plus capitalized operating and finance lease liabilities) divided by total equity plus adjusted debt

Diluted Earnings per Share - represents earnings per share (EPS) using fully diluted shares outstanding

Diluted Shares - represents the total number of shares that would be outstanding if all possible sources of conversion, such as stock options, were exercised

Economic Fuel - best estimate of the cash cost of fuel, net of the impact of our fuel-hedging program and excluding operations under the Air Transportation Service Agreement (ATSA) with Amazon

Freighter Costs - operating expenses directly attributable to the operation of Alaska's B737 freighter aircraft and Hawaiian's A330-300 freighter aircraft exclusively performing cargo missions

Load Factor - RPMs as a percentage of ASMs; represents the number of available seats that were filled with paying passengers

PRASM - passenger revenue per ASM, or "passenger unit revenue"

RASM - operating revenue per ASMs, or "unit revenue"; operating revenue includes all passenger revenue, freight & mail, loyalty program revenue, and other ancillary revenue; represents the average total revenue for flying one seat one mile

RPMs - revenue passenger miles, or "traffic"; represents the number of seats that were filled with paying passengers; one passenger traveling one mile is one RPM

Yield - passenger revenue per RPM; represents the average passenger revenue for flying one passenger one mile

The following presents certain unaudited pro forma condensed combined statements of operations for the quarter-to-date periods ending March 31, 2024, June 30, 2024 and September 30, 2024 and the year-to-date period ending December 31, 2024. The pro forma financial information is based upon the combined historical financial statements of Alaska Air Group, Inc., ("Air Group") and Hawaiian Holdings, Inc., (“Hawaiian”), after giving effect to Air Group’s purchase of all the issued and outstanding shares of Hawaiian by means of a merger (the “Merger”). For the quarter-to-date period ended September 30, 2024, the Hawaiian column reflects results prior to the consummation of the merger, comprising the period of July 1, 2024 to September 17, 2024. The combined pro forma information includes adjustments in accordance with Article 11 of Regulation S-X to illustrate the effects of the merger as if it had occurred on January 1, 2023, the beginning of the earliest period presented.

Management believes pro forma combined operating results for prior periods are useful for the purpose of comparing our actual or expected future operating results, as it provides a relevant baseline for identifying trends in the overall operating performance of our business. Management also believes the recalculation of certain operating statistics, unit metrics and certain non-GAAP measures on a pro forma basis to be useful in review of operating results.

"Other Adjustments" in the unaudited pro forma combined statements of operations reflect the preliminary allocation of the purchase price to the acquired assets and liabilities based upon estimates of fair values. These adjustments are provisional and subject to further adjustment up to September 18, 2025 as additional information becomes available, additional analyses are performed and as warranted by changes in current conditions and future expectations. Differences between these preliminary estimates and the final acquisition accounting will occur and these differences could have a material impact on the unaudited pro forma condensed combined financial information and the Combined Company’s future results of operations. Differences from previously filed pro forma information reflects the impact of permissible measurement period adjustments and certain immaterial line item reclassifications to better conform presentation.

The unaudited pro forma condensed combined financial information is presented for informational purposes only. Such information is not necessarily indicative of the operating results or financial position that actually would have been achieved if the Merger had been consummated on the dates indicated or that the Combined Company may achieve in future periods. Specifically, the unaudited pro forma condensed combined financial information does not include any projected synergies expected to be achieved as a result of the Merger or any associated costs that may be incurred to achieve any projected synergies. The unaudited pro forma condensed combined financial information also exclude the costs associated with any integration activities that may result from the Merger.