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☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

 

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from                      to                      

 

Delaware						91-1292054
(State of Incorporation)						(I.R.S. Employer Identification No.)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐ 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange

Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer    (Do not check if a smaller reporting company)

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

 

The registrant has 121,392,507 common shares, par value $0.01, outstanding at April 30, 2025.

This document is also available on our website at https://investor.alaskaair.com.

 

 

In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or the Company’s present expectations.

You should not place undue reliance on our forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control. Our forward-looking statements are based on the information currently available to us and speak only as of the date on which this report was filed with the SEC. Other than as required by law, we expressly disclaim any obligation to issue any updates or revisions to our forward-looking statements, even if subsequent events cause our expectations to change regarding the matters discussed in those statements. For a discussion of risks and uncertainties that may cause our forward-looking statements to differ materially, see Item 1A. "Risk Factors” within 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, and changes in laws and regulations that impact our business. Please consider our forward-looking statements in light of those risks as you read this report.

 

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in millions)			March 31, 2025						December 31, 2024
ASSETS
Current Assets
Cash and cash equivalents			$	1,044					$	1,201
Restricted cash			28						29
Marketable securities			1,420						1,274
Total cash, restricted cash, and marketable securities			2,492						2,504
Receivables - net			569						558
Inventories and supplies - net			206						199
Prepaid expenses			281						307
Other current assets			173						192
Total Current Assets			3,721						3,760
Property and Equipment
Aircraft and other flight equipment			12,619						12,273
Other property and equipment			2,197						2,173
Deposits for future flight equipment			700						883
			15,516						15,329
Less accumulated depreciation and amortization			(4,649)						(4,548)
Total Property and Equipment - Net			10,867						10,781
Other Assets
Operating lease assets			1,313						1,296
Goodwill			2,724						2,724
Intangible assets - net			859						873
Other noncurrent assets			334						334
Total Other Assets			5,230						5,227
Total Assets			$	19,818					$	19,768

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(in millions, except share amounts)			March 31, 2025						December 31, 2024
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable			$	237					$	186
Accrued wages, vacation and payroll taxes			749						1,001
Air traffic liability			2,204						1,712
Other accrued liabilities			1,042						997
Deferred revenue			1,727						1,592
Current portion of long-term debt			519						442
Current portion of operating lease liabilities			214						207
Current portion of finance lease liabilities			8						8
Total Current Liabilities			6,700						6,145
Noncurrent Liabilities
Long-term debt, net of current portion			4,290						4,491
Operating lease liabilities, net of current portion			1,200						1,198
Finance lease liabilities, net of current portion			45						47
Deferred income taxes			871						934
Deferred revenue			1,587						1,664
Obligation for pension and post-retirement medical benefits			457						460
Other liabilities			531						457
Total Noncurrent Liabilities			8,981						9,251
Commitments and Contingencies (Note 7)
Shareholders' Equity
Preferred stock, $0.01 par value, Authorized: 5,000,000 shares, none issued or outstanding			—						—
Common stock, $0.01 par value, Authorized: 400,000,000 shares, Issued: 2025 - 142,980,909 shares; 2024 - 141,449,174 shares, Outstanding: 2025 - 122,884,518 shares; 2024 - 123,119,199 shares			1						1
Capital in excess of par value			844						811
Treasury stock (common), at cost: 2025 - 20,096,391 shares; 2024 - 18,329,975 shares			(1,238)						(1,131)
Accumulated other comprehensive loss			(234)						(239)
Retained earnings			4,764						4,930
Total Shareholders' Equity			4,137						4,372
Total Liabilities and Shareholders' Equity			$	19,818					$	19,768

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

			Three Months Ended March 31,
(in millions, except per share amounts)			2025						2024
Operating Revenue
Passenger revenue			$	2,808					$	2,004
Loyalty program other revenue			207						164
Cargo and other revenue			122						64
Total Operating Revenue			3,137						2,232
Operating Expenses
Wages and benefits			1,127						804
Variable incentive pay			62						44
Aircraft fuel, including hedging gains and losses			681						565
Aircraft maintenance			220						122
Aircraft rent			62						47
Landing fees and other rentals			242						165
Contracted services			145						97
Selling expenses			100						77
Depreciation and amortization			194						126
Food and beverage service			85						58
Third-party regional carrier expense			64						54
Other			261						205
Special items - operating			91						34
Total Operating Expenses			3,334						2,398
Operating Loss			(197)						(166)
Non-operating Income (Expense)
Interest income			26						17
Interest expense			(66)						(35)
Interest capitalized			12						6
Other - net			(8)						—
Total Non-operating Expense			(36)						(12)
Loss Before Income Tax			(233)						(178)
Income tax benefit			(67)						(46)
Net Loss			$	(166)					$	(132)
Basic Loss Per Share:			$	(1.35)					$	(1.05)
Diluted Loss Per Share:			$	(1.35)					$	(1.05)
Weighted Average Shares Outstanding used for computation:
Basic			123.134						125.970
Diluted			123.134						125.970

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS (unaudited)

			Three Months Ended March 31,
(in millions)			2025						2024
Net Loss			$	(166)					$	(132)
Other comprehensive income (loss), net of tax
Marketable securities			9						1
Employee benefit plans			2						3
Interest rate derivative instruments			(6)						1
Total other comprehensive income, net of tax			$	5					$	5
Total Comprehensive Loss, Net of Tax			$	(161)					$	(127)

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

						Three Months Ended March 31,
(in millions)						2025						2024
Cash Flows from Operating Activities:
Net Loss						$	(166)					$	(132)
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization						194						126
Stock-based compensation and other						20						19
Non-cash special items						52						23
Changes in certain assets and liabilities:
Changes in deferred income taxes						(65)						(47)
Increase in accounts receivable						(11)						(55)
Increase in air traffic liability						492						468
Increase in deferred revenue						58						30
Other - net						(115)						(140)
Net cash provided by operating activities						459						292
Cash Flows from Investing Activities:
Property and equipment additions
Aircraft and aircraft purchase deposits						(142)						31
Other flight equipment						(54)						(44)
Other property and equipment						(42)						(44)
Supplier proceeds						—						162
Purchases of marketable securities						(470)						(13)
Sales and maturities of marketable securities						336						133
Other investing activities						(9)						93
Net cash provided by (used in) investing activities						(381)						318
Cash Flows from Financing Activities:
Proceeds from issuance of long-term debt, net of issuance costs						—						149
Long-term debt payments						(156)						(102)
Common stock repurchases						(105)						(20)
Other financing activities						25						(32)
Net cash used in financing activities						(236)						(5)
Net increase (decrease) in cash and cash equivalents						(158)						605
Cash, cash equivalents, and restricted cash at beginning of period						1,257						308
Cash, cash equivalents, and restricted cash at end of the period						$	1,099					$	913
Supplemental disclosure:
Cash paid during the period for:
Interest, net of amount capitalized						$	67					$	35
Non-cash transactions:
Right-of-use assets acquired through operating leases						$	62					$	13
Property and equipment acquired through the issuance of debt						$	23					$	45
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents						$	1,044					$	885
Restricted cash						28						—
Restricted cash included in Other noncurrent assets						27						28
Total cash, cash equivalents, and restricted cash at end of the period						$	1,099					$	913

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

 

The unaudited condensed consolidated financial statements include the accounts of Alaska Air Group (Air Group, or "the Company"), and its primary subsidiaries, Alaska Airlines, Inc. (Alaska), Horizon Air Industries, Inc. (Horizon), and, beginning September 18, 2024, Hawaiian Holdings, Inc. (Hawaiian). The unaudited condensed consolidated financial statements also include McGee Air Services (McGee), a ground services subsidiary of Alaska, and other immaterial business units. All intercompany balances and transactions have been eliminated. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. It should be read in conjunction with the consolidated financial statements and accompanying notes in the Form 10-K for the year ended December 31, 2024. In the opinion of management, all adjustments have been made that are necessary to fairly present the Company’s financial position as of March 31, 2025 and the results of operations for the three months ended March 31, 2025 and 2024. Such adjustments were of a normal recurring nature. Certain rows, columns, figures, or percentages may not recalculate due to rounding.

In preparing these statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities, as well as the reported amounts of revenue and expenses, including impairment charges. Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, changes in global economic conditions, changes in the competitive environment, and other factors, operating results for the three months ended March 31, 2025 are not necessarily indicative of operating results for the entire year.

On September 18, 2024, the Company completed its acquisition of Hawaiian Holdings, Inc. The Company paid shareholders $18.00 per share, or approximately $936 million in cash for 52 million outstanding voting shares of Hawaiian. An additional $41 million was paid in cash for change in control payments and settlement of accelerated and vested awards, resulting in total consideration of $977 million. The combination brings together two complementary networks and expands consumer choice across Hawai'i, the West Coast, and international destinations. Along with enhanced network utility, the combined carriers' diversified product offerings and focus on high quality service and operational performance enhance Air Group's competitive position.

The transaction has been accounted for as a business combination using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized on the balance sheet at their fair values as of the acquisition date. The fair values of the assets acquired and liabilities assumed were determined using a market basis, relief from royalty, or multi-period excess earnings approach. As of March 31, 2025, the determination of fair values of property and equipment, certain liabilities included in other accrued liabilities and other liabilities, goodwill, intangible assets, and deferred income taxes was substantially complete, but is still considered provisional. Management will evaluate estimates and assumptions utilized to calculate fair value as new information is received, and will adjust amounts recorded as necessary up to one year following transaction close. There were no fair value adjustments made in the three months ended March 31, 2025.

Provisional fair values of the assets acquired and the liabilities assumed as of the acquisition date, September 18, 2024, as of March 31, 2025 and December 31, 2024 were as follows:

For the three months ended March 31, 2025, the Company incurred costs directly attributable to the merger activities of $40 million. These costs are presented within Special items - operating within the unaudited condensed consolidated statements of operations. Refer to Note 12 for further information on special items. The Company expects to incur additional merger-related costs in 2025.

The unaudited pro forma financial information presented in the table below represents a summary of the consolidated results of operations for the Company and Hawaiian as if the acquisition of Hawaiian had been consummated as of January 1, 2023. The pro forma results do not include any anticipated synergies, or other expected benefits of the acquisition. Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been consummated as of January 1, 2023.

The pro forma information includes adjustments for merger-related costs of $267 million assumed to have been incurred on January 1, 2023.

Ticket revenue is recorded as Passenger revenue, and represents the primary source of the Company's revenue. Also included in Passenger revenue is passenger ancillary revenue such as bag fees, on-board food and beverage, and certain revenue from Alaska's Mileage Plan program and Hawaiian's HawaiianMiles program. Loyalty program other revenue includes brand and marketing revenue from the Alaska Airlines Visa Signature and Hawaiian Airlines World Elite Mastercard co-branded credit cards and other partners, and certain interline loyalty program revenue, net of commissions. Cargo and other revenue consists of freight and mail revenue, services provided to Amazon under the Air Transportation Services Agreement (the ATSA), and other ancillary revenue products such as lounge membership and certain commissions.

The level of detail within the Company’s unaudited condensed consolidated statements of operations and in this note depict the nature, amount, timing, and uncertainty of revenue and how cash flows are affected by economic and other factors.

Passenger revenue recognized in the unaudited condensed consolidated statements of operations:

			Three Months Ended March 31,
(in millions)			2025						2024
Passenger ticket revenue, net of taxes and fees			$	2,352					$	1,648
Passenger ancillary revenue			140						108
Loyalty program passenger revenue			316						248
Total Passenger revenue			$	2,808					$	2,004

Domestic passenger revenue includes operations in the U.S., including between the Hawaiian Islands (the Neighbor Island routes), and Canada. Latin America passenger revenue includes operations in Mexico, Costa Rica, Guatemala, Belize, and Bahamas. Pacific passenger revenue includes operations in the South Pacific, Australia, New Zealand, and Asia.

The table below presents the Company's passenger revenue by principal geographic region (as defined by the U.S. Department of Transportation):

Loyalty program revenue included in the unaudited condensed consolidated statements of operations:

			Three Months Ended March 31,
(in millions)			2025						2024
Loyalty program passenger revenue			$	316					$	248
Loyalty program other revenue			207						164
Total Loyalty program revenue			$	523					$	412

Cargo and other revenue included in the unaudited condensed consolidated statements of operations:

			Three Months Ended March 31,
(in millions)			2025						2024
Cargo revenue			$	57					$	28
Other revenue			65						36
Total Cargo and other revenue			$	122					$	64

The Company recognized Passenger revenue of $904 million and $584 million from the prior year-end air traffic liability balance for the three months ended March 31, 2025 and 2024.

The Company records a receivable for amounts due from affinity card partners and from other partners as mileage credits are sold until the payments are collected. The Company had $111 million of such receivables as of March 31, 2025 and $118 million as of December 31, 2024.

The table below presents a roll forward of the total loyalty program liability:

			Three Months Ended March 31,
(in millions)			2025						2024
Total Deferred Revenue balance at January 1			$	3,256					$	2,603
Travel miles and companion certificate redemption - Passenger revenue			(307)						(234)
Miles redeemed on partner airlines - Loyalty program other revenue			(49)						(28)
Increase in liability for mileage credits issued			414						292
Total Deferred Revenue balance at March 31			$	3,314					$	2,633

In determining fair value, there is a three-level hierarchy based on the reliability of the inputs used.

Level 1 refers to fair values based on quoted prices for identical instruments in active markets.

Level 2 refers to fair values estimated using significant other observable inputs such as similar instruments in active markets or quoted prices for identical or similar instrument in markets that are not active. Fair values for Level 2 instruments are determined using standard valuation models that incorporate inputs such as quoted prices for similar assets, interest rates, benchmark curves, credit ratings, and other observable inputs or market data.

Level 3 refers to fair values estimated using significant unobservable inputs for which there is little or no market data and that are significant to the fair value of the assets. Fair values for Level 3 instruments are determined using future cash flows and discount rates, which include information obtained from third-party valuation sources and other market sources, including recent offers from potential buyers.

As of March 31, 2025, cost basis and fair value for marketable securities were $1.4 billion. Differences in cost basis and fair value of marketable securities are primarily a result of changes in interest rates and general market conditions. The Company does not believe any unrealized losses are the result of credit quality based on its evaluation of industry and duration exposure, credit ratings of the securities, liquidity profiles, and other observable information as of March 31, 2025.

Fair values of financial instruments on the unaudited condensed consolidated balance sheets:

			March 31, 2025
(in millions)			Level 1						Level 2						Level 3						Total
Assets
Marketable securities
U.S. government and agency securities			$	311					$	—					$	—					$	311
Equity mutual funds			7						—						—						7
Asset-backed securities			—						170						3						173
Mortgage-backed securities			—						174						—						174
Corporate notes and bonds			—						737						—						737
Municipal securities and other			—						18						—						18
Total Marketable securities			$	318					$	1,099					$	3					$	1,420

			December 31, 2024
(in millions)			Level 1						Level 2						Level 3						Total
Assets
Marketable securities
U.S. government and agency securities			$	292					$	—					$	—					$	292
Equity mutual funds			7						—						—						7
Asset-backed securities			—						127						7						134
Mortgage-backed securities			—						112						—						112
Corporate notes and bonds			—						696						2						698
Municipal securities and other			—						31						—						31
Total Marketable securities			$	299					$	966					$	9					$	1,274

The fair value of derivative instruments, including fuel hedge contracts and interest rate swaps, was not material as of March 31, 2025 and December 31, 2024.

Maturities for marketable securities:

March 31, 2025 (in millions)			Cost Basis						Fair Value
Due in one year or less			$	427					$	427
Due after one year through five years			858						851
Due after five years through ten years			132						130
Due after ten years			6						6
No maturity date			5						6
Total			$	1,428					$	1,420

The Company uses the following methods and assumptions to determine the fair value of financial instruments that are not recognized at fair value as described below.

Debt: The estimated fair value of fixed-rate Enhanced Equipment Trust Certificate (EETC) debt and certain variable rate debt is Level 2, while the estimated fair value of $720 million of certain variable-rate and fixed-rate debt, including PSP notes payable and Japanese Yen denominated debt, is classified as Level 3.

Fixed-rate debt on the unaudited condensed consolidated balance sheets and the estimated fair value of long-term fixed-rate debt:

(in millions)			March 31, 2025						December 31, 2024
Fixed-rate debt			$	2,851					$	2,946
Estimated fair value			$	2,790					$	2,844

Certain assets and liabilities are recognized or disclosed at fair value on a nonrecurring basis, including property, plant and equipment, operating and finance lease assets, goodwill, and intangible assets. These assets are subject to fair valuation when there is evidence of impairment. No material impairments were recorded during the three months ended March 31, 2025.

 

Debt obligations on the unaudited condensed consolidated balance sheets:

(in millions)			March 31, 2025						December 31, 2024
Fixed-rate notes payable due through 2029			$	51					$	56
Fixed-rate PSP notes payable due through 2031			689						688
Fixed-rate EETCs payable due through 2027			800						864
Fixed-rate Japanese Yen denominated notes payable due through 2031			61						88
Variable-rate notes payable due through 2037			1,253						1,283
Loyalty financing, variable-rate term loan facility due through 2031			748						750
Loyalty financing, fixed-rate notes due through 2031			1,250						1,250
Less debt issuance costs			(43)						(46)
Total debt			4,809						4,933
Less current portion			519						442
Long-term debt, less current portion			$	4,290					$	4,491
Weighted-average fixed-interest rate			3.9		%				3.9		%
Weighted-average variable-interest rate			6.0		%				6.3		%

Approximately $554 million of the Company's total variable-rate notes payable are effectively fixed via interest rate swaps at March 31, 2025, resulting in an effective weighted-average interest rate for the full debt portfolio of 4.7%.

During the three months ended March 31, 2025, the Company incurred $23 million of debt as part of an agreement to finance certain E175 deliveries. Debt from this agreement is reflected as a non-cash transaction within the supplemental disclosures in the unaudited condensed consolidated statements of cash flows. During the three months ended March 31, 2025, the Company made debt payments of $156 million.

At March 31, 2025, debt principal payments for the next five years and thereafter are as follows:

(in millions)			Total
Remainder of 2025			$	307
2026			503
2027			701
2028			211
2029			777
Thereafter			2,381
Total Principal Payments(a)			$	4,880

(a) The Company recognized the long-term debt assumed in the Hawaiian acquisition at fair value as of the acquisition date. As a result, the amount in the unaudited condensed consolidated balance sheets will not equal the total balance of remaining principal payments presented in this table.

Alaska and Hawaiian have a combined revolving credit facility for $850 million, expiring in September 2029, which is secured by a combination of Air Group aircraft, slots, gates, routes, and other eligible assets. The facility has a variable interest rate based on SOFR plus a specified margin. As of March 31, 2025, the Company had no outstanding borrowing under this facility.

 

Alaska has a second credit facility for $76 million, expiring in June 2025, and is secured by aircraft. Alaska has secured letters of credit against this facility.

Certain debt agreements and credit facilities contain customary financial covenants, including compliance with certain debt service coverage ratios and minimum liquidity requirements. The Company and its subsidiaries were in compliance with these covenants as of March 31, 2025.

Net periodic benefit costs for qualified pension plans include the following:

			Three Months Ended March 31,
(in millions)			2025						2024
Service cost			$	7					$	7
Pension expense included in Wages and benefits			7						7
Interest cost			33						27
Expected return on assets			(37)						(32)
Recognized actuarial loss			3						5
Pension expense included in Non-operating Income (Expense)			$	(1)					$	—

Alaska and Hawaiian have contractual commitments for aircraft with Boeing. Horizon has contractual commitments for aircraft with Embraer. The amounts disclosed below reflect commitments for firm aircraft and engine orders. Option deliveries are excluded until exercise.

Boeing has communicated that certain B737 and B787-9 aircraft are expected to be delivered later than the contracted delivery timing. For Alaska, this includes certain B737-9 aircraft contracted for delivery in 2024 that have moved to 2025, certain B737-8 aircraft contracted for delivery in 2024 and 2025 that have moved later in the contracted year or into the year following the contracted delivery, and certain B737-10 aircraft contracted for delivery in 2025 and 2026 that have moved to 2026 or 2027, pending certification of the aircraft type. For Hawaiian, this includes certain B787-9 aircraft contracted for delivery between 2024 and 2026 that have been moved later into the contracted year or into the year following the contracted delivery. Management expects that other Boeing aircraft deliveries could be delayed beyond the contractual delivery. The tables below reflect Boeing's communications and management's internal expectations.

Details for contractual aircraft delivery commitments as of March 31, 2025:

Alaska has obligations associated with its CPA with SkyWest. The amounts disclosed below consider certain assumptions regarding the level of flying performed by the carrier on behalf of Alaska and exclude lease costs associated with the CPA.

A summary of aircraft-related and capacity purchase agreement commitments as of March 31, 2025:

(in millions)						Aircraft-Related Commitments						Capacity Purchase Agreements
Remainder of 2025						$	811					$	153
2026						784						207
2027						1,244						213
2028						1,222						219
2029						259						224
Thereafter						—						283
Total						$	4,320					$	1,299

The Company is a party to routine litigation matters incidental to its business and with respect to which no material liability is expected. Liabilities for litigation related contingencies are recorded when a loss is determined to be probable and estimable.

As part of the 2016 acquisition of Virgin America, Alaska assumed responsibility for the Virgin trademark license agreement with the Virgin Group. In 2019, pursuant to that agreement's venue provision, the Virgin Group sued Alaska in England, alleging that the agreement requires Alaska to pay $8 million per year as a minimum annual royalty through 2039, adjusted annually for inflation and irrespective of Alaska's actual use (or non-use) of the mark. Alaska stopped making royalty payments in 2019 after ending all use of the Virgin brand. On February 16, 2023, the commercial court issued a ruling adopting Virgin Group’s interpretation of the license agreement. The Company appealed the decision. On June 11, 2024, the appellate court issued a final decision affirming the lower court ruling in favor of the Virgin Group. Alaska also commenced a separate claim for breach of the agreement against the Virgin Group that may affect the Company’s total liability in the matter. Alaska holds an accrual for $57 million in Other accrued liabilities in the unaudited condensed consolidated balance sheets, representing the expenses associated with the trademark license agreement incurred through March 31, 2025, and management's current estimate of the amount due to the Virgin Group.

 

Alaska and Hawaiian have agreements with certain credit card companies to process the sale of tickets and other services. Under these agreements, there are material adverse change clauses that, if triggered, could result in the credit card companies holding back a reserve of up to 100% of the credit card receivable balance associated with that processor, which would result in a restriction of cash. For example, certain agreements require Alaska to maintain a reserve if Air Group's credit rating is downgraded to or below a rating specified by the agreement or if its cash and marketable securities balance fell below $500 million. The Company is not currently required to maintain any reserve under these agreements. If Air Group were unable to obtain a waiver of, or otherwise mitigate the increase in the restriction of cash, it could have a material impact on the Company's operations, business or financial condition.

In December 2024, the Board of Directors authorized a $1 billion share repurchase program. Under this program, the Company repurchased 1.8 million shares for $107 million during the three months ended March 31, 2025. As of March 31, 2025, the program has $893 million remaining.

As taxpayer protection required under the Payroll Support Program (PSP) under the CARES Act, the Company granted the U.S. government a total of 1,455,437 warrants to purchase ALK common stock in 2020 and 2021. An additional 427,080 warrants were issued in conjunction with a draw on the CARES Act Loan in 2020. The value of the warrants was estimated using a Black-Scholes option pricing model and was recorded in stockholders' equity at issuance. These warrants are non-voting, freely transferable, may be settled as net shares or in cash at the Company's option, and have a five-year term. In 2024, the warrants were sold at auction to a third party investor. The sale had no impact to the amount held on the Company's balance sheet.

In the first quarter of 2025, 1,660,705 of the warrants were exercised, with an exercise price of $31.61 for 1,355,206 warrants and $52.25 for 305,499 warrants, in a net share settlement for 809,768 shares of ALK common stock. As of March 31, 2025, there were 221,812 warrants outstanding, at an exercise price of $66.39.

Basic loss per share and diluted loss per share are calculated by dividing net loss by the weighted average number of common shares outstanding during the period.

A roll forward of the amounts included in accumulated other comprehensive loss is shown below for the three months ended March 31, 2025 and 2024: