ALK Q1 2025 Earnings

Call Details

• Call Title: Alaska Air Group, Inc. Q1 2025 Earnings Call
• Date: April 24, 2025 at 3:00 PM UTC
• Management Team:
  • Ryan St. John (Vice President of Finance, Planning, and Investor Relations)
  • Ben Minicucci (Chief Executive Officer)
  • Andrew Harrison (Chief Commercial Officer)
  • Shane Tackett (Chief Financial Officer)

Call Summary

Financial Performance

• Air Group reported a GAAP net loss of $166 million for Q1 2025.
• Excluding special items and mark-to-market fuel hedge adjustments, Air Group reported an adjusted net loss of $95 million for Q1 2025.
• Total revenues were $3.1 billion in Q1, which was up 9% year over year on capacity growth of 3.9%.
• Adjusted loss per share was $0.77 in Q1, which was $0.07 below guide, representing approximately $10 million of variance versus guide.
• Cargo revenue increased 36% year over year and Air Group took delivery of two additional Amazon A330 freighters for a total of eight freighters.
• Combined Q1 results showed a seven-point year‑over‑year margin improvement, including a double-digit margin improvement from the Hawaiian assets.
• Loyalty and co-brand economics contributed $550 million of cash remuneration in Q1, which was up 12% year over year, and new cards rose 26% year over year.
• Balance sheet metrics at quarter end included $3.3 billion of total liquidity, scheduled debt repayments of $155 million in Q1, debt-to-cap of 58%, and net leverage of 2.1x.

Guidance

• The company did not update full-year guidance and explicitly paused on providing a full-year update.
• Air Group expects second quarter EPS of $1.15 to $1.65 and attributes approximately a six-point revenue impact to the current demand backdrop for Q2.
• System unit revenues are expected to be flat to down low single digits in Q2.
• Second quarter capacity is expected to be up approximately 2% to 3%, with that growth driven entirely by Hawaiian Airlines assets and Alaska assets expected to be flat in Q2.
• Second quarter unit costs are expected to be up mid to high single digits, with the company reiterating that the second quarter will be the most pressured quarter this year.
• The company stated a five-point deterioration of revenue for the first half and said that if that deterioration continued for the remainder of the year they would still expect to be solidly profitable.
• No update was provided to full-year unit cost or full-year EPS targets at the call, and the company reaffirmed prior capacity guidance of approximately 2% to 3% for the full year.