Alaska Air Group reports fourth quarter and full year 2025 results

Alaska Air Group's (Air Group) Consolidated Statements of Operations, Consolidated Balance Sheets, and Summary Cash Flow Statement include Hawaiian Airlines from September 18, 2024 onward. For comparability of financial and operational results, historical information has also been provided on a pro forma basis for the full year 2024 within the Supplementary Pro Forma Comparative Financial and Operating Information in this filing and in prior 8-K filings. The results presented for the fourth quarter of 2024 in the supplementary section are as reported given the inclusion of Hawaiian Airlines in Air Group for the full quarter.

Air Group reported fourth quarter GAAP pretax margin of 0.8% and net income per share of $0.18. Our fourth quarter adjusted pretax margin was 1.8% and our adjusted earnings per share was $0.43.

We continued to build on key milestones for our Alaska Accelerate strategy during the quarter, including achieving a single operating certificate for Alaska and Hawaiian Airlines. We achieved record credit card acquisitions, with nearly one fourth of all signups being for the new premium credit card that we introduced late in the third quarter. We began selling our new international routes from Seattle to London and Rome during the quarter, with the first flights scheduled to operate in spring 2026. We are also now selling in six foreign currencies and recently unveiled our Japanese, Korean, and Italian-language based websites, helping drive point of sale outside of the United States to support our expanding international service. These achievements represent continued progress in building the infrastructure to support Air Group's future growth and profitability, and deliver on our Alaska Accelerate goal of $10 earnings per share in 2027 enabled by $1 billion in incremental profit.

Fourth quarter revenue was $3.6 billion, resulting in a 0.6% year-over-year RASM increase despite contending with temporary demand pullback from the government shutdown in November. We believe our fourth quarter unit revenue result will be among the highest in the industry. Corporate travel grew 9% year-over-year, while close-in demand remained strong throughout the fourth quarter as bookings and yields continue to rebound from the challenging environment earlier in the year. Our diverse revenue streams continued to deliver with premium revenue increasing 7% year-over-year, cargo revenue increasing 22% year-over-year, and loyalty revenue increasing 12% year-over-year. Commercial initiatives and synergy capture remained on track for the fourth consecutive quarter.

Unit costs, excluding fuel, freighter costs, and special items increased 1.3% year-over-year. This result is better than prior guidance and signals our teams' renewed focus on cost control. Economic fuel price per gallon was $2.57 per gallon in the fourth quarter, reflecting elevated West Coast refining prices during the quarter.