Alaska Airlines expects to expand capacity by up to 10% in 2023 on the back of "robust" demand for travel during the Thanksgiving holiday and throughout much of the fourth quarter of 2022. In an investor update, Alaska said that it expects Christmas holiday demand to be "in line" with the earlier weeks of the quarter, helping it toward what it said could among the best pre-tax margins in the industry for 2022”.
Alaska expects its adjusted full year 2022 pre-tax margin to be more than 7-9% of 2019 levels. The airline said it expects to further expand those margins in 2023 if orders for new aircraft continue to run on schedule since it is upgauging to larger Boeing MAX aircraft.
Given the timing of aircraft deliveries and transition training constraints in early 2023, Alaska notes that it expects to reach pre-pandemic capacity levels later in the first quarter of next year.
The new aircraft will also assist in reducing costs by as much as 3% compared to 2022, Alaska predicts. For the fourth quarter and the full year 2022, Alaska expects costs (excluding fuel) to rise by 20-23% compared to 2019, with fuel costs per gallon up by as much as $3.70.