Alaska Air Group has posted strong fourth quarter and full year 2024 results on January 22, 2025.
The company swung to a net profit of $71 million, or earnings per share (EPS) of 56 cents, in the fourth quarter 2024 from a net loss of $2 million, or loss per share of two cents, in the fourth quarter of 2023. Full year profits increased from $235 million, EPS of $1.84, in 2023 to $395 million, EPS of $3.13, in 2024.
The company said stronger revenue performance as well as improving non-fuel costs, as well as a reduction in fuel prices. Additionally, the results include Hawaiian Airlines’ performance – newly acquired by Alaska in September 2024.
On the back of the strong results, the company authorised a new $1bn share repurchase plan, which is to be executed over the next four years. Repurchases begin this month. Alaska had repurchased 3.9 million shares for around $250 million in the fourth quarter of 2024, bringing the total for the year to 5.5 million shares for $312 million.
The company’s operating revenue for the quarter totalled $3.5bn, up 38% over fourth quarter 2023 and climbed 13% in the full year to $11.7bn.
During the quarter, Alaska’s cargo and other revenue more than doubled to $132 million, while its loyalty programme revenue increased 36% to $224 million. Passenger revenue rose 37% to $3.2bn in the period.
For the full year, passenger revenues climbed 12% to $10.7bn, while loyalty programme revenues climbed 13% to $733 million for the year. Cargo and other revenue rose 38% for the full year to $348 million.
Fourth quarter capacity was up 2.5% on the same period last year, beating its prior expectations. Revenue per available seat mile (RASM) was up 7%, in line with expectations, and cost per available seat mile (CASM) excluding fuel was up 8.6%, with prior expectations set at up low-double digits.
Operating revenue growth outpaced operating expenses growth, which climbed 37% in the fourth quarter to $3.5bn. Aircraft maintenance expenses totalled $229 million in the fourth quarter, up 89% from fourth quarter 2023. Wages and benefits in the quarter were up 43% in the quarter to $1.1bn. The company reached an agreement in concept with Alaska flight attendants for an updated collective bargaining agreement in January this year. Wage and benefit expenses increased 18% in the full year to $3.6bn.
The company recorded a $40 million benefit in fleet transition associated with the retirement and disposition of Airbus acquire from Virgin America and Q400 aircraft in the fourth quarter, and an $11 million expense for the full year. Additionally, the company recorded $43 million in costs related to retroactive pay in the fourth quarter and $73 million for the full year for Alaska flight attendants pursuant to the agreement in concept reached in January 2025.
Furthermore, the company reported $80 million in costs for the quarter and $208 million for the full year related to integration costs associated with the acquisition of Hawaiian Airlines. These costs primarily consisted of legal and professional fees, change in control payments, and other employee-related expenses.
Fuel expenses in the quarter were down a marginal 1% to $702 million and down 5% for the full year to $2.5bn. Aircraft rent for the year was flat at $207 million. As of the end of the year, the company’s operating fleet size totalled 392 aircraft, up from 314 aircraft at the end of 2023.
The company paid $325 million in the full year 2024 towards Alaska Airlines and Horizon Air employees, representing around six weeks of pay. The incentive rewards staff for achieving profitability, safety, sustainability, and operational targets. The company’s CEO Ben Minicucci said: “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.”
Operating income more than doubled in the fourth quarter to $73 million, up from $32 million a year prior. For 2024, operating income increased 45% to $570 million.
The company expects its capacity to be up 2-3% in full year 2025, as well as an adjusted earnings per share for the year above $5.75.
“Our success this year and our optimistic look ahead is built upon a proven strategy that puts the guest at the centre of everything we do and unlocks new opportunities across our business,” said Alaska chief commercial officer Andrew Harrison. “We’re poised to capitalise on the strength of a combined global network, a powerful loyalty programme, two beloved brands, and a remarkable travel experience.”
For the first quarter of 2025, the company expects capacity to be up 2.5-3.5% and expects a loss per share of around 50 to 70 cents. RASM is expected to be up high-single digits in the quarter, as well as CASM excluding fuel to be up low- to mid-single digits.
As of the end of the year, assets totalled $19.8bn, while total liabilities and shareholders’ equity equally totalled $19.8bn. Alaska held $1.3bn in cash, cash equivalents, and restricted cash at the end of the year.
Adjusted net debt totalled $3.9bn at the end of the year. The company’s net debt to EBITDAR totalled 2.4x.