Alaska Air Group (ALK) investor relations material

Strategy and financial outlook

• Strategy shifts from cost leadership to commercial leadership, differentiated revenue and loyalty while retaining a relative cost advantage; the roadmap moves from integration to growth activation and value harvesting.

• Roughly two-thirds of the $1B Accelerate incremental-profit target is captured; full delivery is expected in 2027, with new initiatives adding 2–3 margin points beyond the plan.

• Long-term targets: 11%–13% pre-tax margins, more than $10 EPS, double-digit ROIC and net leverage near 1.5x; the $10-plus EPS potential assumes $2.50/gal fuel.

• Diversified revenue targets exceed 60% by 2030, with premium revenue above 40%, loyalty cash near $4B and cargo revenue near $750M; annual capacity growth is ~4%.

• Capital priorities include balance-sheet repair and over 60% free-cash-flow conversion at $10 EPS; fuel remains the largest near-term headwind, with West Coast supply diversification a medium-term margin opportunity.

Network and international growth

• Seattle international service spans seven destinations, with 10 planned by 2028 and 15 by 2030; long-haul flying is targeted to reach 15% of capacity, and Seattle aims to become the leading international carrier.

• Seattle growth levers include larger aircraft, added frequency, 16 daily Paine Field departures next summer, optimized hub flows and intercontinental expansion; the plan targets at least 8 points of incremental Seattle metro local share by 2030.

• Plans include applications to join Oneworld’s transatlantic and Pacific joint businesses and renewal and enhancement of the American Airlines agreement; Virgin-era code-share restrictions are expected to end in summer 2027.

• Portland domestic seats grew ~30% since H1 2023, flow traffic increased fivefold and local share rose five points; H1 2026 margin was one point above system.

• San Diego plans target over five points of share growth by 2030 through larger aircraft, premium investment, oneworld reach and loyalty; the market has ~120 daily departures to 50 destinations.

Premium experience

• Premium revenue is targeted to exceed 40% by 2030, up from 38% in 2026; narrowbody First and Premium Class retrofits add 1.3M premium seats annually.

• At least 25 MAX 10 aircraft are planned in a four-cabin layout with at least 45% premium seats, including 12 lie-flat suites; Premium Reserve is planned for transcontinental service.

• Aurora and Leihōkū lie-flat suites will equip all 787s and A330s; Premium Reserve completes the long-haul four-cabin offering.

• Seattle lounge space is planned to exceed 73,000 sq ft across five lounges by 2030, including a new 41,000 sq ft lounge with ~14,000 sq ft for international travelers.

• Guest investments include premium lounges, dedicated check-in and refreshed onboard experiences across the West Coast.