Alaska Air Group (ALK) Q2 2024 earnings summary

Executive summary

• Achieved record Q2 2024 revenue of $2.9 billion, with premium and non-main cabin segments contributing significantly.

• Adjusted pretax margin reached 15.8%, leading the industry among domestic-focused peers.

• Reported Q2 GAAP net income of $220 million; adjusted net income of $327 million, excluding special items.

• Secured a tentative agreement with flight attendants for a ~32% compensation increase, pending ratification.

• Maintained operational excellence with a 99.5%+ completion rate each month in Q2.

Financial highlights

• Q2 revenue up 2% year-over-year on 6% capacity growth; unit revenues down 3.7% due to fleet grounding.

• Adjusted EPS for Q2 was $2.55; fuel price per gallon was $2.84, down from Q1.

• Total liquidity at quarter end was $2.5–$3.1 billion; debt repayments of $50 million in Q2.

• Share repurchases totaled $28 million in Q2, $49 million year-to-date.

• Unit costs down 1.9% year-over-year, outperforming expectations.

Outlook and guidance

• Full-year EPS midpoint lowered to $3.50–$4.50, reflecting new labor contract and domestic environment.

• Q3 capacity expected to rise 2–3% year-over-year; Q4 capacity growth to be lower than Q3.

• Q3 EPS guidance set at $1.40 to $1.60; economic fuel cost per gallon expected between $2.85 and $2.95.

• Full-year capacity growth now expected to be less than 2.5% due to aircraft delivery delays.

• 2025 capacity growth likely to remain below mid-single digit targets due to aircraft delivery delays.