Alaska Air Group (ALK) Q4 2023 earnings summary

Executive summary

• Record FY23 operating revenue of $10.426B and adjusted pretax margin of 7.5%; adjusted net income was $583M, or $4.53 per diluted share.

• Agreed to acquire Hawaiian Airlines for $18 per share in cash; the proposed combination would retain both brands and expand Pacific network reach.

Financial highlights

• Q4 revenue was $2.553B, up 3% YoY; GAAP net loss was $2M, or $0.02 per diluted share, versus $22M net income in Q4 2022.

• Q4 adjusted net income, excluding special items and mark-to-market fuel hedge adjustments, was $38M, or $0.30 per diluted share, versus $118M and $0.92 YoY.

• FY23 revenue was $10.426B, up 8% YoY; GAAP net income was $235M, or $1.83 per diluted share, versus $58M and $0.45 in FY22.

• FY23 adjusted net income was $583M, or $4.53 per diluted share, versus $556M and $4.35 in FY22; reported operating income was $394M.

• Operating cash flow reached $1.05B for FY23; recognized $1.6B in bank card partner commissions, up 13% YoY.

Outlook and guidance

• 2024 routes announced include Seattle–Toronto, Anchorage–New York JFK, Anchorage–San Diego and Portland–Nashville.

• Final inspections were being prepared for all 737-9 MAX aircraft, with each aircraft to return to service after inspection and resolution of any findings.

• A second 737-800 freighter was expected for delivery in Q1 2024.