Alaska Air 1Q 2025 Earnings Report

Introduction to Alaska Airlines’ Earnings Report

An Alaska Airlines Boeing 737 MAX 9 plane sits at a gate at Seattle-Tacoma International Airport on Jan. 6, 2024.
Alaska Airlines on Wednesday warned that softer travel demand will eat into earnings in the second quarter, the latest in a chorus of carriers seeing weaker-than-expected bookings.

Current State of Bookings and Revenue

Alaska said bookings have stabilized but forecast a six-percentage-point headwind due to "softer demand." The carrier, which merged with Hawaiian Airlines last year, said it expects second-quarter unit revenue to be flat to down as much as 6% over a year ago and anticipates adjusted earnings per share of $1.15 to $1.65, lower than the $2.47 a share Wall Street analysts had forecast.

Earnings Forecast and Guidance

The airline said it wouldn’t update its full-year guidance, citing "economic uncertainty and volatility," but said it still expects to be profitable even if revenue is under pressure in the second half of the year. Alaska’s unit revenue rose 5% in the first quarter from last year, better than larger rivals’ domestic unit sales. Chief Financial Officer Shane Tackett said customers are still booking trips but at lower-than-expected fares.

Performance in the First Quarter

"The fares aren’t as strong as they were in the fourth quarter of last year and coming into January and first part of February," he said in an interview Wednesday. "Demand is still quite high for the industry, it’s just not at the peak that we all anticipated might continue coming out of last year."
"Alaska is built for times like these with our relentless focus on safety, care and performance," CEO Ben Minicucci said in an earnings release. "Amid the economic uncertainty, our teams controlled what they can control and delivered results that strengthen our foundation for the long term."

First Quarter Financial Results

Here is how Alaska performed in the first quarter compared with Wall Street expectations:

• Loss per share: 77 cents adjusted vs. an expected loss of 75 cents
• Revenue: $3.14 billion vs. $3.17 billion expected
  In the first quarter, Alaska posted a net loss of $166 million, down from a loss of $132 million a year ago, and revenue of more than $3.1 billion, which was up 41% from a year ago and shy of analysts’ forecasts.

Adjusted Loss Per Share

Adjusting for one-time items, Alaska reported a loss of 77 cents per share for the three months that ended March 31, below analysts’ estimates.

Conclusion

Alaska Airlines’ earnings report highlights the challenges the airline industry is facing due to softer travel demand. Despite the challenges, Alaska remains focused on its core values of safety, care, and performance, and expects to remain profitable in the long term.

FAQs

Q: What is the expected impact of softer travel demand on Alaska Airlines’ earnings?
A: Alaska Airlines expects softer travel demand to eat into earnings in the second quarter, with a forecast of a six-percentage-point headwind due to softer demand.
Q: What is Alaska Airlines’ forecast for second-quarter unit revenue?
A: Alaska Airlines expects second-quarter unit revenue to be flat to down as much as 6% over a year ago.
Q: What is the airline’s forecast for adjusted earnings per share?
A: Alaska Airlines anticipates adjusted earnings per share of $1.15 to $1.65, lower than the $2.47 a share Wall Street analysts had forecast.
Q: Will Alaska Airlines update its full-year guidance?
A: No, the airline said it wouldn’t update its full-year guidance, citing "economic uncertainty and volatility."