ALK - Earnings call transcript Q4 2024

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Operator

Good morning, ladies and gentlemen, and welcome to the Alaska Air Group 2024 Fourth Quarter Earnings Call. [Operator Instructions]. Today's call is being recorded and will be accessible for future playback at alaskaair.com. After our speakers' remarks, we will conduct a question-and-answer session for analysts. I would now like to turn the call over to Alaska Air Group's Vice President of Finance, Planning and Investor Relations, Ryan St. John.

Ryan St. John

several good quarter you we at XXXX earnings along and for joining issued investor.alaskaair.com. operator, our release fourth detailing our earnings with you, morning. are for Thank us our results, Thank which slides available accompanying call. Yesterday,

Air Several on the On call, morning, the respectively. GAAP and call. answer questions during Shane. line portion quarter hear our of management This Ben, Andrew updates $XX to reported today's of from team Q&A full the income will net million, and million you fourth others Group are also your $XXX and year of

special Excluding million mark-to-market $XXX and Air adjustments, $XXX million. Group hedge reported items net of and adjusted income fuel

inclusive acquisition since closing Our discussion will September comments on today include Hawaiian results of the of the of reported XX. Group Airlines Air

and The guidance were full pro to forma and prior combined as compared periods company year are Hawaiian if for the Alaska a fourth results quarter referenced. forward-looking

future materially found within reminder, filings. factors our be forward-looking can Lastly, Information actual business that could may risk from performance statements our as on results. our affect a about differ SEC

fuel. will provided as non-GAAP We to financial excluding non-GAAP such usual, adjusted today's earnings comparable in refer measures you, earnings the costs, unit we to certain as have most between Ben. a and and reconciliation measures directly also And GAAP Over release.

Benito Minicucci

everyone. morning, and good Thanks, Ryan,

share the stronger strong that strong care Day. momentum, This left connecting results. focused picking and safety, a the right we weeks by since. ago, travel through momentum at where excited clear out to has experiences is vision shared With path growing our forward, our strategic plan X world, to grown rooted Investor Accelerate driving Just Day, and and and guests Alaska scale, Investor we off plan, on up performance. our our we We're loyalty relevance only with in remarkable during a year closed

cap and of in pretax we for bringing X our we would shares for to margin we authorized launched year of delivered the over in it $XXX repurchases off $XXX January, reported and newly adjusted to $X.XX, been industry. had repurchase underscore our In will business. aggressively our repurchased an MAX the full and the continue billion during adjusted To We existing confidence fourth XXXX, $X.XX, year, $X legacy repurchases margin program and both exceeding in X.X% full EPS posted best X-week year million have million grounding share fully year the exhausting December Air Group guidance. program. our the quarter, the not For full a leverage to our

diving I we further year to our to had reflect take the into want update, on in business pivotal moment XXXX. a Before

were another was strong extend a deliver operations performance financial heartfelt Group's Their apart. Just care and service commitment us severely safety ago, this for. us Air Alaska X/X and XXXX, our following loomed. employees and year. employees to Alaska announce in due to will Horizon sets to bonus outstanding thank excited our to their all dedication commitment that for you year. payout receive legacy helping excellence, I'm record challenge we're a and year rose fleet Group teams I of a Air grounded, Yet and trusted the operation our known safe an to to unwavering to reliable restored the want disrupted to uncertainty Flight with

X equivalent of largest weeks We the This to the we industry. highest believe distribute is history, in our over to $XXX the in the pay. expect million, payout and

and to important, we is culture our hope in our employees and people Hawaiian have plan in our participate this in Investing XXXX.

of was defining Airlines this month, our foundational acquisition valuable strategic most joint in flight beginning look year in top hub, leading Group service. position U.S. couldn't on that Hawaiian aircraft process a assets, of unions collective company's strategy the proud Air was and all brand, history. we piece transformation several operational Concept legacy customer attendants closing earlier including in significant in of This with of addition, Airlines our exciting reliability that The this be a which with a the with reached key bargaining and a wide-body forward narrow-body we most our Agreement In exceptional companies an and XX a in strengthens happier we we incredibly and embarked Alaska an mix September. year. and to XXXX

our is start. our the great vision improving. geared now in for The Accelerate, core XXXX, our towards trends business work delivering are on underlying off and to a Moving future to Alaska it's

track Our legacy prices. rise positive quarter are despite first the in assets profits recent on in fuel slightly Alaska to a deliver the

expectations outperformed improve recent progress the the made QX to QX years. network similar we we changes And we with to performance assets take in be to second expect quarter. as quarter the small them Hawaiian while on, and Our a in the from X fourth pretax anticipate Alaska synergies last time, aim materialize. unprofitable over Over profit effect

confidently our our are maximizing model strengths, centered on elevating building strategy future business We and company, on across our business. our proven approach unlocking our shaping opportunities company our a our competitive enhancing larger new as of the and edge through

the will our on the Andrew power leveraging network, First, of share we're combined benefits seeing. more we're already which

data build from Seattle, planned. launch relevance our us across Tokyo and Portland as to Seattle beyond. banking helping our early and and loyalty first is is our and while the West effect gateway Coast international our strategy hubs taking route Hub Seattle of international strengthening progressing in is This Our

both brand networks, become for both powerful of combined choice airline Hawaii. Second, a and the to as flights domestic Hawaii's in and international trusted strength capitalizing Hawaiian the airline, loyalty program oneworld, we're of on

than guest needs, through expanding focused growing of every travel our our including cargo results margin at diversifying all business, dilution has ability only and products premium $X.XX deliver industry of we're more combination lastly, my strengthened. environment, business to plan Hawaiian. EPS our our on experiences Combined and no Third, journey, XXXX. with includes meeting and a our and Alaska and our in the This in the constructive target of phase including confidence our

the $X single in combination pretax is the incremental transition the years next thereafter. a initiatives unlock at planned, over profit a we're operating unified XXXX, set least progressing goal reservation and Integration of achieving through synergies. by certificate billion a as to by of followed of commercial end but Additionally, million $XXX X the shortly of system to

this just at we beginning. our As Day, shared is Investor the

position people, track serve bold the on depends to steps. our we Our shareholders. delivering leaders and communities we're our as by everyone driven the to guests, along who the and clear potential value take future courage way, and industry strategies record reaffirm our us, our And

I'll to that, with it And turn Andrew. over

Andrew Harrison

Thanks, good and Ben, morning, everyone.

trends the With Hawaiian, of where fourth discussion quarter, and my including headed focus quarter during the are we first for the strength first core I'll business quarter. the our full on

our encouraging we a Our next share seeing and with business in the delivering $XXX profit is of initiatives in commercial results excited network, transforming, is along out the what are combination strategy that through years. million X to on we the laid initial and synergies I'm last month, over

of revenues operational Alaska Hawaiian revenues X%, strong with an points demand, areas up as fourth up growth corporate and represents quarter, unit included up billion factors the December, up QX driven on codeshare. drove in networks in revenue, X.X%. QX. approximately performance, during from unit limited to nearly of by the of load and and year-over-year strength we close-in year-over-year record X XX% and capacity XX% revenues improving North Hawaii, expectations, with higher a fully X/X This from particular, continuing connected $X.X X% capacity grow of we a In saw networks. connected without America trend combination exceeded sequential having our Regionally, that's our which strength achieved and

demand, Neighbor unit better revenues Islands showed improved alignment, double supply America Latin marked up with while and and Alaska on digits. improvement

demand We continue premium our to also see strong cabins. for

respectively, revenues was load and First points were XX% quarter, XX% with X%. for and up year-over-year, Premium X% Paid on up first-class X Class factor up capacity. the yields XX%

by main For expect in cabin and X%. full will of total Exceptional increases product products continue premium premium to XXXX. revenues revenue with the unit increased XX%, our outperform performance, year, we that cabin

modifications a ready busy to have fly schedule. quick to our and we're summer seat on XXXER and on MAX-X, update date, the As for been the to XX Class done XX track have expansion the during aircraft Premium and completed

cash Our with generated in we've in exciting several to with that exceptionally along $X.X promotions our from loyalty create for billion XXXX announcements, and continue remuneration results choice strong programs' value fourth made quarter more guests.

different targets geographies and Our launching announced to of us expand new mid-December our initial had our and summer of strength. outside credit across geographies our demand giving demographics, confidence has loyalty trajectory our premium footprint current achieve and in strong this card

also Alaska are X state with after launching helping in with finally, XX state benefits continues the Huaka'i program In by we've XXX,XXX traction. X% program drive up Club year-over-year. up fourth in gain of and program, Hawaiian, in year-over-year our members And up all successful spend since months for modeled really December managed XX%, business overall corporate registered revenues the acquisitions year strength of has travel card XX% and our shown corporate loyalty residents quarter close. revenues accelerating Hawaii spiked to over since this new the Hawaii card

As in XX%, these and led the sector we've up professional services seen increases, quarters, prior XX% and respectively. technology

the were our up revenues XX%. full year, managed corporate For

demand. international but we from as greater month, several us opportunity largest service wide-body last servicing see this to come Seattle Narita accounts, from Tokyo with international begin from for even to of launch this business to are travel. eager the And our continue We will upside of our we an discussed first May,

Now turning to our outlook.

and continued as the With demand into backdrop, a we're we head healthy corporate industry by XXXX. demand travel constructive leisure strength, encouraged setup

X.X% up quarter, up capacity to X.X%. We approximately is be first expect to while be in the industry expected stable, capacity to X.X% approximately our

are with unit support held expect managed booking to we XX%, bookings to close-in be In advanced the business single digits. first revenue Our up continuing up up revenues high quarter, shaping strength. well,

Neighbor positive yields trends January loads increases year-over-year America legacy in assets to holding unit solid year-over-year and like Alaska revenue for are in And are and fourth and Our January the North Hawaii quarter, February. February. Islands and building

been as Hawaii remains has namely international although line see starting in is International, improvements it modest our to our changes synergy to time, with travel it and we're some capture. network for expectations, given challenged

recovery Island Alaska the XXXX do over to while begin starting material in international to more years, significant plan and network flying, the our next with the assume our for improvement business. in targets April, already we're any network this Alaska unveiled changes Accelerate recall, network you'll combined earnest providing The strategy foundation revenue for Neighbor unlocks our Hawaii not As and few in combined provide materialize. our Hawaiian upside either or any see

our selling networks Alaska carrier both bookings the our and flights are power operating of double-digit Hawaii combined hub highlighting to benefits across The in through the both legacy Codesharing network during the connectivity banking beginning for of and Hawaiian percentages of materialize. began represented Alaska December and month, strategy also platforms.

bank in point a just of in and Portland a are and Seattle local via early schedule nearly few passengers connecting with traffic. our results minimal schedule began our guests. displacement ago Our February January, in early up We of connecting XX% our bank weeks Seattle doubling loaded to

our core long-haul Initial demand first but of our with in Tokyo, Seattle is bookings traffic importantly, strong Seattle shows to beyond Narita from the traffic, Rocky flow on east route of Mountains approximately local coming XX% core. XX%

our a efficient Investor great And loyalty know for out of we've itineraries lastly, become choice international As demonstrating XX% booked deep laid service. we our the for at that have from geographies. across more support travelers members and our members, mid-continent product, with Day demand traffic we our and a comes top

small Seattle continue strategy key our and of building meet flying our a our to demand a in total and our is international of Although beyond. X% element relatively relevance revenue, guests

on of are extent I 'XX the an reiterating in done is strong. that commercial want have to our close never to We're by before. capitalizing we Air looking engine Group we momentum building out

forward, As we to continue our corporate look strengthen. managed revenues

Our premium cabins continue perform. to

our banking Our showing returns, already realized. positive hub from the being and synergies is network are

X next of million to $XXX plan part the incremental Accelerate including outlined over in in achieving are the we on We to as our well unlock years, profit Alaska $XXX synergies. million the way

to And with Shane. pass it that, over I'll

Shane Tackett

everyone. and morning, Thanks, good Andrew,

to future As you posted impact the the a strength Air we year model. fourth on And with quarter the result the legacy strength future. are stages a industry's December, our know, of our we and way vision, tough creating $XXX of that of strong, we the us a grounding dealt chance on business our building and results grounding, had successful finished are to focused And the company, margin. people Alaska we the our Investor are results while while started closed of to absent at toward to pretax early resilience Group. negatively the in start our in where we the with XXXX the and This Day fantastic by speak impacting best the fleet year million, the speaks approximately get adjusted

December both Alaska Hawaiian. closed particularly well and for

margin In fact, Hawaiian profit pretax adjusted month in posted its the and of best December. absolute

now balance as strong on operational our well we sheet building Accelerate strengths, success our longer-term for this and safety We focused required are that fundamental a industry. plan, and is discipline building believe excellence, commercial cost as on pillar strength, Alaska in

loyalty In on our focused network. particular, scale, we be across will relevance and building

that our confident We to ability plan financial action our highly in to are into enable execute deliver our targets. are putting already on initiatives and and will us

to quarter Turning results. fourth

business. attributable guided strength core of directly to midpoint. Our per were EPS adjusted is $X.XX, earnings the our $X.XX above our outperformance the of $X.XX share approximately

We of tax liability year. of and the also renegotiation certain a a our from interest payments benefited for true-up from

full similarly strength an range improving the share of pretax per of the our legacy of model reported X.X%, in business by previously we above margin an trajectory Alaska driven with For earnings adjusted year, continued Hawaiian. which underlying and $X.XX, was guided

credit $XXX inclusive cash Our and be were million for liquidity first are undrawn year-end. approximately to at the Scheduled stood repayments on-hand $XX at in $X.X billion and lines debt expected quarter. of approximately total the million, of quarter

industry the debt those we valuable combined repay funds against of expense interest achieving by amongst raise debt tightest improved from In prepayment October, In capital program the Mileage spreads new renegotiation to QX, compared with markets, $X we similar Plan peers. higher rate billion $X.X billion previously used the the interest and have raised borrowing payments, Hawaiian. acquired and our issued business. in to of debt Together activity profile the of our

$XX end cap to million XX% we to about year, quarter. our our stood at To the In expect at net debt-to-EBITDA XXXX, with be nonoperating expense debt per X.Xx.

expect target than month, we we to return in long-term X.Xx As to our XXXX. last outlined leverage of less

discussed ALK in remarks, remain we business Ben the we're XXXX, $XXX of our next poised his in drive for as As years. over also to few the we million the repurchased in stock outlook and value confident

XXX and more these count dilution to with resulting outstanding we With a reduced levels. offset purchases, on than our now share share shares, par million in XXXX count

which X next repurchase we to We program in have in begun within billion executing fully $X earnest our consume share new intend the January, years.

core be the dependent were business the Our of and higher better time. Fourth ultimate unit slightly that accruals. performance-based despite of pay, the job Hawaiian than the costs Normalizing flow in margin repurchase pace way profile would will up costs Alaska, Horizon over The and the quarter on guidance cash pay costs teams X.X% lower. a end year-over-year, have bonus across coming all points managing great for our unit been did year. X through

impact X-point full Boeing up an grounding the and full year-over-year For unit materially legacy reduced planned year capacity ended drove and year, approximate despite CASMex. to the costs strike Alaska approximately X% that

outlook. our to Turning

few moved to mind granular guidance, for unit in from a keep While there metric are XXXX. specifics we've away

growth from XX, capacity aircraft X, XXX of we will X% XXX this year. and MAX approximately Boeing year X% full assumes Our aircraft to receive

We delivery fleet. expect growth of Alaska and assumed asset given AXXX flat Hawaiian our increase the timing XXX-XXX within our in material aircraft utilization assets and across particularly expect oldest a retirement

up We be year-over-year. X.X% expect X.X% quarter first to to capacity

back attendants. low we agreement for XXXX. our up improves, the ramp be A second to of growth half to reached mid-single as cost we be and on QX, extremely in will new item year unit with the initial with the expect to synergy Alaska year, rate costs half we contract in We notable expect for flight improvement the capture of pending greater productivity low lapped the materially begins digits the

new the it weeks unit be pressure to While January learn deal, would approximately approve the the agreement points beginning cost X.X cost and more will several we X of are the flight attendants assumed be before for if effective year. represent for

on expect however, of This to know, basis. $X.XX expectation year-over-year as per For normal a $X.XX. earnings, represents Alaska, material first seasonality we is, you improvement a quarter our a of share for loss

digits, X.X%. our loss consistent are million Hawaiian in our capacity expected quarter our single first RASM up our today's share ourselves quarter, will we assets to While high I To the note be CASMex the compared Alaska to X legacy mid-single even results, guidance, summarize combined of in with to digits years up and goal X.X% to the be a ago. XXXX. $X.XX by to are first focus increasingly to expected on that QX, up expect set in improve Airlines $X.XX. low per we to call be on to will break commentary $XX And over we to assets

to X%. full EPS still For X% of growth on we year, the to more $X.XX of capacity deliver expect than

billion time. generate We We've flow $X.X more and closed cash we of and also entered felt billion long a expect another CapEx to confidence to with in and $X.X positive have free than strong XXXX momentum this year year.

have the in and years unlocked we a win synergies already including to which from playbook initiatives, industry have profit executing begun We on. to the in significant come,

And that threshold better guests many can on all loyal airlines constructive against with performance to backdrop to airlines of deliver premium focused and experiences this who -- is are returning industry end and more to increasingly margin a end. increasingly

your we on here our where We to have questions. let's future to we're looking that, forward a with And to clear from go, vision want forward. strategy of and delivering go

Operator

first Oglenski Instructions] with from Barclays. today question Brandon [Operator come Our will

Brandon Oglenski

like I right here. everything the it guess, seems Ben, on cylinders is firing

flight Portland pretty Narita and bank out like also the is the structure think this important? a launching well as here, I at sound important. we moving then of Seattle hear reallocation year, but of network at lot look most a you Because As like what pieces Seattle,

better maybe a you that? on for can question sure. Andrew, Or maybe I'm more not elaborate that's So

Benito Minicucci

I'll just and maybe then Well, get start Andrew. I'll

I you're great it's think overall, a right, question. Brandon,

across just We've lot a got have And an team have I company. an going on. the integration outstanding We doing. we're fortunately, that

got our reservation eye we've unified system. executing to keep a this operating a and certificate So on year single

that, through. we've synergies But along all got coming these

more really the I'm networks just the synergies the is from extremely color little flying, between not the company mind missing But on connecting is so us, mentioned, that. that. of step on And all where for that operation keeping come getting International top just Andrew, Andrew a as guardrails. a the focused

Andrew Harrison

Yes.

you as year. very Brandon, our think low I is see growth our guidance, capacity this with

moving aircraft best and in around really possible. them what focused is on our So positioning we're the way

seasonal. with our moving think again, about I deliberate I what rebanking, in last we've this big just that's the that capacity of connects will to performing. think there. what very markets the we launched significant but been seen The what around And part say of I done, replace is in of markets one that to aircraft being new year is December hasn't and thing XX those a goodness January first and quarter and we've all

assets So again, fly fly. purposeful we're trying to today and about the we to how synergies and to use very be where we we that have unlock our

Brandon Oglenski

I definitely seeing quick, great on you and Andrew, significantly mentioned outlook. you in Well, a you're think that it's in up December. that really maybe trends corporate January? elaborate travel here the pretty Can

Andrew Harrison

a of full the fourth managed there corporate passengers as grow. of our other travel yields today, in shorter-haul quarter, held was we XX% in that. think number West managed we higher up And was corporates Yes. And are quarter will areas as what we That's for here. were still The growth up the coming fourth drove a into continue clients corporate the here in in that year the of business is go to revenues back X%, traffic lot we Coast traffic XX%. and about see sit

really right it's good a now. So outlook

Operator

Melius come next question Conor Research. with from And our Cunningham will

Conor Cunningham

that mover sticking Or made it lot. Alaska? a on network of Maybe with to legacy network the Alaska is -- the the needle driving you XX% Is just that's just to situation. there? the really been number that Seattle Hawaiian what's you've are benefiting that? That Like about from banking changes legacy was obviously that is already the connect

Andrew Harrison

a I and remember to load -- significant part. in factors it's And been mean and have got both, think challenge obviously but a you've February. Yes. there's always I our January

reconfigured better to the and plenty So room our there maximize much is getting airplane, of flights that. at just on our team we the connectivity and is

load our In that just fact, today and which do and sitting that, always year. of sitting we're here for we've been factor I'm sort we're there struggled January, excited XX% has goal, this on to above

So it's just really exciting to see.

Benito Minicucci

XXX flights have in XXX to a Andrew, the And up Seattle. day peak we of

there's lot of come connecting. just flights So a

Conor Cunningham

strong going get your look MAX not the we get at of all really but suggests on as a own Okay. to revenue quarter. like situation stuff, from unit myself, in That's here. the little bit But start noise the ahead first and to And you're There's last helpful. some then from that it plans, calendar better year. a would capacity that obviously, actually

you things it's know breaks kind And how be in early, expectations but any could on your general, I So spring trends seeing anything spring would there -- helpful. and give of you're how that maybe are if indications on booking?

Andrew Harrison

is spring team that. window the starting still the to mean, come actively into is I and managing just

So I report have don't exciting there. to anything

together. in continuing the we're our Islands North assets America network improve. I think continued mentioned and we've to synergies prepared and the all bringing Alaska those Neighbor with really Hawaiian remarks, as are to and the on And what is the assets Hawaii focused

we fully into more here to as expect very that strong and really break, have today. our are But sit spring but demand higher good I looking a gets things period,

Operator

to next Research. Group move We'll Wolfe with Scott

Scott Group

the do quarter last Do later ended a -- RASM I really the you month, like you. contributing you're after the March to like high for RASM. strong Wanted period a what captured getting that? single-digit feel strong in bit can then that, How MAX between in like Alaska to it that's like comp Hawaiian? in over you've unpack legacy maybe year this? just with is little issues, right on that again being remember up you seeing feel cargo you really, now tougher And just up follow if the really you've more Maybe like

Andrew Harrison

of of those. the check couple revenue a Scott, are unit that yes, lot through last assets performing just assets a and the Alaska noise on year. just occurred There's Both Hawaiian well a basis.

the had the fires. from impact Maui You rollover

You had Flight XXXX.

We and us And shared always are We network and different combined January in done. that's as past, most have codeshare. improve the didn't network. for to and have you're February opportunity we've seeing the the very and that, being

March and good always think, I spring break, for are us.

think to we're doing. up and set I work far reiterate, we're just the better as through. our what And year have all this we as synergies connectivity and coming goodness of the

So we up. this are shaping how season about very is excited

Scott Group

goes of And it QX? low seems digit the the get in year Does does year the half Okay. a terms I you've get in help us in then Great. in maybe like And QX? deck, maybe that doing CASM lumpiness Maybe CASM think think the in then to like capacity. improve, just the what relative Shane, got to at worse better slide as of of back the on? means looking mid-single to you're

Shane Tackett

yes, Yes. Thanks, going pretty is, simplest Scott. That's way much. the to Well, your answer to question contour. the be

and and our lowest artist because costs. We in last quarter of the have on the second the comp growth in the probably of year, year performance growth rate rate

we'll of the benefit up AXXX those start from able Second on half, utilization capture synergy from of to going see fleet, that productivity the to starting to really be two and real drive things. of we're to get sort benefit the

this good a quarter And I to going with -- costs. quarter so unit we're have think

we're trajectory And for of is exit think to comp year next be a and the rest the well. really I going then, hardest Our going to nice in quarter.

this about how outperform thing So the is year, think we've since do that continually perform I talked excited CASM we throughout to and December RASM we're you we the to about all can year. expect

Operator

Andrew come BofA with Research. Didora Global Our will next question from

Andrew Didora

question capacity long competitive First Day. all of your in been plan But it noticed after of outlining hasn't changes have really any your behavior Andrew. or sort maybe and starting efforts? I know competitive you for re-banking since Investor

Andrew Harrison

carriers But I there. equipment little. on industry the some But continue there weeks the what up as There's we is to other the things X play some seasonal when seeing changes seen and some trued same you would by ago. met say whole, we get edges, and what pretty that, on. have the out were schedules we are around here very further with than

Andrew Didora

but for I'm just ways lifting Okay. of nice sure done to here, Or thank for Shane, a CASM even balance of again, any more all of earlier the Makes opportunities deal. your the close sheet. sense. behind stack clarifying in opportunistic job from just paydown there you are one, since terms big and the just heavy is now kind Then Are debt be the resetting comments you? debt here? on the

Shane Tackett

Yes. Thanks, Andrew.

to I think double-digit a deal major quickly the to the with debt wanted closed that restrike us, like we opportunities we we behind rate and move Emily when are we and acquired Hawaiian knew have done fantastic job.

of out. buying go on a could. I to We've some down itself also business, environment. ownership well continue take will would prevent work that of we as the And if but forward our done got the part nice job the the there side of a continually time there's of from aircraft as we think, rate obviously the us that opportunity watch fleet, Hawaiian to We'll lease nothing sort we've

Andrew Didora

do one Any in. this I Maybe later more you payroll resets, I thoughts sneak potentially on tranche. the with loans as year could on what guess, could first relief that the

Emily Halverson

This Thanks, is Emily. Andrew.

some PSP come use at our we looking So with those out ourselves rate just replace find we it's to possible loans. just also compelling would Starting interest will to here that of do favorable they to debt. rates. those more is planned we as get higher loans, it's in if some finance what XXXX, repayment that debt But we likely are of them opportunities convert that

Operator

Jamie with we'll And Baker hear JPMorgan. from next

Jamie Baker

to I So detract your have from I momentum, I'm question trying a but fair not to ask. at all think

and leases. has downside. understand that hope an anything, asked And you now inside the kicked example to but had Virgin the there were integration to you the of franchise leases. question things economics, of this shortly if out, As me aircraft you one be after the cited surprised you those duration in I I you Virgin may something, has what, lot because off. good a Hawaiian let and And -- recall give really then

disappointed you sort that out has of that can So you? call thing. Anything

Shane Tackett

for Jamie, ownership. you the thank question. not Honestly, certainly aircraft

we I just acquisition. think I I one multiples do we spent diligence is the Virgin And acquired. a difference the fleet on lot due on we while about this of we feel think of that acquisition time good in think spent

So I aren't not us. to expected would surprises, of ahead have say there fewer things

that over a business just how and was how some that they're had coming the pandemic doing wildfires really spots GTF issues. cost of they of in challenges like that from time, the structure moved the of Maui core where the in network the But understanding faced their the weren't and working, were soft of out where they

all I that have think not was. in complete those, say our Jamie, two think companies. I difference seen not yet. appreciate command over don't material have I the expectation that you what a of quite we -- We've maybe noted we that we'd

I there's sort get think maybe we've single and have I so racing think company on people much those of things, And we're quarter, for the which us and to Ben But still positive, culture too. had for a there. to been learn. and

Benito Minicucci

Yes.

this with due our looking because a keep I diligence. for we it's we with like this Shane we You through question, know that Jamie, -- our what, America. before went Virgin -- during didn't we great missed things But said, and Board,

is coming nothing what to at us. were for. So look we experienced There at

just stronger. fact, what In it like opposite. I There's better had -- it's we thought. feels Things the getting than just are say would

better. to our Again, to the produced profit QX. is -- Hawaiian in they're going from be December, QX profitable a QX

-- -- Shane Things said, more few come onion know a and I but like a we lot -- still again layers it's still the we theme. find be same something. be better there's than off So expect of think a that need if to together. you'll to the and first There's to there's are the peeled

Jamie Baker

in And lessons prepared franchise of I Alaska. mentioned appreciate by somewhere your -- some quick applying just All remarks, road thorough getting the profitability, best right. as I down a think you follow-up, the in or to learned the first Hawaiian and said you the response. practices quarter

Can that that the a mind you us your addressed Hawaiian blocks in need first to way? you largest in moving What's are think profit. what get future or building pieces quarter be to remind standing the

Benito Minicucci

available of airplanes years with amount first capacity the for we have going demand on that all putting right to that right we're our that's did over want it's productivity. the markets, staffing, one brand. Hawaiian just is those things a the duplicate we've honed we It's in Just It's of it's Alaska the quarter. the right weaker the that things to in

the on and there. onto And a think be And going just some see I Alaska that of lot a there's learned experience think that of you're side. lot to discipline I opportunity We've network. forced

Operator

Next question come with Catherine Sachs. from Goldman will O'Brien

Catherine O'Brien

the Maybe flight earlier. points guess, from costs is trajectory year XQ unit contracts. two in question on incremental cost attendance, of follow-ups first, the the proposed full I quick just that the X.X the first, outlook? guide Is and

trying guide. the to guiding there, then comps based a inflation CASM quarter talking I worse XQ better a half in could tailwinds that it and the but to, some sounds much just the cost bit maybe worse was a too not better for of the good half be overall second I about. full understand on this second follow-up. understand you're guess quick than get Is the XQ year you're half enough in first how to And second, like second bit got hasn't

time. for thanks So the

Shane Tackett

it we attendant it this once back Thanks, guidance the ratifies it's into represented to which Katie. I so half it at it ratify The contract QX, fully hope year for like our of yes, don't that's in get does. wouldn't incremental and point. want flight Yes, should there, guidance be

grow year. the I I is the to for X% as have past, going think, much X% we thing would in to as say think full I not we're one

And we flat. this I'm those before where start talked at year can utilizations. we they about actually are unit synergies excited ramp trends pretty cost rates, get about more than as to the be the and to we to likely growth

utilization get the and hopeful optimistic guess of a I X productivity getting up. as real good half know is about And having I going is think so or quarter. hardest of we're guide. specifics comp for know, synergies we're strong this back until the in work and I operations QX looking of just terms ramping nice get the year. fully But synergies into and And say into to cost you're and not the we're there our performance have and what getting would I cost together really the we But quarter really fourth more a we performance third year

Catherine O'Brien

Great. don't you And if more, maybe one just mind.

guess, interisland and outlook. in up Hawaiian overall a profit to in for Island I would in flip pretax digits double to to Neighbor see a material you the hope Hawaiian expecting were RASM be fourth quarter noted improvement You've to XQ. your upside

set the I plus. have you ] of performed the in these just set kind to When time [ you understand since think how in trying things targets that XXX December, first it's pandemic.

Shane Tackett

Yes. quarter, because Neighbor there we trend against more an may I'll we be it question. deal saw improving forecast that of looked the was Certainly, No. fourth a Maybe like Island. when in this at

folks, we've we we we Hawaiian, think articulating over of when talked combining what franchise with just at made were December the and around I estimates improving no looked Island as in to down made an and -- potential Neighbor time. we sat

expect certainly that. it do We

to nice fully think and Our think job sign-ups, And the start and and in job commercial already the choice we're I a is the long strategy residents. over I I and have to with be XXX,XXX carrier term. Neighbor initially program. loyalty, that go of Hawaii of which Huaka'i got done fabulous think all Andrew we've a the people or team the Islands the program to intending XX,XXX for in And that drive

to the result we lapped already in as would like first the weren't relative the things folks lapping last some Hawaiian of by think and I Maui second $XXX GTF quarter had business, from online their least that control remind they year the also is XXXX. million wildfires improved had just in their really that grounding the and I remarked thing at in last

an -- in December, thought see. thought in So we to to why we I than on of thought trend. profit which were the which even stronger it December, strong improving month was will really that that better I ultimately did say for business and a we December, it was moved excited I is nice think than demand the

Operator

to comes from question Thomas Fitzgerald next move with Cowen. we'll our And TD

Thomas Fitzgerald

a touching if mind little you wondering would the I'm business for on bit. cargo

company-wide, any updates but Just the flying. and Amazon Investor also specifically Day new since on

Shane Tackett

Jason question. have take We'll that Sure.

Jason Berry

the we Tom. seen the mentioned in Great to to days, XXX hear from of carriers X you. as early lot we It's QX platform. by work then to was brought we the And performance business these X -- freighters that It's a have get the by a you've together the XX network single selling integrated X, really see still really Alaska starts of kind and We time. we'll into generate QX. flow new running full Amazon to the freighters all energy. April, and in to we engine hope as

Thomas Fitzgerald

just performing that, how a markets touching just Okay. as transcon? That's Day, for mind maybe bit really helpful. at big as as don't San curious Andrew, as just And the as a Jason. just I was more then follow-up, focus Investor a intra-California maybe would appreciate California. maybe -- little well I you well know, on Diego

Andrew Harrison

stations LA fires. normal a and Thanks, very on 'XX, very continuing about seen those the a of result Yes. down We've this Diego but intra-California in actually absorbed little had trend. so very and year a rest growth situation as of in bit somewhat it's and and that. we're as with Burbank, of well, the quite -- are The Tom. a San the unfortunate bit fair happy We a LA

for X MAX and have, I been product well. doing think transcon, California the have that the Overall, we especially

again, So impacting Pacific across really we're pleased. again, tides I all and And California. think the are synergies both all here, Northwest these

we business So those again, stronger. move areas to as forward, our get of continue

Operator

Stanley. Morgan will from come question next our And Ravi Shanker with

Ravi Shanker

started. if on the of start? the only and gate some program out booking can know forward bring the that when right does and you especially in you of that will got I you X come loyalty as system, of the But timing gains know innings something guys you'll X? just Or Is the such. you integration know combined that kind

Andrew Harrison

card, These passenger and very loyalty system are track on we're we sort the by this unlock single by are premium credit because there's today, start that. will be where complete those are we the definite and and summer, teams that April. very including clear the single of way, process synergies a and the focused greater to meet hard from on both and launch timetable service of deadlines. by Ravi, dates for the those then We'll October fully a it

Ravi Shanker

lines But probably away follow-up, moving guidance, and of specific -- But the the volatility kind and you that's all-in about price maybe such. you fuel kind giving had this probably good of how and crack as kind I do relationship think than you Understood. And know from your coming is thing. guys and a think most spreads a more through industry fuel with of down that about how between maybe the of jet year? the price course fuel

Shane Tackett

suspended long our been [ because tracking what ] a you hedging for paid the while. you're as into tail -- we sort know, first We buying a something the date. we're it's Look, months out It towards quarter. program, Ravi. Thanks, $XXX ago, has think of future. to That's like XX Yes. I

think That's very, minimal had good. planned this -- we have actual expense, it's obviously recognized benefit which hedging the this something And to very that now. a so nice and ago, is see while I we'll of for year, that

get Gulf different have Hawaiian they Singapore rate relative enjoy you beneficial most you us few probably a guys because about on of a get to prefer fuel, the talk than we structure Coast Coast. to to and more We'll very time cost to or refer would from they their or would West to profile supplied a and does as

that last right nothing up really And few gone days, it's to it's the -- relaxed report. than of like a and days, has bit sort anyhow, now. oil in the stable it exciting in XX I last it's think more So looks

Ravi Shanker

love specific of swing a few into get guide kind Would a of the just... Understood. we things for quarters until

Shane Tackett

it Thanks, on of guides. requested put Ravi. the We'll list

Operator

We'll Pfennigwerth with move to ISI. Duane next Evercore

Duane Pfennigwerth

should you if you're anything to doing be know adding don't to to working. seems the I what be guide

the should when just on of peak are hubs. spools anyway, And that the So watching remind Can us we are the seasons in transition that? that up? as ramp be you Alaska where wide-bodies of we into

Andrew Harrison

What year. announced time this Duane, obviously in the Narita and through will year will right XXXs then May, markets. we so we'll publicly announce end is starting have X And next year. we're Yes, another we out the at October, working further of be the year-round at time, Incheon the Seattle. right X so we have X, of next now, those more -- this and both 'XX, X this growth

XXXX. by As we we're shared markets looking launched on Investor to have XX Day,

Benito Minicucci

Andrew, will to... The be first on markets, Eventually, we'll launch. moving XXXs to be

Andrew Harrison

moving to XXXs full be in we'll year. the Eventually,

Duane Pfennigwerth

going a I there -- Are peaks, markets? peaks, those they're understand -- full I there just is their off guess be year. Are seasonality to to follow-up are there there.

Andrew Harrison

we not although there's started Europe, all I'm haven't mean, see getting traction holiday really yet. some to from to the I some Yes. peaks, of talk in hear this these position a We exact know don't winter of there. seasonality others we in and things. the

again, Narita this, steady is going we learn more good really with and folks we're we're has and Honolulu the Narita bookings to What to these I reallocating bit markets a know do the to economic year round. date. are remind about But little to feel very that would a material specific and us. from -- upside But

Benito Minicucci

some And Duane, will be year round all just and maybe directionally, seasonal. will some be

only We've of think out some need around, based all Seattle, move move us -- see demand. that announced we and keep But year us on to XX fly. you'll that's we I get the full to when see plus it -- depend will -- you'll when some X. we

see So you'll us mix. a do

Duane Pfennigwerth

And for then a follow-up. quick maybe just

cuts. or Where Just on that Hawaiian And the do you think year? on capacity the how the I that side? benefit you guess, here XQ it the Alaska XQ, trends of evolving the and OA you back right now? seeing half more versus competitive bigger on seeing a talking you're see side capacity, I'm do in were Is

Andrew Harrison

been anything And quarter. not like is the unusual. low. that period first seeing extremely or capacity growth is Just in documented abnormal growth I'm think sitting I here, has X.X% industry well Industry only

think fairly in don't April. We're that, some the I networks. I than starting there's our Neighbor in Island anything But stable. relief in So it's think other seeing

Operator

We'll Deutsche Bank. move to our next question from with Linenberg Mike

Michael Linenberg

to to go of results Congrats mean, Portland, brought some and commentary, XX% up I -- you great solid up. that really numbers. connecting doubling outlook. in back in I Yes. on some impressive obviously, I just Andrew, the Seattle, want

which or off it's local base, to a become I lends more connecting XX-XX. we think itself numbers, pretty Portland as more are low look upside connect, to at you carrier. rough Seattle of But today, of XX-XX, a we potential obviously have If versus what

just some could on provide you If that? color

Andrew Harrison

periods the catchment at in have are to Those time ballpark. And a connecting these remind volumes Yes. numbers area. our traffic the of are suppose wider low again, I I whole in should folks plan was

As get airplanes our we our are peak into in breaks summer, very spring full.

to revenue I'm going we're be take. careful managing So that traffic and we being very the about

at the for these been would in us. beneficial not season, see this but to obviously, level connectivity, So rate, hugely it's continue expect of low I

Michael Linenberg

then it And to on year. Helpful. Great. through I influence the how about think question, is have we second, think modeling Okay. some I CASMex ask going hate but just to a

the freighter rate? that Your how cut freighter It fourth can in more run to Are at costs XXXX, $XX be XXX%, up a like $XX looking know are than Like that, get the we year-over-year do your we going think about costs? right in CASMex? so quarter million, quarter. gets good out. a million we to $XX million, What's million was I $XX and XXX%,

Shane Tackett

Mike. Thanks, Yes.

XX freighters quarter, the operating I think X X the full the we Alaska we freighter. of of fleet Amazon fourth had and had

So the that give everybody. specifics, then quarter, add We fourth steady pretty in unless we it we'll And But give to of almost to can we and I it's XX at more more to add if here the in there all XXXX. follow way there's a at think up we're state much sort X go. little bit of units point.

Operator

Our next McKenzie Dan Seaport will with Global. come question from

Daniel McKenzie

to of international Thanks contribution Andrew, for ramp oneworld of revenue just flying. international given X I'm the markets, the perspective year as the that end revenue, maybe of curious couple on international a versus, years. you. from start could number say, you say, new percent And you'd X for of characterize to in what the represent, questions how up

Andrew Harrison

Yes.

that when I I X%. long-haul international, like international is there's think the say about

X So a aircraft adding sort year. we're of

going for So I years, few of the our it's to a capacity. be total next think small percentage

for and utility [ ]. us play can just is think huge I directly for Seattle, of we of lot out offer it that too, world us, a the Alaska and loyalty the metal on

setup to again, we with far have we're We're time. can alliances relationships go, very continuing as our what -- track that strengthen partners. at and looking we to over grow, with As partnerships as very do -- the And these well. the we think they're along happy I

Daniel McKenzie

there's to a can year, second And roll IT wondering believe improve Okay. I'm of is then to to guess, planning would that currently out that -- merchandising, I'm you're at what planning opportunity you're you wondering later not, all. that And some. if first then, so, roll if embedded If an what I look guide. question, this upside the in share out least initiatives I if the like? potentially could to about

Shane Tackett

EPS. Dan. -- is envision the contemplated everything on and we that to execute being -- Yes. guide full look, in for I the Thanks, year able deliver go

sort on still the our better into and optimize to unique integrating what X guide. e-commerce to not embedded than deliver front Certainly, Hawaiian reservation of X have or merchandising do efforts the bringing tomorrow. can practices working of brands in They happy out X get of and big network, how is that. faster on do through be doors really to all the And that side if intend there. the also about, excited just better. we or and try to we'll which put conformity lift excited systems Alaska But managed something and between we're fully are They we've we're those today we all

I I appreciate asking question. you're So -- the think

approach about integration. get and you this distribution our to we merchandising certain And and to more about guys e-commerce. able further talk as I'm be to excited We're the we'll into

Operator

next with Wadewitz to And Tom we'll UBS move Financial.

Thomas Wadewitz

Yes.

the XXXX the big I'm just, wondering guide upside hey, So of didn't there's How in maybe versus good -- why backdrop? bit in you that pretty backdrop light the think more expected. thought than guide. upside industry before. not where than in you But question, favorable, beat even that Is do of XQ high-level XQ, you it a about we a may different by you be you and raise a a not lot chose is but just to pretty industry

Shane Tackett

We And -- confident question. excited think but did acquire Tom. we be December. go a and utilization. for just And certainly Thanks, wasn't got all about and we with you and there's think and we're making make and to of sure last this in deliver that go execute that a just were our I drive I lot money assets now, go outlined But synergies lot a feel a momentum we will on, we right we've productivity on. drive network shift lot around to to

in we're integration much we I'm in forward think Dan, And a going nice like the a year I increase our to financial if this deliver what hopeful we go we have able from a way past. then that confident it provide there, margin, unique is And really to look to. in excited is our everything thought EPS in the of on year. goes the we've of question could the that able from industry certainly, year And to to upside how an we than not like dilution perspective. first others number upside there go better this we're But to to guided to last right, a the a No really, to were performance and to I but haven't do are can been great said be. drive even

Thomas Wadewitz

the was mean, that things. news of kind were of you'd items build there XQ cost say for a in XQ say, but rate, and should like to kind Or say, how there and What kind any continuing revenue just hey, mentioned are were just XQ, you'd the XQ. fair. other Were those on hey, in we That's for that tax temporary Okay. XQ? about idiocratic know the XQ items I lower I the of good we you XQ,

Shane Tackett

business this the for Yes. -- No, $X.XX the or of to is the I significant drove half a core in I $X.XX said guide outperformance, the relative initial $X.XX prepared remarks to think, pretty quarter. look, and which

like trends revenue we the those quarter into those first the think to feel saw fourth and continuing in So we are cost that relative I management, quarter.

nature, of and beat treasury the then were rates. The in up half of side tax non-op business probably more by good work other the the the onetime on team truing

that we at But certainly, think, quarter. do, I to the the ended feel cost feel don't like us was into something to on tailwind lots least the us business beat, but lots core how beginning Again, quarter we the fourth execute we've go feel got up in We onetime certainly that first is with about the it on, good nature. plan, where for we of sets XXXX. like and

Benito Minicucci

quarter. joining, Thanks talk everybody. We'll for you next to

Operator

for does call. conference This Thank conclude attending. today's you

Alaska Air (ALK) 23 Jan 252024 Q4 Earnings call transcript