Alaska Air(ALK)2025-01-22 22:21Revenue and Earnings Performance - Record full year revenue of $11.7 billion in 2024[1] - Fourth quarter adjusted earnings per share of $0.97, exceeding guidance by $0.50 at the midpoint[5] - Full year adjusted pretax margin of 7.1%, among the highest in the industry[2] - Full year 2025 adjusted earnings per share guidance of >$5.75[10] - Total operating revenue increased by 38% to $3.534 billion in Q4 2024 compared to $2.553 billion in Q4 2023[22] - Passenger revenue grew by 37% to $3.178 billion in Q4 2024 from $2.326 billion in Q4 2023[22] - Cargo and other revenue surged by 113% to $132 million in Q4 2024 from $62 million in Q4 2023[22] - Operating income rose by 128% to $73 million in Q4 2024 compared to $32 million in Q4 2023[22] - Net income improved significantly to $71 million in Q4 2024 from a net loss of $2 million in Q4 2023[22] - Passenger revenue for Q4 2024 increased by 9% to $3.178 billion compared to the pro forma $2.928 billion in Q4 2023[57] - Total operating revenue for Q4 2024 grew by 10% to $3.534 billion from the pro forma $3.221 billion in Q4 2023[57] Cash Flow and Financial Position - Generated $1.5 billion in operating cash flow for the full year 2024[12] - Total assets increased to $19.768 billion as of December 31, 2024, up from $14.613 billion as of December 31, 2023[23] - Cash and cash equivalents grew substantially to $1.201 billion as of December 31, 2024, compared to $281 million as of December 31, 2023[23] - Net cash provided by operating activities was $1.464 billion for the full year 2024, with $274 million generated in Q4 2024[26] Share Repurchases and Capital Allocation - Repurchased $250 million in outstanding shares in Q4 2024, totaling $312 million for the year[16] Operational Metrics and Performance - Q4 2024 RASM increased by 7.0% compared to pro forma 2023[5] - Q4 2024 CASMex increased by 8.6% compared to pro forma 2023[5] - Revenue passengers increased by 32% to 14,339,000 in Q4 2024 compared to 10,903,000 in Q4 2023[36] - RPMs (traffic) grew by 35% to 19,068,000,000 in Q4 2024 from 14,153,000,000 in Q4 2023[36] - ASMs (capacity) rose by 33% to 22,744,000,000 in Q4 2024 from 17,077,000,000 in Q4 2023[36] - Load factor improved by 0.9 percentage points to 83.8% in Q4 2024 compared to 82.9% in Q4 2023[36] - Economic fuel cost per gallon decreased by 26% to $2.54 in Q4 2024 from $3.42 in Q4 2023[36] - Adjusted income before income tax increased to $137 million in Q4 2024 from $57 million in Q4 2023[40] - Adjusted pretax margin improved to 3.9% in Q4 2024 from 2.2% in Q4 2023[40] - Revenue passengers increased by 5.8% to 14.339 million in Q4 2024 from 13.559 million in Q4 2023[57] - RPMs (traffic) grew by 3.8% to 19.068 billion in Q4 2024 from 18.374 billion in Q4 2023[57] - ASMs (capacity) increased by 2.5% to 22.744 billion in Q4 2024 from 22.181 billion in Q4 2023[57] - Load factor improved by 1.0 percentage point to 83.8% in Q4 2024 from 82.8% in Q4 2023[57] - Yield increased by 4.7% to 16.67 cents in Q4 2024 from 15.92 cents in Q4 2023[57] - RASM grew by 7.0% to 15.54 cents in Q4 2024 from 14.52 cents in Q4 2023[57] - CASMex increased by 8.6% to 11.57 cents in Q4 2024 from 10.65 cents in Q4 2023[57] - Total operating expenses for Q4 2024 were $3,461 million, compared to $3,312 million in Q4 2023[59] - Aircraft fuel costs decreased to $702 million in Q4 2024 from $919 million in Q4 2023[59] - CASMex (operating costs excluding fuel, freighter costs, and special items per ASM) increased to 11.57¢ in Q4 2024 from 10.65¢ in Q4 2023[59] - ASMs (available seat miles) increased to 22,744 million in Q4 2024 from 22,181 million in Q4 2023[59] - Freighter costs increased to $37 million in Q4 2024 from $15 million in Q4 2023[59] - Special items - operating increased to $91 million in Q4 2024 from $15 million in Q4 2023[59] - Total operating expenses, excluding fuel, freighter costs, and special items, increased to $2,631 million in Q4 2024 from $2,363 million in Q4 2023[59] Strategic Initiatives and Future Plans - Announced plans to add 12 international widebody destinations by 2030[16] - Launched Huaka'i by Hawaiian, offering exclusive travel benefits to HawaiianMiles members[16] Debt and Leverage - Debt-to-capitalization ratio, including leases, increased to 58% in 2024 from 46% in 2023[47] - Adjusted net debt to EBITDAR ratio rose to 2.4x in 2024 from 1.4x in 2023[49] Integration and Transition Costs - Integration costs related to the acquisition of Hawaiian Airlines totaled $80 million in Q4 2024 and $208 million for the full year 2024[33] - Fleet transition costs resulted in a benefit of $40 million in Q4 2024 compared to an expense of $30 million in Q4 2023[33] Key Metrics and Management Focus - CASMex is a key metric used by management and the Air Group Board of Directors to assess cost performance[61] - Adjusted pretax income is a critical metric for the employee incentive plan, covering the majority of Air Group employees[61] - Fuel expense represents a significant percentage of total operating expenses, and fluctuations in fuel prices impact unit revenue in the mid-to-long term[61]