Alaska Air(US:ALK)2025-10-23 22:23Financial Performance - Alaska Air Group reported third quarter 2025 record revenue of $3.8 billion, resulting in a 1.4% year-over-year increase in RASM[7]. - The company achieved a GAAP net income of $73 million, or $0.62 per share, compared to $236 million, or $1.84 per share, in Q3 2024[13]. - Adjusted earnings per share for Q3 2025 were $1.05, exceeding the prior expectation of $1.00 to $1.40[6]. - Total operating revenue rose by 23% to $3,766 million for the three months ended September 30, 2025, from $3,072 million in 2024[27]. - Passenger revenue increased by 21% to $3,424 million for the three months ended September 30, 2025, compared to $2,821 million in 2024[27]. - Operating expenses increased by 32% to $3,618 million for the three months ended September 30, 2025, compared to $2,731 million in 2024[27]. - Net income decreased by 69% to $73 million for the three months ended September 30, 2025, down from $236 million in 2024[27]. - Basic earnings per share fell to $0.63 for the three months ended September 30, 2025, compared to $1.87 in 2024[27]. - For the nine months ended September 30, 2025, total operating revenue was $10,607 million, an increase of 30.5% from $8,201 million in the same period of 2024[50]. - Passenger revenue for the nine months ended September 30, 2025, reached $9,587 million, up 28.2% from $7,476 million in the prior year[50]. Capacity and Operations - Capacity (ASMs) decreased by approximately 0.7% compared to pro forma 2024, while CASMex increased by approximately 8.6% year-over-year[6]. - Revenue passengers increased by 20.0% to 15,879,000 in Q3 2025 compared to Q3 2024[39]. - RPMs (revenue passenger miles) rose by 22.2% to 20,739 million in Q3 2025, while ASMs (available seat miles) increased by 23.2% to 24,447 million[39]. - Average full-time equivalent employees increased by 30.6% to 32,590 in Q3 2025 compared to Q3 2024[39]. - The operating fleet expanded by 12 aircraft to 406 as of September 30, 2025[39]. Future Outlook - The company anticipates fourth quarter earnings per share of at least $0.40, with full year adjusted earnings per share expected to be at least $2.40[9]. - Alaska Air Group announced two new global nonstop routes from Seattle to London and Reykjavik starting May 2026, expanding its international reach[2]. Cash and Assets - The company held $2.3 billion in unrestricted cash and marketable securities as of September 30, 2025[13]. - Total current assets decreased to $3,466 million as of September 30, 2025, from $3,760 million at December 31, 2024[28]. - The company reported a total of $20,012 million in assets as of September 30, 2025, compared to $19,768 million at December 31, 2024[30]. Debt and Liabilities - Total liabilities increased to $15,983 million as of September 30, 2025, compared to $15,396 million at December 31, 2024[29]. - Debt-to-capitalization ratio, including leases, increased to 60% as of September 30, 2025, from 58% at the end of 2024[46]. - Adjusted net debt to EBITDAR ratio was 2.6x for the twelve months ended September 30, 2025, compared to 2.4x for the twelve months ended December 31, 2024[47]. Expenses and Costs - Economic fuel cost per gallon decreased by 3.8% to $2.51 in Q3 2025, while fuel gallons consumed increased by 26.3% to 303 million[39]. - Integration costs related to the acquisition of Hawaiian Airlines amounted to $61 million for the three months ended September 30, 2025[37]. - Operating expenses, excluding fuel, for the Air Group in Q3 2025 were $2,793 million, an increase of 37.5% from $2,033 million in Q3 2024[49]. - Non-operating income for Alaska Air Group in Q3 2025 was a loss of $39 million, compared to a loss of $12 million in Q3 2024[49]. Special Items and Adjustments - The Air Group adjusted column reflects financial information reviewed by management, excluding certain charges, indicating a focus on operational performance[51]. - Special items impacted adjusted income, with a total of $64 million for the three months and $211 million for the nine months, reflecting a decrease of 19% and 20% respectively[53].