Alaska Air(US:ALK)2026-01-22 22:15Financial Performance - Reported earnings per share of $0.18 for Q4 2025, with adjusted earnings per share of $0.43, exceeding expectations[5] - Generated $1.2 billion in operating cash flow for the full year 2025[2] - Fourth quarter revenue reached $3.6 billion, with a 0.6% year-over-year increase in RASM[8] - Achieved a consolidated adjusted pretax margin of 2.8% for the full year 2025[16] - Guidance for FY 2026 expects adjusted earnings per share between $3.50 and $6.50, with capital expenditures projected at approximately $1.4 to $1.5 billion[12] - Total operating revenue for Q4 2025 was $3,632 million, a 3% increase from $3,534 million in Q4 2024, while total operating revenue for the full year 2025 reached $14,239 million, up 21% from $11,735 million in 2024[25] - Passenger revenue increased by 2% to $3,248 million in Q4 2025 compared to $3,178 million in Q4 2024, and for the full year, it rose by 20% to $12,835 million from $10,654 million[25] - Net income for Q4 2025 was $21 million, down from $71 million in Q4 2024, while full-year net income decreased to $100 million from $395 million[25] - Basic earnings per share for Q4 2025 was $0.18, compared to $0.56 in Q4 2024, and for the full year, it was $0.85, down from $3.13[25] Revenue and Expenses - Operating expenses for Q4 2025 were $3,557 million, a 3% increase from $3,461 million in Q4 2024, with full-year operating expenses rising 25% to $13,936 million from $11,165 million[25] - Total operating expenses increased to $3,557 million in Q4 2025 from $3,461 million in Q4 2024, and for the year rose to $13,936 million from $11,165 million[43] - Fuel expenses for the twelve months ended December 31, 2025, were $2,879 million, compared to $2,506 million in 2024, representing a 14.9% increase[51] - Total operating expenses for the full year 2025 were $13,936 million, a 3% increase from $13,469 million in 2024[55] Cash Flow and Assets - Cash and cash equivalents decreased to $627 million in Q4 2025 from $1,201 million in Q4 2024, with total current assets declining to $3,266 million from $3,760 million[26] - Total assets increased to $20,361 million in 2025 from $19,768 million in 2024, driven by growth in property and equipment[26][27] - The company reported a net cash provided by operating activities of $1,249 million for the full year 2025, with a cash outflow from investing activities of $1,623 million[29] Operational Metrics - Revenue passengers increased by 0.1% to 14,355,000 in Q4 2025, while total revenue passengers for the year rose by 19.1% to 58,627,000[38] - RPMs (Revenue Passenger Miles) decreased by 0.7% to 18,935 million in Q4 2025, but increased by 20.7% to 77,110 million for the full year[38] - Load factor declined by 2.3 percentage points to 81.5% in Q4 2025, and by 1.0 percentage point to 82.9% for the year[38] - Average full-time equivalent employees (FTEs) increased by 7.5% to 32,676 in Q4 2025, and by 22.7% to 31,585 for the year[38] Integration and Fleet Expansion - Alaska and Hawaiian Airlines achieved a single operating certificate, marking a significant integration milestone[16] - Announced the largest fleet order in Alaska's history, including 105 737-10 aircraft and 5 787 aircraft, expanding the fleet to 475 aircraft by 2030[16] - The operating fleet expanded by 21 aircraft to 413 as of December 31, 2025, compared to 392 a year earlier[38] Cost and Debt Metrics - Debt-to-capitalization ratio, including leases, increased to 61% as of December 31, 2025, up from 58% a year earlier[45] - Adjusted net debt to EBITDAR ratio was 3.0x for the twelve months ended December 31, 2025, compared to 2.4x for the same period in 2024[47] Other Revenue and Loyalty Program - Alaska Air Group's loyalty program generated $238 million in other revenue in Q4 2025, compared to $224 million in Q4 2024, a 6.3% increase[49] - The company reported a 19% increase in cargo and other revenue for the full year 2025, totaling $549 million compared to $460 million in 2024[55] Non-GAAP Financial Measures - The company emphasized the importance of non-GAAP financial measures for better visibility into operational results, particularly in a highly competitive industry with significant fixed costs[56]