Alaska Air Group reports first quarter 2026 results

Alaska Air Group reports first quarter 2026 results Led the industry in on-time performance in the first quarter

Extended Bank of America partnership, delivering improved economics and capabilities for our Atmos™ Rewards program

Premium revenue increased 8% year-over-year and over 90% of premium fleet retrofits completed ahead of peak summer travel season

SEATTLE, April 20, 2026 /PRNewswire/ -- Alaska Air Group (NYSE: ALK) today reported financial results for the first quarter ending March 31, 2026.

"Even in a volatile quarter, we're seeing clear evidence that our long-term Alaska Accelerate plan is working," said CEO Ben Minicucci. "We're leading the industry in on-time performance, achieving a significant integration milestone with a single reservation system, generating incredible loyalty growth with Atmos Rewards and driving strong international demand as we launch service to Europe. I'm confident in our people, our plan, and our future."

Quarter in Review:

Air Group reported first quarter Generally Accepted Accounting Principles (GAAP) pretax margin of (9.6)% and GAAP net loss of $193 million, or $1.69 per share. Our first quarter adjusted pretax margin was (8.6)% and our adjusted net loss was $192 million, or $1.68 per share.

Q1 2026 Results

Prior Expectation

Actual Results

Capacity (ASMs) % change versus 2025

Up ~2%

Up 1.7%

RASM % change versus 2025

n/a

Up 3.5%

CASMex % change versus 2025

n/a

Up 6.3%

Adjusted loss per share

($2.00) to ($1.50)

$(1.68)

Air Group began the year with solid operating momentum, though first quarter 2026 results were impacted by sharply higher fuel prices and localized demand disruptions as a result of historic rainstorms in Hawaiʻi and civil unrest in Puerto Vallarta ahead of the peak spring break travel season. These markets represent approximately 30% of Air Group capacity. Despite these headwinds, demand remained resilient and the company continued to execute against integration priorities and Alaska Accelerate initiatives.

First quarter revenue totaled approximately $3.3 billion, with unit revenue up 3.5% year-over-year despite a nearly 1 point headwind from Hawaiʻi and Puerto Vallarta. Premium demand continued to outperform as fleet retrofits and Starlink installations progressed. Managed corporate travel increased 19% year-over-year, supported by an expanding global network. Our international long-haul expansion continues to perform strongly with Seattle-Tokyo reaching profitability less than one year after launch and load factors exceeding 90% on both Seattle-Tokyo and Seattle-Seoul routes.

Atmos Rewards membership and co‑brand credit card remuneration both grew double digits year-over-year, with particularly strong momentum in Hawaiʻi. Further, our new long‑term extension and expansion of our co‑brand partnership with Bank of America improves economics and will drive incremental growth in cash remuneration for Air Group in 2026 and beyond.

Unit costs increased 6.3% year-over-year, in-line with expectations, reflecting the final quarter of normalization for Alaska's 2025 flight attendant contract, as well as temporary impacts from weather-related disruptions. The quarter also delivered progress in core cost performance, including improvements in aircraft utilization, productivity, and maintenance execution, while returning to industry-leading operational reliability.

First quarter fuel costs increased materially due to elevated crude and refining prices, averaging $2.98 for the period. Excluding higher fuel costs and the one‑time disruptions in Hawaiʻi and Puerto Vallarta, results would have exceeded the midpoint of original first quarter expectations.

Second Quarter Forecast Information:

For full year 2026, our visibility to earnings is limited due primarily to ongoing fuel price volatility. Until conditions stabilize and we have better sight to earnings beyond the current quarter, we have suspended full-year guidance. Similarly, for the second quarter, the range of potential financial outcomes remains wide and difficult to predict, as recent geopolitical factors have resulted in sharp and unpredictable changes in fuel prices. As a result, we're providing detailed assumptions on unit revenue and unit costs, in lieu of our traditional EPS guidance range.

Second quarter capacity is expected to be up approximately 1% year-over-year, down nearly a point from original expectations, reflecting proactive trimming of capacity in May and June. Second quarter unit revenues are trending to be up high single digits year-over-year, with a path to increasing 10% year-over-year, assuming demand strength and yield trends sustain the rest of the period. This expectation is despite a 2-point unit revenue headwind from storms in Hawai'i that have impacted near term demand.

Second quarter year-over-year unit cost performance is expected to be approximately 1.5 points higher than the first quarter, driven by close‑in capacity reductions and several transitory factors. These include crew training costs associated with the ramp‑up of international widebody flying, a year‑over‑year headwind from aircraft sale gains in the second quarter of 2025, and current year planned employee recognition expense tied to achieving a single passenger service system - an important integration milestone. Unit costs are expected to inflect downward in the second half of the year to low single‑digit growth.

Fuel remains the largest source of near‑term uncertainty. April fuel is expected to be approximately $4.75 per gallon, and we expect the quarter to average approximately $4.50 based on the forward curve today. This assumption adds approximately $600 million of expense to the second quarter, equivalent to an earnings per share headwind of $3.60. We expect to consume approximately 297 million gallons of fuel in the quarter based on our current capacity plan.

Our assumed tax rate is 32%, though this could change dependent on the full year outlook as we exit the quarter. Any tax accrual changes are not expected to have cash flow impacts, as we do not expect to incur cash taxes in the near term. Taken together, the revenue, cost, and fuel assumptions result in an adjusted loss per share estimate of approximately ($1.00). Absent the fuel price spike, we would have guided to a solidly profitable quarter.

Despite the challenging near‑term backdrop, Air Group continues to operate from a position of strength, supported by a healthy balance sheet, strong liquidity, approximately $20 billion in unencumbered assets, and disciplined capital allocation. Our continued focus on Alaska Accelerate initiatives to build scale, relevance and loyalty position us well to build a higher‑quality, more durable revenue mix, while maintaining focus on cost discipline and operational excellence.

Financial Results:

Operational Updates:

Commercial Updates:

Other Highlights:

A conference call regarding the first quarter results will be streamed online at 11:30 a.m. EDT/ 8:30 a.m. PDT on April 21, 2026. It can be accessed at www.alaskaair.com/investors. For those unable to listen to the live broadcast, a replay will be available after the conclusion of the call.

References in this update to "Air Group," "Company," "we," "us," and "our" refer to Alaska Air Group, Inc. and its subsidiaries, unless otherwise specified.

This news release may contain forward-looking statements subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. These statements relate to future events and involve known and unknown risks and uncertainties that may cause actual outcomes to be materially different from those indicated by our forward-looking statements, assumptions or beliefs. For a discussion of risks and uncertainties that may cause our forward-looking statements to differ materially, see Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2025. Some of these risks include competition, labor costs, relations and availability, general economic conditions, increases in operating costs including fuel, uncertainties regarding the ability to successfully integrate operations following the acquisition of Hawaiian Holdings, Inc. and the ability to realize anticipated cost savings, synergies, or growth from the acquisition, inability to meet cost reduction and other strategic goals, seasonal fluctuations in demand and financial results, supply chain risks, events that negatively impact aviation safety and security, cybersecurity risks, and changes in laws and regulations that impact our business. All of the forward-looking statements are qualified in their entirety by reference to the risk factors discussed in our most recent Form 10-K and in our subsequent SEC filings. We operate in a continually changing business environment, and new risk factors emerge from time to time. Management cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on our business or events described in any forward-looking statements. We expressly disclaim any obligation to publicly update or revise any forward-looking statements made today to conform them to actual results. Over time, our actual results, performance or achievements may differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, assumptions or beliefs and such differences might be significant and materially adverse.

Alaska Airlines, Hawaiian Airlines and Horizon Air are subsidiaries of Alaska Air Group, and McGee Air Services is a subsidiary of Alaska Airlines. We are a global airline with hubs in Seattle, Honolulu, Portland, Anchorage, Los Angeles, San Diego and San Francisco. We deliver remarkable care as we fly our guests to more than 140 destinations throughout North America, Latin America, Asia and the Pacific. We'll serve Europe beginning in spring 2026. Guests can book travel at alaskaair.com and hawaiianairlines.com. Alaska is a member of the oneworld alliance, with Hawaiian scheduled to join oneworld in spring 2026. With oneworld and our additional global partners, guests can earn and redeem points for travel to over 1,000 worldwide destinations with Atmos Rewards. Learn more about what's happening at Alaska and Hawaiian at news.alaskaair.com. Alaska Air Group is traded on the New York Stock Exchange (NYSE) as "ALK."

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

Alaska Air Group, Inc.

Three Months Ended March 31,

(in millions, except per share amounts)

2026

2025

Change

Operating Revenue

Passenger revenue

$ 2,920

$ 2,808

4 %

Loyalty program other revenue

227

207

10 %

Cargo and other revenue

153

122

25 %

Total Operating Revenue

3,300

3,137

5 %

Operating Expenses

Wages and benefits

1,242

1,127

10 %

Variable incentive pay

(52) %

Aircraft fuel

796

681

17 %

Aircraft maintenance

216

220

(2) %

Aircraft rent

(2) %

Landing fees and other rentals

291

242

20 %

Contracted services

151

145

4 %

Selling expenses

100

(1) %

Depreciation and amortization

204

194

5 %

Food and beverage service

12 %

Third-party regional carrier expense

(13) %

Other

303

261

16 %

Special items - operating

(62) %

Total Operating Expenses

3,579

3,334

7 %

Operating Loss

(279)

(197)

(42) %

Non-operating Income (Expense)

Interest income

(27) %

Interest expense

(76)

(66)

15 %

Interest capitalized

(17) %

Other - net

(8)

213 %

Total Non-operating Expense

(38)

(36)

6 %

Loss Before Income Tax

(317)

(233)

Income tax benefit

(124)

(67)

Net Loss

$ (193)

$ (166)

Basic Loss Per Share

$ (1.69)

$ (1.35)

Diluted Loss Per Share

$ (1.69)

$ (1.35)

Weighted Average Shares Outstanding used for computation:

Basic

114.294

123.134

Diluted

114.294

123.134

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

Alaska Air Group, Inc.

(in millions, except share amounts)

March 31,

2026

December

31, 2025

ASSETS

Cash and cash equivalents

$ 451

$ 627

Restricted cash

Marketable securities

1,317

1,496

Receivables - net

630

565

Inventories and supplies - net

232

203

Prepaid expenses

281

278

Other current assets

Total Current Assets

3,017

3,266

Property and equipment - net of accumulated depreciation and amortization of $5,080 and $4,945

12,015

11,857

Operating lease assets

1,300

1,268

Goodwill

2,723

Intangible assets - net of accumulated amortization of $88 and $74

801

815

Other noncurrent assets

442

432

Total Noncurrent Assets

17,281

17,095

Total Assets

$ 20,298

$ 20,361

LIABILITIES AND SHAREHOLDERS' EQUITY

Accounts payable

$ 409

$ 324

Accrued wages, vacation and payroll taxes

657

881

Air traffic liability

2,378

1,689

Other accrued liabilities

1,121

1,055

Deferred revenue

1,781

1,722

Current portion of long-term debt and finance leases

498

721

Current portion of operating lease liabilities

212

197

Total Current Liabilities

7,056

6,589

Long-term debt and finance leases, net of current portion

4,822

4,834

Operating lease liabilities, net of current portion

1,136

1,141

Deferred income taxes

879

1,004

Deferred revenue

1,700

1,711

Obligation for pension and post-retirement medical benefits

360

369

Other liabilities

614

595

Total Noncurrent Liabilities

9,511

9,654

Shareholders' Equity

Preferred stock, $0.01 par value, Authorized: 5,000,000 shares, none issued or outstanding

—

Common stock, $0.01 par value, Authorized: 400,000,000 shares, Issued: 2026 - 145,631,281

shares; 2025 - 145,115,659 shares, Outstanding: 2026 - 111,359,830 shares; 2025 - 115,530,889

Capital in excess of par value

973

961

Treasury stock (common), at cost: 2026 - 34,271,451 shares; 2025 - 29,584,770 shares

(1,904)

(1,701)

Accumulated other comprehensive loss

(176)

(173)

Retained earnings

4,837

5,030

Total Shareholders' Equity

3,731

4,118

Total Liabilities and Shareholders' Equity

$ 20,298

$ 20,361

SUMMARY CASH FLOW (unaudited)

Alaska Air Group, Inc.

(in millions)

Three Months Ended March 31,

2026

2025

Cash Flows from Operating Activities:

Net Loss

$ (193)

$ (166)

Adjustments to reconcile net loss to net cash provided by operating activities

229

266

Changes in working capital

385

359

Net cash provided by operating activities

421

459

Cash Flows from Investing Activities:

Property and equipment additions

(338)

(238)

Other investing activities

169

(143)

Net cash used in investing activities

(169)

(381)

Cash Flows from Financing Activities:

(428)

(236)

Net decrease in cash and cash equivalents

(176)

(158)

Cash, cash equivalents, and restricted cash at beginning of period

684

1,257

Cash, cash equivalents, and restricted cash at end of the period

$ 508

$ 1,099

Reconciliation of cash, cash equivalents, and restricted cash:

Cash and cash equivalents

$ 451

$ 1,044

Restricted cash

Restricted cash included in Other noncurrent assets

Total cash, cash equivalents, and restricted cash at end of the period

$ 508

$ 1,099

OPERATING STATISTICS (unaudited)

A manual recalculation of certain figures using rounded amounts may not agree directly to the actual figures presented in the

table below.

Three Months Ended March 31,

2026

2025

Change

Consolidated Operating Statistics: (a)

Revenue passengers (000)

13,332

13,159

1.3 %

RPMs (000,000) "traffic"

17,300

17,257

0.2 %

ASMs (000,000) "capacity"

21,570

21,219

1.7 %

Load factor

80.2 %

81.3 %

(1.1) pts

Yield

16.88¢

16.28¢

3.7 %

PRASM

13.54¢

13.24¢

2.3 %

RASM

15.30¢

14.79¢

3.5 %

CASMex (b)

12.37¢

11.64¢

6.3 %

Fuel cost per gallon (c)

$2.98

$2.61

14.2 %

Fuel gallons (000,000) (c)

267

262

1.9 %

ASMs per gallon

80.7

80.9

(0.2) %

Departures (000)

125.5

123.8

1.4 %

Average full-time equivalent employees (FTEs)

31,465

29,773

5.7 %

Operating fleet (d)

413

399

14 a/c

(a)

Except for FTEs, data includes activity under a capacity purchase agreement with a third-party regional carrier.

(b)

See a reconciliation of this non-GAAP measure and Note A for a discussion of the importance of this measure to investors in the accompanying pages.

(c)

Excludes operations under the Air Transportation Services Agreement (ATSA) with Amazon.

(d)

Includes owned and leased aircraft as well as aircraft operated under a capacity purchase agreement with a third-party regional carrier.

GAAP TO NON-GAAP RECONCILIATIONS (unaudited)

Alaska Air Group, Inc.

We are providing reconciliations of reported non-GAAP financial measures to their most directly comparable financial measures reported on a GAAP basis. Amounts in the tables below are rounded to the nearest million. As a result, a manual recalculation of certain figures using these rounded amounts may not agree directly to the amounts presented. These reconciliations include adjustments intended to improve comparability and provide a clearer view of the Company's core operating performance.

Losses (gains) on foreign debt and other primarily reflect unrealized and realized gains or losses resulting from changes in foreign currency exchange rates on certain debt. In 2025, these expenses also included mark-to-market fuel hedge adjustments.

Special items - operating primarily relate to costs associated with the integration of Hawaiian Airlines, including employee-related costs, technology costs, and other merger-related expenses. In 2025, these expenses also included costs related to changes in Alaska flight attendants' sick leave benefits pursuant to a collective bargaining agreement ratified in that year.

Pretax Income (Loss), Net Income (Loss), and Earnings (Loss) per Share, adjusted

Three Months Ended March 31, 2026

(in millions, except per share amounts)

Loss Before

Income Tax

Net Loss

Per Share

GAAP

$ (317)

$ (124)

$ (193)

$ (1.69)

Adjusted for:

Gains on foreign debt and other

(3)

Special items - operating

Total adjustments

$ 32

$ 31

$ 1

$ 0.01

Adjusted

$ (285)

$ (93)

$ (192)

$ (1.68)

GAAP pretax margin

(9.6) %

Adjusted pretax margin

(8.6) %

Three Months Ended March 31, 2025

(in millions, except per share amounts)

Loss Before

Income Tax

Net Loss

Per Share

GAAP

$ (233)

$ (67)

$ (166)

$ (1.35)

Adjusted for:

Losses on foreign debt and other

Special items - operating

Total adjustments

$ 93

$ 22

$ 71

$ 0.58

Adjusted

$ (140)

$ (45)

$ (95)

$ (0.77)

GAAP pretax margin

(7.4) %

Adjusted pretax margin

(4.5) %

CASMex Reconciliation

Three Months Ended March 31,

(in millions, except unit metrics)

2026

2025

Total operating expenses

$ 3,579

$ 3,334

Less the following components:

Aircraft fuel

796

681

Freighter costs

Performance-based pay

Special items - operating

Adjusted operating expenses

$ 2,667

$ 2,469

ASMs

21,570

21,219

CASMex

12.37¢

11.64¢

Adjusted Capital Expenditures Reconciliation

Three Months Ended March 31,

(in millions)

2026

2025

Aircraft and aircraft purchase deposits

$ 249

$ 142

Other flight equipment

Other property and equipment

Capital expenditures

338

238

Adjusted for:

Property and equipment acquired through the issuance of debt

—

Proceeds from sales of aircraft and other equipment

(3)

Adjusted capital expenditures

$ 335

$ 258

Debt-to-capitalization, including leases

(in millions)

March 31, 2026

December 31, 2025

Long-term debt and finance leases, net of current portion

$ 4,822

$ 4,834

Operating lease liabilities, net of current portion

1,136

1,141

Adjusted debt, net of current portion

5,958

5,975

Shareholders' equity

3,731

4,118

Total Invested Capital

$ 9,689

$ 10,093

Debt-to-capitalization ratio, including leases

61 %

59 %

Adjusted net debt to earnings before interest, taxes, depreciation, amortization, fixed portion of operating lease expense,

and special items

(in millions)

March 31, 2026

December 31, 2025

Long-term debt and finance leases

$ 5,320

$ 5,555

Operating lease liabilities

1,348

1,338

Adjusted debt

6,668

6,893

Less: Total unrestricted cash and marketable securities

1,768

2,123

Adjusted net debt

$ 4,900

$ 4,770

(in millions)

Twelve Months Ended

March 31, 2026

Twelve Months Ended

December 31, 2025

Operating Income (a)

$ 221

$ 303

Adjusted for:

Special items - operating

194

250

Gains on foreign debt and other

(8)

(3)

Depreciation and amortization

805

795

Fixed portion of operating lease expense

278

279

EBITDAR

$ 1,490

$ 1,624

Adjusted net debt to EBITDAR

3.3x

2.9x

(a)

Operating income can be reconciled using the trailing twelve month operating income as filed quarterly with the SEC.

Note A: Pursuant to Regulation G, we provide reconciliations of reported non-GAAP financial measures to the most directly comparable GAAP financial measures. We believe these non-GAAP measures provide meaningful supplemental information to investors for the following reasons:

GLOSSARY OF TERMS

Adjusted debt - long-term debt, plus operating and finance lease liabilities

Adjusted net debt - long-term debt, plus operating and finance lease liabilities, less unrestricted cash and marketable securities

Adjusted net debt to EBITDAR - represents adjusted net debt divided by EBITDAR (trailing twelve months earnings before interest, taxes, depreciation, amortization, fixed portion of operating leases, and special items)

ASMs - available seat miles, or "capacity"; represents total seats available across the fleet multiplied by the number of miles flown

CASMex - operating costs excluding fuel, freighter costs, Performance-Based Pay (PBP), and special items per ASM, or "unit cost"

Debt-to-capitalization ratio - represents adjusted debt, net of current portion, divided by total equity plus adjusted debt, net of current portion

Diluted Earnings per Share - represents earnings per share (EPS) using fully diluted shares outstanding

Diluted Shares - represents the total number of shares that would be outstanding if all possible sources of conversion, such as stock options, were exercised

Freighter Costs - operating expenses directly attributable to the operation of B737 freighter aircraft and A330-300 freighter aircraft exclusively performing cargo missions

Load Factor - RPMs as a percentage of ASMs; represents the number of available seats that were filled with revenue passengers

PRASM - passenger revenue per ASM, or "passenger unit revenue"

RASM - operating revenue per ASMs, or "unit revenue"; operating revenue includes all passenger revenue, freight & mail, loyalty program revenue, and other ancillary revenue; represents the average total revenue for flying one seat one mile

RPMs - revenue passenger miles, or "traffic"; represents the number of seats that were filled with revenue passengers; one passenger traveling one mile is one RPM

Yield - passenger revenue per RPM; represents the average passenger revenue for flying one passenger one mile

SOURCE Alaska Air Group