Alaska Air Tops Q4 Earnings, Forecasts Smaller Loss in Q1
Alaska Air Group exceeded Wall Street expectations for fourth-quarter profit and anticipates a narrower loss in the current quarter due to robust holiday and business travel demand, coupled with enhanced pricing authority.
Reduced domestic seat capacity has bolstered airfares, benefiting U.S. airlines. Alaska, having acquired Hawaiian in September, attributes its increased revenue during the holiday season to sustained leisure demand, a boost in corporate travel, and favorable weather conditions.
"Overall revenue trends continued to perform exceptionally well across our entire network," stated CFO Shane Tackett.
Despite a projected adjusted loss of 50 to 70 cents per share in Q1, marginally below analysts' estimate of 72 cents, Tackett emphasized Alaska's historical trend of profitability for the remainder of the year.
The Hawaiian network is forecast to incur losses in the March quarter but generate modest profits for the year.
Alaska maintains its target of exceeding $5.75 in earnings per share by 2025.
The acquisition of Hawaiian Airlines for $1.9 billion and the surge in premium travel demand have prompted Alaska Air to pursue additional revenue of $1 billion by 2027.
Alaska Air is expanding premium seating on flights and introducing a premium credit card as part of its loyalty program revamp.
"We expect significant further growth potential," Tackett added.
In Q4, the Seattle-based carrier recorded an adjusted profit of 97 cents per share against analysts' forecast of 44 cents. Total operating revenue climbed 38% to $3.53 billion, surpassing the estimated $3.43 billion.