# ALASKA AIR GROUP, INC. (ALK) Informational only - not investment advice. CIK: 0000766421 SIC: 4512 Air Transportation, Scheduled SIC breadcrumb: [Transportation, Communications, Electric, Gas, And Sanitary Services](/division/E/) > [SIC Major Group 45](/major-group/45/) > [SIC 4512 Air Transportation, Scheduled](/industry/4512/) Latest 10-K filed: 2026-02-12 SEC page: https://www.sec.gov/edgar/browse/?CIK=766421 Filing source: https://www.sec.gov/Archives/edgar/data/766421/000076642126000010/alk-20251231.htm ## At a glance FY2025 · period end 2025-12-31 · filed 2026-02-12 · accession 0000766421-26-000010 · source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000766421.json | Metric | Value | FY | Provenance | | --- | ---: | ---: | --- | | Revenue | 14,239,000,000 USD | 2025 | verified | | Net income | 100,000,000 USD | 2025 | verified | | Assets | 20,361,000,000 USD | 2025 | verified | | Free cash flow | 1,033,000,000 USD | 2025 | computed | | Net margin | 0.70% | 2025 | computed | | Operating margin | 2.13% | 2025 | computed | | Revenue YoY | +21.34% | 2025 | computed | | ROE | 2.43% | 2025 | computed | Computed values are grepcent-computed from the verified facts above and may differ from ratios the company itself reports. Free cash flow = operating cash flow − capital expenditures. Net margin = net income ÷ revenue. Operating margin = operating income ÷ revenue. Revenue YoY = FY2025 revenue ÷ FY2024 revenue − 1 (consecutive fiscal years only). ROE = net income ÷ period-end stockholders' equity. Peer groups: [U.S. passenger airlines](/compare/airlines/) · SIC 4512 Air Transportation, Scheduled No market price, no rating, no forecast on this site. Not investment advice. ## Peer comparisons including ALK - U.S. passenger airlines: [peer review](/compare/airlines/) · [market-risk page](/compare/airlines/risk/) ### Peer percentile fingerprint | Ratio | ALK | Peer median | Percentile | N | | --- | ---: | ---: | ---: | ---: | | Net margin | 0.7% | 0.7% | 50 | 9 | | Operating margin | 2.1% | 2.1% | 50 | 9 | | Revenue growth | 21.3% | 2.8% | 100 | 9 | | FCF margin | 7.3% | 2.9% | 88 | 9 | | ROE | 2.4% | 4.0% | 43 | 8 | | ROA | 0.5% | 0.5% | 50 | 9 | | Liabilities / equity | 3.94 | 3.47 | 57 | 8 | | Current ratio | 0.50 | 0.52 | 25 | 9 | Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 4512 Air Transportation, Scheduled, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking. ## Selected Fundamentals | Metric | Value | Unit | FY | Filed | | --- | ---: | --- | ---: | --- | | Revenue | 14239000000 | USD | 2025 | 2026-02-12 | | Net income | 100000000 | USD | 2025 | 2026-02-12 | | Assets | 20361000000 | USD | 2025 | 2026-02-12 | ## Financials Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-12. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000766421.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Revenue | | | | | | | 9,646,000,000 | 10,426,000,000 | 11,735,000,000 | 14,239,000,000 | | Net income | 797,000,000 | 960,000,000 | 437,000,000 | 769,000,000 | -1,324,000,000 | 478,000,000 | 58,000,000 | 235,000,000 | 395,000,000 | 100,000,000 | | Operating income | 1,306,000,000 | 1,208,000,000 | 643,000,000 | 1,063,000,000 | -1,775,000,000 | 685,000,000 | 70,000,000 | 394,000,000 | 570,000,000 | 303,000,000 | | Diluted EPS | 6.41 | 7.75 | 3.52 | 6.19 | -10.72 | 3.77 | 0.45 | 1.83 | 3.08 | 0.83 | | Operating cash flow | 1,386,000,000 | 1,590,000,000 | 1,195,000,000 | 1,722,000,000 | -234,000,000 | 1,030,000,000 | 1,418,000,000 | 1,050,000,000 | 1,464,000,000 | 1,249,000,000 | | Capital expenditures | 53,000,000 | 96,000,000 | 105,000,000 | 178,000,000 | 55,000,000 | 126,000,000 | 208,000,000 | 197,000,000 | 171,000,000 | 216,000,000 | | Share buybacks | 193,000,000 | 75,000,000 | 50,000,000 | 75,000,000 | 31,000,000 | 0.00 | 0.00 | 137,000,000 | 312,000,000 | 570,000,000 | | Assets | 9,962,000,000 | 10,746,000,000 | 10,912,000,000 | 12,993,000,000 | 14,046,000,000 | 13,951,000,000 | 14,186,000,000 | 14,613,000,000 | 19,768,000,000 | 20,361,000,000 | | Stockholders' equity | 2,744,000,000 | 3,460,000,000 | 3,751,000,000 | 4,331,000,000 | 2,988,000,000 | 3,801,000,000 | 3,816,000,000 | 4,113,000,000 | 4,372,000,000 | 4,118,000,000 | | Cash and cash equivalents | 328,000,000 | 194,000,000 | 105,000,000 | 221,000,000 | 1,370,000,000 | 470,000,000 | 338,000,000 | 281,000,000 | 1,201,000,000 | 627,000,000 | | Free cash flow | 1,333,000,000 | 1,494,000,000 | 1,090,000,000 | 1,544,000,000 | -289,000,000 | 904,000,000 | 1,210,000,000 | 853,000,000 | 1,293,000,000 | 1,033,000,000 | ### Ratios ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported. | Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 | | --- | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | ---: | | Net margin | | | | | | | 0.60% | 2.25% | 3.37% | 0.70% | | Operating margin | | | | | | | 0.73% | 3.78% | 4.86% | 2.13% | | Return on equity | 29.05% | 27.75% | 11.65% | 17.76% | -44.31% | 12.58% | 1.52% | 5.71% | 9.03% | 2.43% | | Return on assets | 8.00% | 8.93% | 4.00% | 5.92% | -9.43% | 3.43% | 0.41% | 1.61% | 2.00% | 0.49% | | Liabilities / equity | 2.63 | 2.11 | 1.91 | 2.00 | 3.70 | 2.67 | 2.72 | 2.55 | 3.52 | 3.94 | | Current ratio | 0.81 | 0.80 | 0.61 | 0.64 | 0.93 | 0.98 | 0.68 | 0.61 | 0.61 | 0.50 | ## As-reported value updates 6 tracked differences above grepcent's stated thresholds were found between the earliest XBRL-filed value and the value currently on file for the same fiscal period. Ledger: /company/ALK/revisions/ ## Quarterly Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-08-04. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000766421.json. Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived. | Quarter | End date | Revenue | Net income | Diluted EPS | Method | | --- | --- | ---: | ---: | ---: | --- | | 2022-Q3 | 2022-09-30 | | | 0.31 | reported discrete quarter | | 2023-Q1 | 2023-03-31 | | | -1.11 | reported discrete quarter | | 2023-Q2 | 2023-06-30 | 2,838,000,000 | | 1.86 | reported discrete quarter | | 2023-Q3 | 2023-06-30 | | 240,000,000 | | reported discrete quarter | | 2023-Q3 | 2023-09-30 | 2,839,000,000 | | 1.08 | reported discrete quarter | | 2023-Q4 | 2023-12-31 | | -2,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2024-Q1 | 2024-03-31 | 2,232,000,000 | -132,000,000 | -1.05 | reported discrete quarter | | 2024-Q2 | 2024-03-31 | | -132,000,000 | | reported discrete quarter | | 2024-Q2 | 2024-06-30 | 2,897,000,000 | | 1.71 | reported discrete quarter | | 2024-Q3 | 2024-06-30 | | 220,000,000 | | reported discrete quarter | | 2024-Q3 | 2024-09-30 | 3,072,000,000 | | 1.84 | reported discrete quarter | | 2024-Q4 | 2024-12-31 | 3,534,000,000 | 71,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2025-Q1 | 2025-03-31 | 3,137,000,000 | -166,000,000 | -1.35 | reported discrete quarter | | 2025-Q2 | 2025-03-31 | | -166,000,000 | | reported discrete quarter | | 2025-Q2 | 2025-06-30 | 3,704,000,000 | | 1.42 | reported discrete quarter | | 2025-Q3 | 2025-06-30 | | 172,000,000 | | reported discrete quarter | | 2025-Q3 | 2025-09-30 | 3,766,000,000 | | 0.62 | reported discrete quarter | | 2025-Q4 | 2025-12-31 | 3,632,000,000 | 21,000,000 | | derived Q4 = FY annual - nine-month YTD | | 2026-Q1 | 2026-03-31 | 3,300,000,000 | -193,000,000 | -1.69 | reported discrete quarter | | 2026-Q2 | 2026-03-31 | | -193,000,000 | | reported discrete quarter | | 2026-Q2 | 2026-06-30 | 4,065,000,000 | | -0.68 | reported discrete quarter | ## Filed narrative (10-K & 10-Q) ## Business Verbatim Item 1 Business section from ALK's latest 10-K: [/company/ALK/business/](/company/ALK/business/). ## Risk Factors Verbatim Item 1A Risk Factors from ALK's latest 10-K: [/company/ALK/risk-factors/](/company/ALK/risk-factors/). ## Latest quarter (10-Q) Latest 10-Q source: https://www.sec.gov/Archives/edgar/data/766421/000076642126000041/alk-20260630.htm Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high Filing date: 2026-08-04 Report date: 2026-06-30 ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand our company and the present business environment. MD&A is provided as a supplement to, and should be read in conjunction with, our unaudited condensed consolidated financial statements and the accompanying notes. All statements in the following discussion that are not statements of historical information or descriptions of current accounting policy are forward-looking statements. Please consider our forward-looking statements in light of the risks referred to in this report’s introductory cautionary note and the risks mentioned in Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2025. This overview summarizes the MD&A, which includes the following sections: •Second Quarter Review - highlights from the second quarter of 2026 outlining some of the major events that occurred during the period. •Results of Operations - an in-depth analysis of our financial and operational results for the three and six months ended June 30, 2026. •Liquidity and Capital Resources - an overview of our financial position, analysis of cash flows, and relevant material cash commitments. •GAAP to Non-GAAP Reconciliations - reconciliations of reported non-GAAP financial measures to their most directly comparable financial measures reported on a GAAP basis. Dollar amounts in the MD&A are generally rounded to the nearest million. As a result, a manual recalculation of certain figures using these rounded amounts may not agree directly to our actual figures presented in the tables below. SECOND QUARTER REVIEW We reported a $214 million loss before income tax under GAAP for the second quarter of 2026, compared to a $238 million profit for the second quarter of 2025. Refer below for a more detailed discussion of the items impacting these results. Second quarter results were adversely impacted by elevated fuel prices, which increased 85% year-over-year. However, a portion of the incremental fuel expense was offset by strong underlying demand trends that remained resilient throughout the quarter. Revenue increased 9.7% year-over-year, driven by an 8.6% increase in RASM, continued strength in our premium and loyalty products, managed corporate travel, and network optimization initiatives. CASMex increased 6.5%, reflecting higher labor and operating costs associated with continued growth, the absence of a $25 million gain recognized in the prior-year period from the sale of four B737-900 aircraft, and a one-time employee recognition award related to the successful implementation of a single passenger service system. During the quarter, we achieved a significant integration milestone with the successful implementation of a single passenger service system, while continuing to execute our Alaska Accelerate initiatives. Additionally, we expanded the fleet with the delivery of six B737-8 aircraft at Alaska and two E175 aircraft at Horizon, and launched our first transatlantic routes from Seattle to Rome, London Heathrow, and Reykjavik. Subsequent to quarter-end, Alaska executed leases for four B737-800 freighter aircraft, to support the continued expansion of our cargo business in Alaska and Hawai'i. The aircraft are expected to enter service in the first half of 2027. 19 RESULTS OF OPERATIONS OPERATING STATISTICS Below are operating statistics we use to measure operating performance. We often refer to unit revenue and adjusted unit costs, which are non-GAAP measures. [[GREPCENT_TABLE]] [["","Three Months Ended June 30,","","Six Months Ended June 30,"],["","2026","","2025","","Change","","2026","","2025","","Change"],["Revenue passengers (000)","15,056","","15,234","","(1.2)%","","28,388","","28,393","","\u2014%"],["RPMs (000,000) \"traffic\"","20,011","","20,179","","(0.8)%","","37,311","","37,436","","(0.3)%"],["ASMs (000,000) \"capacity\"","24,306","","24,058","","1.0%","","45,876","","45,277","","1.3%"],["Load factor","82.3%","","83.9%","","(1.6) pts","","81.3%","","82.7%","","(1.4) pts"],["Yield","18.21\u00a2","","16.62\u00a2","","9.6%","","17.59\u00a2","","16.46\u00a2","","6.9%"],["PRASM","14.99\u00a2","","13.94\u00a2","","7.5%","","14.31\u00a2","","13.61\u00a2","","5.1%"],["RASM","16.72\u00a2","","15.39\u00a2","","8.6%","","16.06\u00a2","","15.11\u00a2","","6.3%"],["CASMex","11.40\u00a2","","10.70\u00a2","","6.5%","","11.85\u00a2","","11.14\u00a2","","6.4%"],["Fuel cost per gallon","$4.43","","$2.39","","85.4%","","$3.74","","$2.49","","50.2%"],["Fuel gallons (000,000)","295","","293","","0.7%","","562","","556","","1.1%"],["ASMs per gallon","82.4","","82.0","","0.5%","","81.6","","81.5","","0.1%"],["Departures (000)","139.0","","139.6","","(0.4)%","","264.5","","263.5","","0.4%"],["Average full-time equivalent employees (FTEs)","31,726","","31,299","","1.4%","","31,596","","30,536","","3.5%"],["Operating fleet","422","","409","","13 a/c","","422","","409","","13 a/c"]] [[/GREPCENT_TABLE]] COMPARISON OF THREE MONTHS ENDED JUNE 30, 2026 TO THREE MONTHS ENDED JUNE 30, 2025 OPERATING REVENUE Total operating revenue increased $361 million, or 10%. The changes are summarized in the following table: [[GREPCENT_TABLE]] [["","Three Months Ended June 30,"],["(in millions)","2026","","2025","","% Change"],["Passenger revenue","$","3,644","","","$","3,355","","","9","%"],["Loyalty program other revenue","258","","","210","","","23","%"],["Cargo and other revenue","163","","","139","","","17","%"],["Total Operating Revenue","$","4,065","","","$","3,704","","","10","%"]] [[/GREPCENT_TABLE]] The table below presents total operating revenue by principal geographic region (as defined by the U.S. Department of Transportation) and the percentage of change of certain operational results for the three months ended June 30, 2026. [[GREPCENT_TABLE]] [["","Three Months Ended June 30, 2026","","% Change vs. Prior Year"],["(in millions)","Total Operating Revenue","","Passenger Revenue","","RPMs","","ASMs","","Yield","","RASM"],["Domestic","$","3,704","","","9%","","(1)%","","1%","","10%","","9%"],["Latin America","145","","","(21)%","","(27)%","","(28)%","","9%","","9%"],["Pacific","170","","","7%","","4%","","(2)%","","3%","","16%"],["Atlantic","46","","","n/a","","n/a","","n/a","","n/a","","n/a"],["Total","$","4,065","","","9%","","(1)%","","1%","","10%","","9%"]] [[/GREPCENT_TABLE]] 20 Passenger revenue Passenger revenue increased by $289 million, or 9%, primarily driven by higher yields supported by increased premium revenue, loyalty program award redemption on our airlines, and managed corporate travel. Premium revenue reflected strong demand, the completion of cabin retrofits that added additional first and premium class seats, and additional revenue from newly launched transatlantic service from Seattle to Rome, London Heathrow, and Reykjavik. These increases were partially offset by softer demand in certain leisure markets, including Hawai'i, where significant rainfall earlier in the year impacted spring break and peak summer bookings in the second quarter. Loyalty program other revenue Loyalty program other revenue increased by $48 million, or 23%, primarily due to the launch of the Summit Visa Infinite premium credit card and the Atmos Rewards program in August 2025. The launch drove higher commission revenue from bank card and third-party partners, supported by growth in total active members and higher consumer spend. The increase also reflected continued benefits from the extension and expansion of Alaska's co-branded credit card agreement with Bank of America, executed in the first quarter of 2026. Cargo and other revenue Cargo and other revenue increased by $24 million, or 17%, primarily driven by improved economics under Alaska's ATSA with Amazon resulting from the amended agreement executed in the first quarter of 2026. Growth in international cargo volumes supported by expanded long-haul service and increased cargo connectivity across the combined network also contributed to the increase. OPERATING EXPENSES Total operating expenses increased by $806 million, or 24%. We believe it is useful to summarize operating expenses as follows, which is consistent with the way expenses are reported internally and evaluated by management: [[GREPCENT_TABLE]] [["","Three Months Ended June 30,"],["(in millions)","2026","","2025","","% Change"],["Aircraft fuel","$","1,305","","","$","700","","","86","%"],["Non-fuel operating expenses, excluding special items","2,886","","","2,671","","","8","%"],["Special items - operating","42","","","56","","","(25)","%"],["Total Operating Expenses","$","4,233","","","$","3,427","","","24","%"]] [[/GREPCENT_TABLE]] Aircraft fuel Aircraft fuel expense consists primarily of raw fuel expense, which generally reflects the "into-plane" price paid at the airport, as well as other taxes and fees. Raw fuel prices are influenced by global crude oil prices and refining costs, which can vary by region in the U.S. We primarily purchase fuel based on U.S. West Coast and Singapore jet fuel prices. [[GREPCENT_TABLE]] [["","Three Months Ended June 30,"],["(in millions)","2026","","2025","","% Change"],["Crude oil","$","684","","","$","453","","","51","%"],["Refining margins","517","","","164","","","215","%"],["Other(a)","104","","","83","","","25","%"],["Aircraft fuel","$","1,305","","","$","700","","","86","%"],["Fuel gallons","295","","","293","","","1","%"],["Fuel cost per gallon","$","4.43","","","$","2.39","","","85","%"]] [[/GREPCENT_TABLE]] (a) Includes taxes and other into-plane costs. Aircraft fuel expense increased $605 million, or 86%, due to higher per gallon fuel costs driven by elevated refining margins and crude oil prices. 21 Future fuel cost expectations are highly sensitive to disruption in crude oil supplies and refineries, which have been significantly impacted by recent geopolitical events. We expect that fuel costs will remain elevated and volatile until these disruptions are resolved. Non-fuel expenses The table below summarizes our operating expense line items, excluding fuel and other special items. Generally, we expect these expenses to increase in line with capacity, fleet size, and growth of the Company's operations. Significant or unusual changes compared to 2025 are more fully described below. [[GREPCENT_TABLE]] [["","Three Months Ended June 30,"],["(in millions)","2026","","2025","","% Change"],["Wages and benefits","$","1,239","","","$","1,165","","","6","%"],["Variable incentive pay","65","","","61","","","7","%"],["Aircraft maintenance","256","","","240","","","7","%"],["Aircraft rent","64","","","64","","","\u2014","%"],["Landing fees and other rentals","305","","","278","","","10","%"],["Contracted services","158","","","146","","","8","%"],["Selling expenses","115","","","105","","","10","%"],["Depreciation and amortization","207","","","199","","","4","%"],["Food and beverage service","107","","","97","","","10","%"],["Third-party regional carrier expense","68","","","69","","","(1)","%"],["Other","302","","","247","","","22","%"],["Total non-fuel operating expenses, excluding special items","$","2,886","","","$","2,671","","","8","%"]] [[/GREPCENT_TABLE]] Wages and benefits Wages and benefits increased by $74 million, or 6%. The primary components of Wages and benefits are shown in the following table: [Excerpt truncated for page length; source filing is linked above.] ## Latest 10-K MD&A (excerpt) Latest 10-K Item 7 source: https://www.sec.gov/Archives/edgar/data/766421/000076642126000010/alk-20251231.htm Complete FY 2025 MD&A: /company/ALK/mda/fy2025/ Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Confidence: high Filing date: 2026-02-12 Report date: 2025-12-31 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand our company and the present business environment. MD&A is provided as a supplement to – and should be read in conjunction with – our consolidated financial statements and the accompanying notes. All statements in the following discussion that are not statements of historical information or descriptions of current accounting policy are forward-looking statements. Please consider our forward-looking statements in light of the risks referred to in this report’s introductory cautionary note and the risks mentioned in Item 1A. "Risk Factors" within this document. This overview summarizes the MD&A, which includes the following sections: 33 •Year in Review - highlights from 2025 outlining some of the major events that occurred during the period, as well as forward-looking statements. •Results of Operations - an in-depth analysis of our financial and operational results for 2025. •Liquidity and Capital Resources - an overview of our financial position, analysis of cash flows, and relevant material cash commitments. •GAAP to Non-GAAP Reconciliations and Operating Statistics - reconciliations of reported non-GAAP financial measures to their most directly comparable financial measures reported on a GAAP basis, as well as operating statistics we use to measure operating performance. Dollar amounts in the MD&A are generally rounded to the nearest million. As a result, a manual recalculation of certain figures using these rounded amounts may not agree directly to our actual figures represented in the tables below. This section of the Form 10-K covers discussion of 2025 and 2024 pro forma results, and comparisons between those years. For a discussion of the year ended December 31, 2024 compared to the year ended December 31, 2023, please refer to Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024. Items affecting comparability As Hawaiian Holdings, Inc. was acquired by Air Group on September 18, 2024, its financial results were not reflected in reported figures in the periods preceding the acquisition date. As a result, the reported results for 2025 and 2024 are not comparable. To assist with the discussion of 2025 and 2024 results on a comparable basis and provide more meaningful discussion, certain supplemental unaudited pro forma income statement information is provided for 2024. Pro forma historical results were included with the Form 8-K filed on January 22, 2025. This information does not purport to reflect what our financial and operational results would have been had the acquisition been consummated at the beginning of the periods presented. Cybersecurity incident As previously disclosed in a Current Report on Form 8-K filed on June 27, 2025, on June 23, 2025, Hawaiian Airlines identified a cybersecurity incident affecting certain information technology systems. Upon identifying this incident, we followed established response protocols and immediately took steps to safeguard our network by disconnecting impacted Hawaiian systems and applications. Access for all systems was restored. Hawaiian's flights were not interrupted and continued to operate safely throughout our response. We engaged the relevant authorities and experts to assist in our investigation and remediation efforts. Based on the results of the investigation, the incident did not have a material impact on Hawaiian's business, results of operations, or financial condition. For a discussion of our risk factors associated with cybersecurity threats, please refer to Item 1A. "Risk Factors" within this document. YEAR IN REVIEW Overview We reported pretax income under GAAP of $146 million in 2025, compared to $545 million in 2024. On a pro forma basis, pretax income in 2024 was $228 million. Refer below for a more detailed discussion of the items impacting these results. 34 Single operating certificate On October 29, 2025, Alaska and Hawaiian obtained a single operating certificate from the FAA, officially recognizing Alaska and Hawaiian as one airline under the Alaska certificate. Labor update In 2025, Alaska flight attendants, represented by the Association of Flight Attendants (AFA), ratified a new three-year Collective Bargaining Agreement (CBA). Hawaiian flight attendants, represented by AFA, ratified a three-year extension to their existing CBA. Horizon technicians, represented by the Aircraft Mechanics Fraternal Association (AMFA) ratified a four-year CBA. McGee Air Services employees, represented by the International Association of Machinists and Aerospace Workers (IAM) ratified a five-year CBA. Horizon is negotiating with its pilots represented by the International Brotherhood of Teamsters (IBT), flight attendants represented by the Association of Flight Attendants (AFA), and dispatchers represented by the Transport Workers Union of America (TWU) for updated collective bargaining agreements. A mediator from the National Mediation Board is involved in negotiations with AFA and TWU. With one exception discussed below, Alaska has begun negotiations for joint collective bargaining agreements (JCBAs) covering each represented Alaska and Hawaiian workgroup. The process for determining which union will represent the combined technicians and related workgroup remains ongoing and, as a result, JCBA negotiations have not begun concerning that workgroup. Alaska intends to initiate those negotiations after the representation issue has been resolved. At December 31, 2025, Transition and Process Agreements have been negotiated for certain workgroups which define the process for negotiating JCBAs and set forth interim agreements until a JCBA is reached. Loyalty program update In August 2025, we launched Atmos Rewards, a single loyalty program combining Alaska’s Mileage Plan and Hawaiian’s HawaiianMiles. We also launched a new premium Atmos Summit co-branded credit card. These launches drove significant new card acquisitions, consumer spend, and member redemptions. In September 2025, amendments to the Atmos Rewards co-branded credit card agreement with Bank of America became effective, resulting in changes to the separately identifiable performance obligations. Irregular operations In 2025, we experienced multiple operational disruptions. Technology incidents in July and October, involving both internal IT systems and an external third-party cloud services provider, resulted in temporary ground stops, flight cancellations and delays, and periods of irregular operations. These outages negatively impacted pretax earnings by approximately $50 million. In addition, a government shutdown in October led to FAA‑mandated flight reductions and associated cancellations. Although operations normalized quickly after the government reopened, the disruption negatively impacted pretax earnings by approximately $30 million. Outlook Looking ahead to 2026, we expect to continue to realize value from Alaska Accelerate initiatives and synergies from the Hawaiian integration, which remain on track or ahead of plan relative to our initial expectations. We expect capacity growth for the year of 2% to 3% compared to the prior year. Given the inherent uncertainty of the macroeconomic environment, we remain focused on disciplined cost management, strong productivity, and delivering on our initiatives. RESULTS OF OPERATIONS 35 2025 COMPARED WITH PRO FORMA 2024 PRO FORMA OPERATING STATISTICS Below are operating statistics presented on a pro forma basis, which assumes Hawaiian is included in both 2024 and 2025. [[GREPCENT_TABLE]] [["","Twelve Months Ended December 31,"],["","2025","","2024 As Reported","","2024 Hawaiian Airlines(a)","","2024 Pro Forma","","Change"],["Consolidated Operating Statistics:"],["Revenue passengers (000)","58,627","","49,238","","7,896","","57,134","","2.6%"],["RPMs (000,000) \"traffic\"","77,110","","63,871","","12,695","","76,566","","0.7%"],["ASMs (000,000) \"capacity\"","92,962","","76,167","","15,041","","91,208","","1.9%"],["Load factor","82.9%","","83.9%","","84.4%","","83.9%","","(1.0) pts"],["Yield","16.64\u00a2","","16.68\u00a2","","14.56\u00a2","","16.33\u00a2","","1.9%"],["PRASM","13.81\u00a2","","13.99\u00a2","","12.29\u00a2","","13.71\u00a2","","0.7%"],["RASM","15.32\u00a2","","15.41\u00a2","","13.58\u00a2","","15.11\u00a2","","1.4%"],["CASMex","11.42\u00a2","","10.80\u00a2","","11.54\u00a2","","10.91\u00a2","","4.7%"],["Economic fuel cost per gallon","$2.52","","$2.74","","$2.73","","$2.74","","(8.0)%"],["Fuel gallons (000,000)","1,146","","925","","198","","1,123","","2.0%"],["ASMs per gallon","81.1","","82.3","","76.0","","81.2","","(0.1)%"],["Departures (000)","543","","461","","58","","519","","4.6%"],["Average full-time equivalent employees (FTEs)","31,585","","25,751","","6,456","","30,144","","4.8%"]] [[/GREPCENT_TABLE]] (a) The Hawaiian column reflects results prior to the consummation of the merger, comprising the period January 1, 2024 to September 17, 2024. PRO FORMA OPERATING REVENUE On a pro forma basis, total operating revenue increased $460 million, or 3%. The changes, including the reconciliation of the impact of Hawaiian on the combined results, are summarized in the following table: [[GREPCENT_TABLE]] [["","Twelve Months Ended December 31,"],["(in millions)","2025","","2024 As Reported","","2024 Hawaiian Airlines(a)","","2024 Pro Forma","","% Change"],["Passenger revenue","$","12,835","","","$","10,654","","","$","1,848","","","$","12,502","","","3","%"],["Loyalty program other revenue","855","","","733","","","84","","","817","","","5","%"],["Cargo and other revenue","549","","","348","","","112","","","460","","","19","%"],["Total Operating Revenue","$","14,239","","","$","11,735","","","$","2,044","","","$","13,779","","","3","%"]] [[/GREPCENT_TABLE]] (a) As provided on Form 8-K filed with the SEC on January 22, 2025, including certain immaterial reclassification and policy adjustments. The table below presents operating revenue details by principal geographic region (as defined by the U.S. Department of Transportation), and the percentage change of certain operational results on a pro forma basis for the twelve months ended December 31, 2025. [[GREPCENT_TABLE]] [["","Twelve Months Ended December 31, 2025","","Increase (Decrease) vs. Pro Forma Prior Year"],["(in millions)","Total Operating Revenue","","Passenger Revenue","","RPMs","","ASMs","","Yield","","PRASM"],["Domestic","$","12,855","","","3%","","\u2014%","","2%","","3%","","1%"],["Latin America","754","","","\u2014%","","(1)%","","2%","","\u2014%","","(2)%"],["Pacific","630","","","(2)%","","8%","","8%","","(9)%","","(9)%"],["Total Operating Revenue","$","14,239","","","3%","","1%","","2%","","2%","","1%"]] [[/GREPCENT_TABLE]] 36 Passenger revenue On a pro forma basis, Passenger revenue increased $333 million, or 3%, as traffic increased by 1% and yield grew by 2%. Hawaiian passenger revenue improved meaningfully, driven by demand environment strength in the state of Hawai'i, as well as benefits from our integration synergies and commercial initiatives. Increased premium cabin revenues, corporate travel, and loyalty program award redemption on our airlines contributed to higher yield. Additionally, prior year results were negatively impacted by $150 million due to the B737-9 grounding in the first quarter of 2024. Loyalty program other revenue On a pro forma basis, Loyalty program other revenue increased $38 million, or 5%, due to higher commission revenue from bank card and third party partners, which was driven by increased consumer spend and incremental credit card acquisitions from the launch of the Atmos Rewards prog [Excerpt truncated for page length; the complete text is on the linked full-MD&A page.] Read the full FY 2025 MD&A: /company/ALK/mda/fy2025/ All MD&A years: /company/ALK/mda/ ## MD&A history Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page. - [FY 2024 MD&A](/company/ALK/mda/fy2024/): filed 2025-02-14; accession 0000766421-25-000009 (https://www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm) - [FY 2023 MD&A](/company/ALK/mda/fy2023/): filed 2024-02-14; accession 0000766421-24-000012 (https://www.sec.gov/Archives/edgar/data/766421/000076642124000012/alk-20231231.htm) - [FY 2022 MD&A](/company/ALK/mda/fy2022/): filed 2023-02-13; accession 0000766421-23-000009 (https://www.sec.gov/Archives/edgar/data/766421/000076642123000009/alk-20221231.htm) - [FY 2021 MD&A](/company/ALK/mda/fy2021/): filed 2022-02-11; accession 0000766421-22-000009 (https://www.sec.gov/Archives/edgar/data/766421/000076642122000009/alk-20211231.htm) ## Macro cross-references Indicators mapped to this company's SIC classification (industry 4512 Air Transportation, Scheduled) by grepcent's deterministic macro-sector crosswalk. A navigational mapping, not a statistical or causal claim. - [GDPC1](/indicator/GDPC1/): Real Gross Domestic Product - [INDPRO](/indicator/INDPRO/): Industrial Production: Total Index - [TCU](/indicator/TCU/): Capacity Utilization: Total Index - [DGS10](/indicator/DGS10/): Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity - [BOPGSTB](/indicator/BOPGSTB/): U.S. International Trade in Goods and Services: Balance Macro-to-micro threads including this sector: [Money & trade](/thread/money-trade/), [Trade & external](/thread/trade-external/). All macro indicators: /indicators/ ## For LLMs & downloads Markdown twin: /company/ALK.md · JSON record: /company/ALK.json · verified financials: /company/ALK/financials.json / /company/ALK/financials.csv · machine TOC for the whole site: /llms.txt