Alaska Air Credits Q4 Revenue Jump To Strong Travel Demand, Confirms $1 Billion Share Buyback Plan

Alaska Air Group, Inc. ALK shares are trading higher premarket on Thursday. On Wednesday, the company reported fourth-quarter sales of $3.53 billion, which surpassed the street view of $3.43 billion.

The quarterly revenue exceeded expectations for both Alaska and Hawaiian, aided by strong leisure demand and a rebound in corporate travel.

Favorable winter weather enabled reliable operations during the holiday season, with a higher-than-expected completion rate and load factor.

The Seattle-based company disclosed capacity (available seat miles) growth of 2.5% Y/Y and operating revenue per available seat miles increase of 7% Y/Y in the quarter.

Unit revenues, which turned positive in August, improved sequentially from 1% in the third quarter to 7% in the fourth quarter.

This momentum has continued into the early first quarter, thanks to close-in booking strength and a stable industry capacity outlook, positioning us for a solid start to 2025.

Unit costs rose 8.6% yearly but came in better than guidance, as disciplined non-fuel cost control offset higher performance-based pay accruals and increased capacity from improved completion rates.

While 2024 unit costs remain pressured by aircraft delivery delays, the company expects it to improve in 2025 as resource levels and capacity normalize.

Adjusted EPS of 97 cents, beating the consensus of $0.44.

Adjusted EPS came about 50 cents above the midpoint guidance, led by revenue growth, cost improvements, and a decline in non-operating expenses.

CEO Ben Minicucci said, “This was a transformational year as we brought Hawaiian Airlines into Alaska Air Group and began our journey to unlock $1 billion in incremental pretax profit over the next three years.”

The company generated an operating cash flow of $1.5 billion in 2024. As of Dec. 31, the company’s cash and cash equivalents stood at $1.2 billion.

Buyback: The company repurchased 3.9 million shares of common stock for around $250 million in the fourth quarter, bringing total repurchases to 5.5 million shares for $312 million in 2024.

The company authorized a new share repurchase plan of $1 billion to be executed over the next four years, with repurchases beginning in January 2025.

Outlook: Alaska Air projects a first-quarter adjusted EPS loss of 70 cents to 50 cents vs. a consensus loss of 70 cents and sees FY25 adjusted EPS of greater than $5.75 compared to a consensus loss of $5.90.

Investors can gain exposure to the stock via Themes Airlines ETF AIRL and iShares Focused Value Factor ETF FOVL.

Price Action: ALK shares are up 2.21% at $68.89 premarket at the last check Thursday.

Read Next: