PART I. FINANCIAL INFORMATION [ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) This section presents the unaudited condensed consolidated financial statements for Alaska Air Group, Inc., including balance sheets, statements of operations, and cash flows, reflecting the company's financial position and performance after the Hawaiian Holdings acquisition Condensed Consolidated Balance Sheet Highlights (in millions) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total cash, restricted cash, and marketable securities** | $2,152 | $2,504 | | **Total Current Assets** | $3,507 | $3,760 | | **Total Property and Equipment - Net** | $11,215 | $10,781 | | **Total Assets** | **$19,885** | **$19,768** | | **Total Current Liabilities** | $6,709 | $6,145 | | **Total Liabilities** | $15,943 | $15,396 | | **Total Shareholders' Equity** | $3,942 | $4,372 | | **Total Liabilities and Shareholders' Equity** | **$19,885** | **$19,768** | Condensed Consolidated Statements of Operations Highlights (in millions, except per share amounts) | Metric | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenue** | $3,704 | $2,897 | $6,841 | $5,129 | | **Operating Income** | $277 | $322 | $80 | $156 | | **Net Income** | $172 | $220 | $6 | $88 | | **Diluted Earnings Per Share** | $1.42 | $1.71 | $0.05 | $0.69 | Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended June 30, in millions) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $835 | $872 | | **Net cash used in investing activities** | ($747) | ($135) | | **Net cash provided by (used in) financing activities** | ($544) | $87 | | **Net (decrease) increase in cash and cash equivalents** | ($456) | $824 | [NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](index=10&type=section&id=NOTES%20TO%20THE%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes detail accounting policies and financial items, including the Hawaiian Holdings acquisition, revenue recognition, fair value measurements, debt, aircraft commitments, legal contingencies, and segment performance - The company completed its acquisition of Hawaiian Holdings, Inc. on September 18, 2024, for a total consideration of **$977 million**[30](index=30&type=chunk) - Merger-related costs amounted to **$53 million** for the three months and **$93 million** for the six months ended June 30, 2025, classified under Special items[33](index=33&type=chunk) Total Revenue Breakdown (in millions) | Revenue Category | Q2 2025 | Q2 2024 | H1 2025 | H1 2024 | | :--- | :--- | :--- | :--- | :--- | | **Passenger revenue** | $3,355 | $2,651 | $6,163 | $4,655 | | **Loyalty program other revenue** | $210 | $174 | $417 | $338 | | **Cargo and other revenue** | $139 | $72 | $261 | $136 | - As of June 30, 2025, the company had total debt of **$4.95 billion**, with a weighted-average interest rate of **4.0%** for fixed-rate debt and **6.0%** for variable-rate debt[58](index=58&type=chunk) - The company has firm orders for **86 aircraft** (75 B737s, 8 B787-9s, 3 E175s) for delivery between 2025-2029, with total aircraft-related commitments of **$4.53 billion**[69](index=69&type=chunk)[71](index=71&type=chunk) - A **$1 billion** share repurchase program was authorized in December 2024. During the first six months of 2025, the company repurchased **10.5 million shares** for **$535 million**, with **$465 million** remaining under the program[75](index=75&type=chunk) Segment Pretax Income (Loss) - Q2 2025 (in millions) | Segment | Pretax Income (Loss) | | :--- | :--- | | Alaska Airlines | $267 | | Hawaiian Airlines | $1 | | Regional | $7 | [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=27&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management analyzes financial performance, comparing Q2 and H1 2025 results to pro forma 2024 figures, covering revenue, expenses, segment performance, liquidity, capital resources, and future outlook, noting a non-material cybersecurity incident [Second Quarter Review and Outlook](index=28&type=section&id=Second%20Quarter%20Review%20and%20Outlook) The company reported Q2 2025 GAAP income before tax of $238 million, with a positive full-year 2025 outlook projecting 2% capacity growth and flat to low single-digit unit revenue increase on a pro forma basis - A cybersecurity incident was identified at Hawaiian Airlines on June 23, 2025, but it is not expected to have a material impact on business, operations, or financial condition[99](index=99&type=chunk)[100](index=100&type=chunk) - New collective bargaining agreements were ratified for Hawaiian flight attendants and Horizon technicians in Q2 2025[104](index=104&type=chunk) - **Full Year 2025 Outlook (Pro Forma):** - Capacity: **Up 2% YoY** - Unit Revenue (RASM): **Flat to up low single digits** - Unit Cost (CASMex): **Up mid single digits**[107](index=107&type=chunk) [Results of Operations](index=29&type=section&id=Results%20of%20Operations) This section details pro forma operating results for Q2 and H1 2025 versus 2024, showing Q2 revenue growth of 2% to **$3.7 billion** and a 2% rise in operating expenses, with segment performance analysis Q2 2025 vs Q2 2024 Pro Forma Operating Metrics | Metric | Q2 2025 | Q2 2024 Pro Forma | % Change | | :--- | :--- | :--- | :--- | | **Total Operating Revenue (millions)** | $3,704 | $3,629 | 2% | | **RASM (unit revenue)** | 15.39¢ | 15.49¢ | (0.6)% | | **CASMex (unit cost ex-fuel)** | 10.90¢ | 10.23¢ | 6.5% | | **Economic fuel cost per gallon** | $2.39 | $2.81 | (14.9)% | H1 2025 vs H1 2024 Pro Forma Operating Metrics | Metric | H1 2025 | H1 2024 Pro Forma | % Change | | :--- | :--- | :--- | :--- | | **Total Operating Revenue (millions)** | $6,841 | $6,506 | 5% | | **RASM (unit revenue)** | 15.11¢ | 14.84¢ | 1.8% | | **CASMex (unit cost ex-fuel)** | 11.36¢ | 10.89¢ | 4.3% | | **Economic fuel cost per gallon** | $2.49 | $2.88 | (13.4)% | - On a pro forma basis, Q2 2025 wages and benefits increased **12%** to **$1.165 billion**, driven by higher headcount and wage rates[126](index=126&type=chunk) - Hawaiian Airlines' Q2 2025 pretax profit improved significantly to **$1 million** from a pro forma loss of **$83 million** in Q2 2024, driven by a **$125 million** revenue increase from network optimization and recovery from the 2023 Maui wildfires[137](index=137&type=chunk) [Liquidity and Capital Resources](index=41&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company maintained strong liquidity with **$2.2 billion** in cash, a 60% debt-to-capitalization ratio, and planned 2025 capital expenditures of **$1.4 to $1.6 billion** for aircraft, projecting a 2027 fleet of **464 aircraft** Key Financial Condition Indicators (in millions) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash, marketable securities, and unused lines of credit** | $2,974 | $3,325 | | **Liquidity as a % of trailing twelve months' revenue** | 22% | 28% | | **Debt-to-capitalization ratio, including leases** | 60% | 58% | - Planned capital expenditures for 2025 are estimated to be between **$1.4 billion** and **$1.6 billion**[175](index=175&type=chunk) - The company sold **four B737-900 aircraft** in Q2 2025 for proceeds of approximately **$53 million**, recognizing a gain of **$25 million**. The remaining **eight B737-900s** are expected to be sold by the end of 2025[173](index=173&type=chunk) Anticipated Total Fleet Count | Year-End | Total Air Group Fleet | | :--- | :--- | | **June 30, 2025 (Actual)** | 409 | | **2025 (Projected)** | 414 | | **2026 (Projected)** | 425 | | **2027 (Projected)** | 464 | [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK](index=49&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURE%20ABOUT%20MARKET%20RISK) No material changes in market risk were reported since the Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes in market risk were reported since the last annual report[200](index=200&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=50&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls and procedures were effective as of June 30, 2025, with ongoing integration of Hawaiian Holdings' internal controls and implementation of alternative controls post-cybersecurity incident - The company's certifying officers concluded that disclosure controls and procedures were effective as of June 30, 2025[201](index=201&type=chunk) - The integration of Hawaiian Holdings' internal controls is ongoing. Alternative and compensating controls were used following the Hawaiian Airlines cybersecurity incident to ensure the accuracy of financial reporting[202](index=202&type=chunk)[203](index=203&type=chunk) PART II. OTHER INFORMATION [ITEM 1. LEGAL PROCEEDINGS](index=51&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) This section refers to Note 7 for ongoing legal proceedings, primarily detailing litigation with Virgin Group over a trademark license agreement, for which a **$61 million** accrual is held - The company is involved in a dispute with Virgin Group over a trademark license agreement. An appellate court affirmed a lower court ruling in favor of Virgin Group. The company has accrued **$61 million** for this matter as of June 30, 2025[73](index=73&type=chunk)[206](index=206&type=chunk) [ITEM 1A. RISK FACTORS](index=51&type=section&id=ITEM%201A.%20RISK%20FACTORS) The company refers to its 2024 Form 10-K for a detailed discussion of risk factors affecting its business - There are no new risk factors disclosed; the company refers to its 2024 Annual Report on Form 10-K for a comprehensive list[207](index=207&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=51&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This section details the company's Q2 2025 common stock repurchases, where over **8.7 million shares** were bought back under a **$1 billion** plan authorized in December 2024 Share Repurchases in Q2 2025 | Period | Total Shares Purchased | Average Price Paid per Share | | :--- | :--- | :--- | | **April 2025** | 2,521,296 | $44.02 | | **May 2025** | 4,531,750 | $50.99 | | **June 2025** | 1,667,963 | $51.05 | | **Total Q2** | **8,721,009** | **$48.99** | - As of June 30, 2025, **$465 million** remained available for future repurchases under the current plan[209](index=209&type=chunk) [ITEM 5. OTHER INFORMATION](index=51&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No director or officer adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No director or officer made changes to their Rule 10b5-1 trading plans during the three months ended June 30, 2025[212](index=212&type=chunk)

Core Insights - Alaska Airlines is launching transatlantic flights for the first time, marking a significant expansion in its international routes following a $1.9 billion acquisition of Hawaiian Airlines [1][2] - The airline has introduced a new livery for its Boeing 787s, described as its "first-ever global livery," inspired by the northern lights and reflecting its transition to a global airline [9][10] Fleet Expansion - The acquisition of Hawaiian Airlines has added four Boeing 787 Dreamliners to Alaska Airlines' fleet, with an additional 13 on order, transitioning from single-aisle jets to wide-body aircraft [2] - The first Dreamliner flights will commence from Seattle to Seoul on September 12, with additional routes to Tokyo and Rome planned for early 2024 [2][4] New Routes - Alaska Airlines will begin service to Reykjavík, Iceland from Seattle in May, utilizing the Boeing 737 Max, marking it as the longest route operated by a US airline with such an aircraft [3] - By next spring, the airline will also offer daily, non-stop flights to London Heathrow using the Boeing 787, catering to a high-demand international market [4] Customer Experience - The Boeing 787's business class will feature fully lie-flat seats with privacy doors, enhancing the premium travel experience, which has become increasingly important post-pandemic [4][8] - The airline aims to attract new customers with its updated premium offerings, despite a slow recovery in overall travel demand [8] Livery Redesign - The new livery for the Boeing 787s features blue and cyan colors inspired by the northern lights, marking the first update since 2016 [9] - The redesign has led to the removal of the smiling Inuit character, Chester, from the livery of the Dreamliners, although he will still appear on most other Alaska Airlines jets [11]

Summary of Alkane Resources (ALK) 2025 Conference Call Company Overview - Alkane Resources has recently completed a merger with Mandalay Resources, with the court in British Columbia ratifying the merger [2][3] - The new board has been formed, and the first board meeting is scheduled [3] Financial Performance - The combined market capitalization is approaching AUD 1 billion, with expectations to enter the ASX 300 and double the share in the GDXJ index [4][36] - As of June 30, the company has AUD 219 million in cash, indicating strong financial health [5] - Last year, the company produced approximately 161,000 ounces of gold equivalent and anticipates increased production this year [3][34] Production and Assets - The company operates three mines: Costerfield (Victoria), Tomingley (New South Wales), and Bjorkdal (Sweden) [3][7] - Production breakdown: - Tomingley: Over 70,000 ounces of gold last year [7] - Costerfield: Just under 50,000 ounces equivalent [7] - Bjorkdal: Just under 40,000 ounces [7] - The company aims to increase production across all three assets [7][34] Growth Opportunities - Significant drilling programs are planned, with an investment of AUD 40-50 million across the group [19] - The Bodder Kaiser project is highlighted as a large undeveloped resource with an estimated 15 million ounces equivalent, making it the second-largest undeveloped deposit in Australia [30][31] - The company is focused on internal growth options before pursuing further acquisitions [10] Market Position and Strategy - Alkane Resources is positioned as the largest Western producer of antimony and is looking to capitalize on market opportunities [20][21] - The company emphasizes the stability and profitability of mining operations in New South Wales and Victoria, countering negative perceptions [29] Conclusion - Alkane Resources is poised for growth with a solid financial foundation, a strong production outlook, and significant exploration and development plans [34][36] - The company encourages stakeholders to reassess its value in light of recent developments and market positioning [36]

Company Overview - Alkane Resources Limited completed a merger with Mandalay, becoming a growing gold and antimony producer[11, 12] - The combined company has a market capitalization of approximately A$1 billion[21] - The company anticipates a valuation re-rate driven by GDXJ and ASX 300 index inclusion[21] - Alkane had a combined cash and bullion balance of A$218 million as of June 30, 2025, with approximately A$60 million in debt[20, 22] Production and Growth - Diversified production of 161,000 AuEq ounces in FY2025, with further growth expected in FY2026[15] - Tomingley produced 70,100 ounces of gold, Björkdal produced 41,400 ounces of gold, and Costerfield produced 49,400 AuEq ounces in the period from July 2024 to June 2025[25] - The company is targeting approximately 40,000 AuEq ounces produced per quarter[29] Resource and Reserve Highlights - Boda-Kaiser has approximately 14.7 million AuEq ounces in resources[87] - Tomingley Gold Mine has total ore reserves of 674,000 tonnes at a grade of 1.6 g/t Au, containing 34,000 ounces of gold[98] - Tomingley Gold Extension Project has total ore reserves of 11,082,000 tonnes at a grade of 1.9 g/t Au, containing 663,000 ounces of gold[101]

Group 1 - Alaska Airlines is expanding its global reach by starting new flights from Seattle to London and Reykjavik, Iceland, in May [1] - The airline will operate daily flights between Seattle and London's Heathrow Airport using Boeing 787-9 Dreamliners, targeting both business and leisure travelers [1] - Seasonal service from Seattle to Reykjavik will be provided by a 737 Max 8 during spring and summer [1] Group 2 - In June, Alaska Airlines announced plans to initiate nonstop flights between Seattle and Rome next year [2] - Delta Air Lines, a competitor, also revealed plans to offer flights between Seattle and Rome, as well as Barcelona [2]

Core Insights - Alaska Air Group, Inc. (ALK) reported Q2 2025 earnings of $1.78 per share, exceeding the Zacks Consensus Estimate of $1.56 but down 30.2% year over year [1][9] - Operating revenues reached $3.70 billion, surpassing the Zacks Consensus Estimate of $3.65 billion, and increased by 27.8% year over year, with passenger revenues contributing 90.5% of the total [1][9] Financial Performance - Passenger revenues totaled $3.35 billion, while cargo and other revenues grew 93% year over year to $139 million, and loyalty program revenues increased by 21% to $210 million [2] - Revenue per available seat mile (RASM) decreased by 3.3% to 15.39 cents, and yield fell by 4% to 16.62 cents [3] - Consolidated traffic grew 31.8% to 20.17 billion revenue passenger miles, while capacity increased by 32.2% to 24.05 billion average seat miles, leading to a slight drop in load factor to 83.9% from 84.1% [4] Operating Expenses - Total operating expenses rose by 33% to $3.42 billion, with economic fuel prices per gallon decreasing by 15.8% to $2.39 [5] - Consolidated operating costs per available seat mile (excluding fuel and special items) increased by 10.2% [5] Liquidity and Capital Structure - As of June 30, 2025, Alaska Air had $750 million in cash and cash equivalents, down from $1.04 billion in the previous quarter, with long-term debt increasing to $4.44 billion [6] - The debt-to-capitalization ratio stood at 60% at the end of the reported quarter, and the company repurchased 8.7 million shares for $428 million during Q2 [6] Future Outlook - For Q3 2025, ALK anticipates adjusted earnings per share between $1.00 and $1.40, with the Zacks Consensus Estimate at $1.55 [7] - The company expects available seat miles to decrease by 1% year over year, with RASM projected to remain flat or increase by low single digits, while CASM is expected to rise by mid to high single digits [7] - For the full year 2025, ALK expects adjusted earnings per share to exceed $3.25, with the Zacks Consensus Estimate at $3.33 [8][10]

Core Viewpoint - Alaska Air Group (ALK) has been trending in stock searches, with a recent performance of +4.8% over the past month, outperforming the S&P 500's +2.7% and the airline industry’s +9.2% [1] Earnings Estimate Revisions - Alaska Air is expected to report earnings of $1.59 per share for the current quarter, reflecting a year-over-year decline of -29.3%, with a consensus estimate change of -34% over the last 30 days [4] - For the current fiscal year, the consensus earnings estimate is $3.34, indicating a -31.4% change from the previous year, with a recent estimate change of -7.3% [4] - The next fiscal year's consensus earnings estimate is $6.19, suggesting an increase of +85.3% compared to the previous year, although it has changed -5.1% in the past month [5] - The Zacks Rank for Alaska Air is 4 (Sell), indicating potential underperformance in the near term based on earnings estimate revisions [6] Projected Revenue Growth - The consensus sales estimate for the current quarter is $3.74 billion, representing a year-over-year increase of +21.9% [10] - For the current fiscal year, the revenue estimate is $14.22 billion, indicating a +21.2% change, while the next fiscal year's estimate is $15.2 billion, reflecting a +6.9% change [10] Last Reported Results and Surprise History - In the last reported quarter, Alaska Air achieved revenues of $3.7 billion, a year-over-year increase of +27.9%, with an EPS of $1.78 compared to $2.55 a year ago [11] - The company surpassed consensus EPS estimates three times and revenue estimates three times over the last four quarters [12] Valuation - Alaska Air is graded A on the Zacks Value Style Score, indicating it is trading at a discount compared to its peers [16]

Core Points - Alaska Airlines is expanding its network with seven new routes connecting California and the Pacific Northwest starting in October 2025 [1][3] - The new routes include flights from Hollywood Burbank Airport to various destinations in Oregon and Washington, as well as seasonal services from San Diego to Sun Valley [2][7] - The airline emphasizes its position as the only global airline based on the West Coast, offering the most flights and seats between California, Washington, and Oregon [3] Route Details - New nonstop routes include: - Burbank – Eugene: Starting October 26, 2025, year-round, daily service [5] - Burbank – Pasco: Starting October 26, 2025, year-round, daily service [5] - Burbank – Redmond: Starting October 26, 2025, year-round, daily service [5] - Palm Springs – Santa Rosa: Starting October 26, 2025, winter service, 5 times weekly [5] - San Diego – Sun Valley: Starting December 18, 2025, winter service, 3 times weekly [5] - Boise – Ontario: Starting January 7, 2026, year-round, daily service [5] - Spokane – Orange County: Starting January 7, 2026, year-round, daily service [5] Aircraft and Services - The new routes will utilize the Embraer 175 aircraft, designed for short to mid-range flights, featuring 76 seats with no middle seats, onboard entertainment, Wi-Fi, and power outlets in First Class [5] - Alaska Airlines aims to enhance travel options for leisure and business travelers between growing markets in California and the Pacific Northwest [3][8] Market Position - Alaska Airlines is the largest carrier in several of the new route markets, including Burbank to Redmond and Boise to Ontario, and is expanding its service offerings to meet demand [8][9] - The airline is part of the Alaska Air Group, which includes Hawaiian Airlines and Horizon Air, and operates hubs in major cities across North America [9]

Core Viewpoint - Alaska Air Group reported strong Q2 2025 results, with adjusted earnings per share of $1.78, exceeding analyst estimates, and revenue of $3.70 billion, surpassing consensus expectations, driven by strategic execution and integration of Hawaiian Airlines [1][2]. Financial Performance - Adjusted EPS for Q2 2025 was $1.78, above the estimate of $1.54, while revenue reached $3.70 billion, a 2% increase year-over-year [2]. - Total operating revenue rose 2% year-over-year, with passenger revenue at $3.36 billion, up 1% compared to pro forma Q2 2024 [7]. - Loyalty program revenue increased by 3% to $210 million, contributing positively to overall revenue [7]. Operational Metrics - The adjusted pretax margin decreased to 8.0%, down from 10.3% in Q2 2024, reflecting cost challenges and slight pressure on revenue yields [9]. - CASMex, a key efficiency metric, was 10.90¢, up 10.2% from the prior year, driven by increased labor and maintenance costs [9]. - Operating expenses excluding fuel increased by 6%, with wages and benefits rising by 49% year-over-year and aircraft maintenance costs increasing by 86% [7]. Strategic Focus and Integration - The integration of Hawaiian Airlines is a key strategic focus, with significant progress made, including an improved adjusted pretax margin for Hawaiian and plans for full integration by 2027 [5][4]. - Alaska Air Group is expanding its network, including new transatlantic routes and partnerships, which are expected to enhance revenue streams [6]. Future Outlook - Management provided guidance for Q3 adjusted EPS in the range of $1.00 to $1.40, factoring in an expected negative impact from an IT outage [11]. - For fiscal 2025, the company anticipates capacity growth of about 2% and expects RASM to be flat to up low single digits [11]. - Investors are focused on the execution of integration milestones and trends in operating costs, with a strong balance sheet reported, including $2.1 billion in unrestricted cash [12].

Financial Data and Key Metrics Changes - The company reported a second quarter GAAP net income of $172 million, with adjusted net income of $215 million excluding special items and fuel hedge adjustments [4] - Adjusted earnings per share reached $1.78, exceeding the high end of guidance [6] - Total liquidity at the end of the quarter was $3 billion, with net leverage at 2.4 times and debt to capital at 60% [28][29] - Unit costs increased by 6.5% year over year, primarily due to elevated airport real estate costs and maintenance [30] Business Line Data and Key Metrics Changes - Total revenue reached a record $3.7 billion, up 2% year over year, with a load factor of 84% [13][14] - Premium revenues increased by 5% year over year, with Hawaiian assets seeing a nearly 19% rise [14] - The company has retrofitted nearly 90 of its 737 aircraft to enhance premium offerings, increasing premium seat share from 26% to 27% [8][15] Market Data and Key Metrics Changes - The Hawaiian franchise reported a 17% increase in revenues, with unit revenues up 4% and capacity up 13% [47] - Neighbor Island operations showed significant improvement, with double-digit margin increases [18] - Corporate revenue declined by 5% year over year, but small and medium businesses demonstrated resilience, leading to a total corporate revenue decline of only 1% [25] Company Strategy and Development Direction - The company is focused on executing the Alaska Accelerate plan, aiming to unlock $1 billion in incremental profit over the next two years [11][12] - Plans include launching a new loyalty program and premium credit card to enhance customer engagement and loyalty [9][17] - The company is expanding its international operations, with new routes planned to Tokyo and Rome, supported by additional aircraft orders [10][20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about demand stabilization and improving consumer sentiment, with expectations for stronger performance in the latter half of the year [11][24] - The company anticipates delivering at least $3.25 in adjusted earnings per share for the full year, with a long-term target of $10 per share by 2027 [11][29] - Management highlighted the importance of synergies and operational discipline in achieving financial goals [27] Other Important Information - The company experienced operational disruptions due to an IT outage but managed to restore operations quickly [5] - Cargo revenues increased by 34% year over year, with successful integration of new freighter aircraft [20][21] Q&A Session Summary Question: Expectations for Q3 to Q4 ramp - Management indicated that positive momentum is expected to continue into Q4, with synergies contributing to improved performance [38][39] Question: Buyback strategy - Management acknowledged that the stock does not reflect the company's earnings power and indicated a balanced approach to share repurchases moving forward [42][44] Question: Hawaiian franchise performance - Management reported strong performance in the Hawaiian franchise, attributing it to synergies and improved market conditions [47][48] Question: Q3 and Q4 seasonality - Management suggested that Q3 may become stronger in the future, with improved demand dynamics expected [55] Question: Corporate revenue dynamics - Management noted a double-digit increase in business demand recently, with small and medium businesses showing resilience despite challenges in the corporate sector [26][82]