Alaska Air(ALK) - 2024 Q4 - Annual Results

Revenue and Earnings Performance - Record full year revenue of $11.7 billion in 2024[1] - Fourth quarter adjusted earnings per share of$0.97, exceeding guidance by $0.50 at the midpoint[5] - Full year adjusted pretax margin of 7.1$5.75[10] - Total operating revenue increased by 38% to $3.534 billion in Q4 2024 compared to$2.553 billion in Q4 2023[22] - Passenger revenue grew by 37% to $3.178 billion in Q4 2024 from$2.326 billion in Q4 2023[22] - Cargo and other revenue surged by 113% to $132 million in Q4 2024 from$62 million in Q4 2023[22] - Operating income rose by 128% to $73 million in Q4 2024 compared to$32 million in Q4 2023[22] - Net income improved significantly to $71 million in Q4 2024 from a net loss of$2 million in Q4 2023[22] - Passenger revenue for Q4 2024 increased by 9% to $3.178 billion compared to the pro forma$2.928 billion in Q4 2023[57] - Total operating revenue for Q4 2024 grew by 10% to $3.534 billion from the pro forma$3.221 billion in Q4 2023[57] Cash Flow and Financial Position - Generated $1.5 billion in operating cash flow for the full year 2024[12] - Total assets increased to$19.768 billion as of December 31, 2024, up from $14.613 billion as of December 31, 2023[23] - Cash and cash equivalents grew substantially to$1.201 billion as of December 31, 2024, compared to $281 million as of December 31, 2023[23] - Net cash provided by operating activities was$1.464 billion for the full year 2024, with $274 million generated in Q4 2024[26] Share Repurchases and Capital Allocation - Repurchased$250 million in outstanding shares in Q4 2024, totaling $312 million for the year[16] Operational Metrics and Performance - Q4 2024 RASM increased by 7.0$2.54 in Q4 2024 from $3.42 in Q4 2023[36] - Adjusted income before income tax increased to$137 million in Q4 2024 from $57 million in Q4 2023[40] - Adjusted pretax margin improved to 3.9$3,461 million, compared to $3,312 million in Q4 2023[59] - Aircraft fuel costs decreased to$702 million in Q4 2024 from $919 million in Q4 2023[59] - CASMex (operating costs excluding fuel, freighter costs, and special items per ASM) increased to 11.57¢ in Q4 2024 from 10.65¢ in Q4 2023[59] - ASMs (available seat miles) increased to 22,744 million in Q4 2024 from 22,181 million in Q4 2023[59] - Freighter costs increased to$37 million in Q4 2024 from $15 million in Q4 2023[59] - Special items - operating increased to$91 million in Q4 2024 from $15 million in Q4 2023[59] - Total operating expenses, excluding fuel, freighter costs, and special items, increased to$2,631 million in Q4 2024 from $2,363 million in Q4 2023[59] Strategic Initiatives and Future Plans - Announced plans to add 12 international widebody destinations by 2030[16] - Launched Huaka'i by Hawaiian, offering exclusive travel benefits to HawaiianMiles members[16] Debt and Leverage - Debt-to-capitalization ratio, including leases, increased to 58$80 million in Q4 2024 and $208 million for the full year 2024[33] - Fleet transition costs resulted in a benefit of$40 million in Q4 2024 compared to an expense of $30 million in Q4 2023[33] Key Metrics and Management Focus - CASMex is a key metric used by management and the Air Group Board of Directors to assess cost performance[61] - Adjusted pretax income is a critical metric for the employee incentive plan, covering the majority of Air Group employees[61] - Fuel expense represents a significant percentage of total operating expenses, and fluctuations in fuel prices impact unit revenue in the mid-to-long term[61]