Led the industry in completion rate in the third quarter

Delivered adjusted pretax margin of 11.4%, among the best in the industry despite West Coast fuel price headwinds

Flew final Airbus operating flight, completing Alaska’s transition to an all-Boeing fleet

Alaska Air Group (NYSE: ALK) today reported financial results for the third quarter ending September 30, 2023, and provided outlook for the fourth quarter ending December 31, 2023.

I am grateful to our people for delivering industry-leading operational performance and strong cost discipline this quarter,” said CEO Ben Minicucci. “Our 11.4% adjusted pretax margin is among the best in the industry despite external headwinds. Our investments in our all-Boeing fleet, premium seating on 100% of our aircraft and access for our loyalty members to a global alliance provide our guests with a premium domestic product that rivals any in the industry.”

Financial Highlights:

• Reported net income for the third quarter of 2023 under Generally Accepted Accounting Principles (GAAP) of $139 million, or $1.08 per share, compared to a net income of $40 million, or $0.31 per share, for the third quarter of 2022.

• Reported net income for the third quarter of 2023, excluding special items and mark-to-market fuel hedge accounting adjustments, of $237 million, or $1.83 per share, compared to $325 million, or $2.53 per share, for the third quarter of 2022.

• Recorded $2.8 billion in operating revenue.

• Reduced CASM excluding fuel and special items by 5% compared to the third quarter of 2022.

• Repurchased 248,988 shares of common stock for approximately $13 million, bringing total repurchases to $70 million for the nine months ended September 30, 2023.

• Generated $271 million in operating cash flow for the third quarter of 2023.

• Held $2.5 billion in unrestricted cash and marketable securities as of September 30, 2023.

• Ended the quarter with a debt-to-capitalization ratio of 48%, within the target range of 40% to 50%.

Operational Updates:

• Finished the third quarter with an industry-leading completion rate of 99.7%.

• Completed Alaska’s transition to an all-Boeing fleet with the retirement of its A321neo aircraft in September, and reached an agreement to sell the ten A321neos to American Airlines, with aircraft sales beginning in the fourth quarter of 2023.

• Received five 737-9 aircraft and two E175 aircraft during the quarter, bringing the totals in the Alaska and Horizon fleets to 56 and 41.

• Provided support and relief to the Maui community following the devastating August wildfires, bringing aid to the island and donating nearly 30 million miles to assist with ongoing efforts.

• Announced new nonstop daily service between San Diego and Atlanta, which will be the 37^th nonstop destination from San Diego and the most of any airline serving the airport.

• Launched the Mobile Verify program, providing guests with the ability to securely verify their passports before arriving to the airport for international travel.

• Announced establishment of the Airline Venture Lab with UP.Labs, a partnership designed to build startups aimed at solving strategic challenges facing the airline industry.

• Through Alaska Star Ventures, invested in Assaia, whose aim is to utilize artificial intelligence to optimize aircraft turn times and improve on-time performance.

• Launched a new partnership with Portland-based Stumptown Coffee Roasters to create a custom coffee blend which will be introduced on all flights by the end of 2023.

Awards and Recognition:

• Named for the third year in a row to Newsweek’s list of America’s Best Customer Service.

• Recognized by Forbes as one of America’s Best Employers for Women.

Tune in:

A conference call regarding the second quarter results will be streamed online at 8:30 a.m. PDT on July 25, 2023. It can be accessed at www.alaskaair.com/investors. For those unable to listen to the live broadcast, a replay will be available after the conclusion of the call.

Full earnings financial data:

Statistical data, reconciliations of the reported non-GAAP financial measures, further details regarding results and a glossary of financial terms can be found in our Earnings Release as filed with the SEC.