Productivity improves 6% and pilot training throughput doubles over prior year; 
Anticipate double-digit adjusted pre-tax margin in second quarter; 
Reiterated full-year adjusted pre-tax margin guidance of 9% to 12% 

Alaska Air Group (NYSE: ALK) today reported financial results for the first quarter ending March 31, 2023, and provided outlook for the second quarter ending June 30, 2023. 

This quarter we returned to pre-pandemic levels of flying and our roadmap to profitable growth is on track,” said Alaska CEO Ben Minicucci. “As we progress through the year, we have taken deliberate steps to build momentum and we are well prepared for peak summer flying. Thank you to our 23,000 employees who are the backbone of our success – I’m proud of their work to deliver operational excellence and show care for the people who fly with us each day. We are well-positioned to deliver on our full-year financial targets, including a 9% to 12% adjusted pretax margin.” 

Financial Highlights: 

• Reported net loss for the first quarter of 2023 under Generally Accepted Accounting Principles (GAAP) of $142 million, or $1.11 per share, compared to a net loss of $143 million, or $1.14 per share, for the first quarter of 2022. 
• Reported net loss for the first quarter of 2023, excluding special items and mark-to-market fuel hedge accounting adjustments, of $79 million, or $0.62 per share, compared to a net loss, excluding special items and mark-to-market fuel hedge accounting adjustments, of $167 million, or $1.33 per share, for the first quarter of 2022. 
• Resumed the share repurchase program, purchasing a total of 413,554 shares of common stock for approximately $18 million in the first quarter. The company continues to expect share repurchases of at least $100 million in 2023. 
• Held $2.4 billion in unrestricted cash and marketable securities as of March 31, 2023. 
• Ended the quarter with a debt-to-capitalization ratio of 48%, within the target range of 40% to 50%. 

Operational Updates: 

• Ratified a two-year contract extension with more than 2,300 McGee Air Services employees represented by the IAM. 
• Received six 737-9 aircraft during the quarter, bringing the 737-9 fleet count to 43. 
• Activated new benefits for Alaska Visa Signature® cardholders, including priority boarding, lounge membership discounts, new ways to earn bonus miles and other perks. New benefits and program changes drove cash remuneration under the co-brand credit card agreement up 17% on a year-over-year basis. 
• Announced plans to elevate guests’ regional flying experience with streaming-fast satellite Wi-Fi on E175 regional jets. 
• Announced three new daily nonstop flights from San Diego to Washington, D.C., Tampa and Eugene, beginning service later in 2023. 
• Doubled pilot training throughput compared to the same period in 2022, aided by a 75% increase in qualified flight instructors and an investment in two 737 full-flight simulators. Three additional 737 full-flight simulator deliveries are expected later this year. 
• Began lobby transformation projects to provide guests a more seamless travel experience; expect to roll out new bag tag stations and bag drop technology in key airports throughout 2023 and 2024. 
• Created a virtual reality 737 flight deck, in partnership with VRPilot, to better prepare pilots for their training experience. 

Environmental, Social and Governance Updates: 

• Announced an agreement with Shell Aviation to advance sustainable aviation fuel (SAF) technology and infrastructure throughout the West Coast; Shell Aviation will also supply Alaska with up to 10 million gallons of SAF in Los Angeles. 
• Launched a partnership with the Surfrider Foundation, an organization focused on protecting coastal habitats and reducing waste across the West Coast and throughout the Hawaiian Islands. 

Awards and Recognition: 

• Alaska’s Mileage Plan named Best Airline Rewards Program by NerdWallet for its customer-friendly policies, rewards and fee structures. 
• Alaska and Horizon earned the Diamond Award of Excellence from the Federal Aviation Administration, recognizing the airlines’ aircraft technicians for their dedication to training. 

Tune in:

A conference call regarding the first quarter results will be streamed online at 8:30 a.m. PDT on April 20, 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.