Generated record quarterly revenues of
$2.7 billion on improved operational
performance; flew record load factor of 88% reflecting
strong demand
SEATTLE, July 21,
2022 /PRNewswire/ -- Alaska Air Group (NYSE: ALK)
today announced another quarter of improvement in its financial
results for the second quarter ending June 30, 2022, and
provided outlook for the third quarter ending Sept. 30, 2022.
"It's clear that travel is one of the things people have missed
the most these past two years. They are excited to fly again and
our team is delivering on the safe, reliable and caring experience
they expect from us," said CEO Ben
Minicucci. "Revenue in June topped $1
billion, the highest single month in our history. Our 14%
adjusted pretax margin in Q2 is near the top of the industry, and
our operation is on track in June with the #1 on-time performance
and a schedule completion rate over 99%. I'm feeling so much
gratitude for the people of Alaska, Horizon and McGee for pulling
together. We have a strong platform for growth in 2023 and a lot to
be optimistic about."
Financial Results for the Second
Quarter:
- Reported net income for the second quarter of 2022 under
Generally Accepted Accounting Principles (GAAP) of $139 million, or $1.09 per share, compared to a net income of
$397 million, or $3.13 per share, in the second quarter of
2021.
- Reported net income for the second quarter of 2022, excluding
special items and mark-to-market fuel hedge accounting adjustments,
of $280 million, or $2.19 per share, compared to a net loss,
excluding special items and mark-to-market fuel hedge accounting
adjustments, of $38 million, or
$0.30 per share, in the second
quarter of 2021.
- Reported adjusted pretax margin for the second quarter of
14%.
- Recorded $2.7 billion in
operating revenues for the second quarter, the highest
revenue-generating quarter in company history.
Balance Sheet and
Liquidity:
- Generated $948 million in
operating cash flow for the second quarter, inclusive of
$231 million in net federal income
tax refunds.
- Held $3.4 billion in unrestricted
cash and marketable securities as of June
30, 2022.
- Maintained a debt-to-capitalization ratio of 50% as of
June 30, 2022, within our target
range of 40% to 50%.
Operational Updates and Milestones
for the Second Quarter:
- Flew a record load factor for the quarter of 88%, driven by
high demand on reduced capacity.
- Led the industry in on-time performance for the month of June,
meeting our commitment to operational reliability.
- Received nine Boeing 737-9 aircraft in the second quarter,
bringing the total number of 737-9s in our mainline fleet to
28.
- Ratified new contracts with Alaska Airlines dispatchers and
Horizon Air aircraft technicians and fleet service agents; and
reached a tentative agreement with Alaska Airlines IAM represented
employees.
- Expanded pilot training throughput by 20% from April, and added
100 active mainline pilots in the second quarter.
- Began nonstop service to Miami
and Cleveland from Seattle, bringing the total nonstop
destinations served from Seattle
to 100.
- Launched $8 flat rate satellite
Wi-Fi on mainline aircraft in partnership with Intelsat.
Awards and Employee
Recognition:
- Ranked as one of America's Best Employers for Diversity by
Forbes, recognizing our commitment to increasing diverse leadership
representation and equity initiatives.
- Named the Best Major Airline in North
America by the Airline Passenger Experience Association,
highlighting Alaska's inflight
experience.
- Recognized the company's workforce for their relentless
commitment to caring for our guests for 90 years by giving each
employee 90,000 miles redeemable for travel anywhere in the
world.
Second Quarter Environmental,
Social and Governance Updates:
- Released our 2021 Care Report, highlighting the company's
progress in various environmental, social and governance areas and
outlining ongoing initiatives and future goals.
- Signed agreement with Aemetis to purchase 13 million gallons of
sustainable aviation fuel to be delivered over the seven-year term
of the agreement.
- Subsequent to quarter end, announced a partnership with
Microsoft and Twelve, a carbon transformation technology company,
to advance the availability of sustainable aviation fuels.
- Scored 100% in our first year participating in Disability:IN's
Disability Equality Index, which benchmarks companies on their
disability inclusion and equality.
The following table reconciles the company's reported GAAP net
income (loss) per share (EPS) for the three and six months ended
June 30, 2022, and 2021 to adjusted amounts.
|
Three Months Ended
June 30,
|
|
2022
|
|
2021
|
(in millions,
except per-share amounts)
|
Dollars
|
|
Diluted
EPS
|
|
Dollars
|
|
Diluted
EPS
|
GAAP net income per
share
|
$
139
|
|
$
1.09
|
|
$
397
|
|
$
3.13
|
Payroll Support Program
grant wage offset
|
—
|
|
—
|
|
(503)
|
|
(3.97)
|
Mark-to-market fuel
hedge adjustments
|
40
|
|
0.31
|
|
(46)
|
|
(0.36)
|
Special items - fleet
transition and related charges(a)
|
146
|
|
1.14
|
|
(4)
|
|
(0.03)
|
Special items -
restructuring charges(b)
|
—
|
|
—
|
|
(23)
|
|
(0.18)
|
Income tax effect of
reconciling items above
|
(45)
|
|
(0.35)
|
|
141
|
|
1.11
|
Non-GAAP adjusted net
income (loss) per share
|
$
280
|
|
$
2.19
|
|
$
(38)
|
|
$
(0.30)
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
(in millions,
except per-share amounts)
|
Dollars
|
|
Diluted
EPS
|
|
Dollars
|
|
Diluted
EPS
|
GAAP net income (loss)
per share
|
$
(4)
|
|
$
(0.03)
|
|
$
266
|
|
$
2.10
|
Payroll support program
grant wage offset
|
—
|
|
—
|
|
(914)
|
|
(7.23)
|
Mark-to-market fuel
hedge adjustments
|
(67)
|
|
(0.53)
|
|
(68)
|
|
(0.54)
|
Special items - fleet
transition and related charges(a)
|
221
|
|
1.75
|
|
14
|
|
0.11
|
Special items -
restructuring charges(b)
|
—
|
|
—
|
|
(12)
|
|
(0.09)
|
Income tax effect of
reconciling items above
|
(37)
|
|
(0.30)
|
|
240
|
|
1.90
|
Non-GAAP adjusted net
income (loss) per share
|
$
113
|
|
$
0.89
|
|
$
(474)
|
|
$
(3.75)
|
|
|
(a)
|
Special items - fleet
transition and related charges in the three and six months ended
June 30, 2022 are primarily for impairment charges and accelerated
costs associated with the retirement of the A320 and Q400 fleets.
The A320 fleet is expected to be retired from operating service by
the end of 2022; the Q400 fleet is expected to be retired from
operating service in early 2023.
|
|
|
(b)
|
Special items -
restructuring charges in the three and six months ended June 30,
2021 are related to the estimated costs for pilot incentive
leaves.
|
Statistical data, as well as a reconciliation of the reported
non-GAAP financial measures, can be found in the accompanying
tables. A glossary of financial terms can be found on the last page
of this release.
Alaska will hold its quarterly
conference call to discuss second quarter results at 8:30 a.m. PDT on July 21, 2022. A webcast of
the call is available to the public at www.alaskaair.com/investors.
For those unable to listen to the live broadcast, a replay will be
available after the call.
Third Quarter and Full Year 2022 Outlook
|
|
Q3
Expectation(a)
|
Capacity (ASMs) %
change versus 2019(a)
|
|
Down 5% to
8%
|
Revenue passengers %
change versus 2019(a)
|
|
Down 8% to
10%
|
Passenger load
factor
|
|
85% to 88%
|
Total revenue % change
versus 2019(a)
|
|
Up 16% to
19%
|
Cost per ASM excluding
fuel and special items (CASMex) % change versus
2019(a)
|
|
Up 16% to
19%
|
Economic fuel cost per
gallon
|
|
$3.79 to
$3.89
|
Non-operating
expense
|
|
$2 million to $4
million
|
Adjusted tax
rate
|
|
24% to 25%
|
|
|
(a)
|
Due to the unusual
nature of 2021 and 2020, all 2022 comparisons are versus the third
quarter of 2019.
|
For full year 2022, we expect our capacity to be down 8% to 9%
versus 2019, and expect our CASMex to be up 15% to 17% versus 2019.
We continue to expect our full year adjusted pre-tax margin to be
between 6% and 9%.
References in this update to "Air Group," "Company," "we," "us,"
and "our" refer to Alaska Air Group, Inc. and its subsidiaries,
unless otherwise specified.
This news release may contain forward-looking statements subject
to the safe harbor protection provided by Section 27A of the
Securities Act of 1933, Section 21E of the Securities Exchange Act
of 1934, and the Private Securities Litigation Reform Act of 1995.
These statements relate to future events and involve known and
unknown risks and uncertainties that may cause actual outcomes to
be materially different from those indicated by our forward-looking
statements, assumptions or beliefs. For a comprehensive discussion
of potential risk factors, see Item 1A of the Company's Annual
Report on Form 10-K for the year ended December 31, 2021. Some of these risks include
competition, labor costs, relations and availability, general
economic conditions including those associated with pandemic
recovery, increases in operating costs including fuel, inability to
meet cost reduction, ESG and other strategic goals, seasonal
fluctuations in demand and financial results, supply chain risks,
events that negatively impact aviation safety and security, and
changes in laws and regulations that impact our business. All of
the forward-looking statements are qualified in their entirety by
reference to the risk factors discussed in our most recent Form
10-K and in our subsequent SEC filings. We operate in a continually
changing business environment, and new risk factors emerge from
time to time. Management cannot predict such new risk factors, nor
can it assess the impact, if any, of such new risk factors on our
business or events described in any forward-looking statements. We
expressly disclaim any obligation to publicly update or revise any
forward-looking statements made today to conform them to actual
results. Over time, our actual results, performance or achievements
may differ from the anticipated results, performance or
achievements that are expressed or implied by our forward-looking
statements, assumptions or beliefs and such differences might be
significant and materially adverse.
Alaska Airlines and our regional partners serve more than 120
destinations across the United
States, Belize,
Canada, Costa Rica and Mexico. We emphasize Next-Level Care for our
guests, along with providing low fares, award-winning customer
service and sustainability efforts. Alaska is a member of the oneworld global
alliance. With the alliance and our additional airline partners,
guests can travel to more than 1,000 destinations on more than 20
airlines while earning and redeeming miles on flights to locations
around the world. Learn more about Alaska at news.alaskair.com. Alaska Airlines
and Horizon Air are subsidiaries of Alaska Air Group (NYSE:
ALK).
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
(in millions,
except per share amounts)
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenue
|
$
2,418
|
|
$
1,352
|
|
79 %
|
|
$
3,929
|
|
$
2,011
|
|
95 %
|
Mileage Plan other
revenue
|
175
|
|
118
|
|
48 %
|
|
287
|
|
212
|
|
35 %
|
Cargo and
other
|
65
|
|
57
|
|
14 %
|
|
123
|
|
101
|
|
22 %
|
Total Operating
Revenues
|
2,658
|
|
1,527
|
|
74 %
|
|
4,339
|
|
2,324
|
|
87 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Wages and
benefits
|
639
|
|
510
|
|
25 %
|
|
1,245
|
|
1,003
|
|
24 %
|
Variable incentive
pay
|
56
|
|
34
|
|
65 %
|
|
92
|
|
67
|
|
37 %
|
Payroll Support Program
grant wage offset
|
—
|
|
(503)
|
|
NM
|
|
—
|
|
(914)
|
|
NM
|
Aircraft fuel,
including hedging gains and losses
|
776
|
|
274
|
|
183 %
|
|
1,123
|
|
477
|
|
135 %
|
Aircraft
maintenance
|
104
|
|
102
|
|
2 %
|
|
239
|
|
183
|
|
31 %
|
Aircraft
rent
|
73
|
|
62
|
|
18 %
|
|
146
|
|
124
|
|
18 %
|
Landing fees and other
rentals
|
136
|
|
144
|
|
(6) %
|
|
274
|
|
273
|
|
— %
|
Contracted
services
|
82
|
|
54
|
|
52 %
|
|
160
|
|
105
|
|
52 %
|
Selling
expenses
|
78
|
|
41
|
|
90 %
|
|
136
|
|
74
|
|
84 %
|
Depreciation and
amortization
|
104
|
|
98
|
|
6 %
|
|
206
|
|
195
|
|
6 %
|
Food and beverage
service
|
50
|
|
35
|
|
43 %
|
|
91
|
|
58
|
|
57 %
|
Third-party regional
carrier expense
|
50
|
|
37
|
|
35 %
|
|
92
|
|
67
|
|
37 %
|
Other
|
177
|
|
117
|
|
51 %
|
|
329
|
|
222
|
|
48 %
|
Special items - fleet
transition and related charges
|
146
|
|
(4)
|
|
NM
|
|
221
|
|
14
|
|
NM
|
Special items -
restructuring charges
|
—
|
|
(23)
|
.
|
NM
|
|
—
|
|
(12)
|
|
NM
|
Total Operating
Expenses
|
2,471
|
|
978
|
|
153 %
|
|
4,354
|
|
1,936
|
|
125 %
|
Operating Income
(Loss)
|
187
|
|
549
|
|
(66) %
|
|
(15)
|
|
388
|
|
(104) %
|
Non-operating Income
(Expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
11
|
|
6
|
|
100 %
|
|
18
|
|
13
|
|
38 %
|
Interest
expense
|
(26)
|
|
(39)
|
|
(33) %
|
|
(53)
|
|
(71)
|
|
(25) %
|
Interest
capitalized
|
3
|
|
3
|
|
7 %
|
|
5
|
|
6
|
|
(17) %
|
Other - net
|
10
|
|
9
|
|
10 %
|
|
24
|
|
19
|
|
25 %
|
Total Non-operating
Income (Expense)
|
(2)
|
|
(21)
|
|
(90) %
|
|
(6)
|
|
(33)
|
|
(82) %
|
Income (Loss) Before
Income Tax
|
185
|
|
528
|
|
|
|
(21)
|
|
355
|
|
|
Income tax expense
(benefit)
|
46
|
|
131
|
|
|
|
(17)
|
|
89
|
|
|
Net Income
(Loss)
|
$
139
|
|
$
397
|
|
|
|
$
(4)
|
|
$
266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings
(Loss) Per Share
|
$
1.10
|
|
$
3.18
|
|
|
|
$
(0.03)
|
|
$
2.13
|
|
|
Diluted Earnings
(Loss) Per Share
|
$
1.09
|
|
$
3.13
|
|
|
|
$
(0.03)
|
|
$
2.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used for
computation:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
126.543
|
|
124.977
|
|
|
|
126.265
|
|
124.640
|
|
|
Diluted
|
127.795
|
|
126.825
|
|
|
|
126.265
|
|
126.388
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
|
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
(in
millions)
|
June 30,
2022
|
|
December 31,
2021
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
778
|
|
$
470
|
Marketable
securities
|
2,647
|
|
2,646
|
Total cash
and marketable securities
|
3,425
|
|
3,116
|
Receivables -
net
|
401
|
|
546
|
Inventories and
supplies - net
|
93
|
|
62
|
Prepaid expenses and
other current assets
|
313
|
|
196
|
Total Current
Assets
|
4,232
|
|
3,920
|
|
|
|
|
Property and
Equipment
|
|
|
|
Aircraft and other
flight equipment
|
8,569
|
|
8,127
|
Other property and
equipment
|
1,532
|
|
1,489
|
Deposits for future
flight equipment
|
292
|
|
384
|
|
10,393
|
|
10,000
|
Less accumulated
depreciation and amortization
|
3,922
|
|
3,862
|
Total Property and
Equipment - Net
|
6,471
|
|
6,138
|
|
|
|
|
Other
Assets
|
|
|
|
Operating lease
assets
|
1,669
|
|
1,453
|
Goodwill and intangible
assets
|
2,041
|
|
2,044
|
Other noncurrent
assets
|
387
|
|
396
|
Other
Assets
|
4,097
|
|
3,893
|
|
|
|
|
Total
Assets
|
$
14,800
|
|
$
13,951
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
|
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
(in millions,
except share amounts)
|
June 30,
2022
|
|
December 31,
2021
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts
payable
|
$
286
|
|
$
200
|
Accrued wages, vacation
and payroll taxes
|
416
|
|
457
|
Air traffic
liability
|
1,778
|
|
1,163
|
Other accrued
liabilities
|
794
|
|
625
|
Deferred
revenue
|
1,012
|
|
912
|
Current portion of
operating lease liabilities
|
274
|
|
268
|
Current portion of
long-term debt
|
342
|
|
366
|
Total Current
Liabilities
|
4,902
|
|
3,991
|
|
|
|
|
Long-Term Debt, Net
of Current Portion
|
1,961
|
|
2,173
|
|
|
|
|
Noncurrent
Liabilities
|
|
|
|
Long-term operating
lease liabilities, net of current portion
|
1,505
|
|
1,279
|
Deferred income
taxes
|
552
|
|
578
|
Deferred
revenue
|
1,429
|
|
1,446
|
Obligation for pension
and postretirement medical benefits
|
299
|
|
305
|
Other
liabilities
|
353
|
|
378
|
Total Noncurrent
Liabilities
|
4,138
|
|
3,986
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
Shareholders'
Equity
|
|
|
|
Preferred stock, $0.01
par value, Authorized: 5,000,000 shares, none issued or
outstanding
|
—
|
|
—
|
Common stock, $0.01
par value, Authorized: 400,000,000 shares, Issued: 2022 -
136,109,649 shares; 2021 - 135,255,808 shares, Outstanding: 2022 -
126,759,705 shares; 2021 - 125,905,864 shares
|
1
|
|
1
|
Capital in excess of
par value
|
542
|
|
494
|
Treasury stock
(common), at cost: 2022 - 9,349,944 shares; 2021 - 9,349,944
shares
|
(674)
|
|
(674)
|
Accumulated other
comprehensive loss
|
(308)
|
|
(262)
|
Retained
earnings
|
4,238
|
|
4,242
|
|
3,799
|
|
3,801
|
Total Liabilities
and Shareholders' Equity
|
$
14,800
|
|
$
13,951
|
SUMMARY CASH FLOW
(unaudited)
|
|
|
|
|
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
(in
millions)
|
Six Months
Ended
June 30,
2022
|
|
Three Months
Ended
March 31,
2022(a)
|
|
Three Months
Ended
June 30,
2022(b)
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
Net income
(loss)
|
$
(4)
|
|
$
(143)
|
|
$
139
|
Non-cash reconciling
items
|
447
|
|
182
|
|
265
|
Changes in working
capital
|
792
|
|
248
|
|
544
|
Net cash provided by
(used in) operating activities
|
1,235
|
|
287
|
|
948
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
Property and equipment
additions
|
(632)
|
|
(288)
|
|
(344)
|
Other investing
activities
|
(89)
|
|
327
|
|
(416)
|
Net cash provided by
(used in) investing activities
|
(721)
|
|
39
|
|
(760)
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
(206)
|
|
(168)
|
|
(38)
|
|
|
|
|
|
|
Net increase (decrease)
in cash and cash equivalents
|
308
|
|
158
|
|
150
|
Cash, cash equivalents,
and restricted cash at beginning of period
|
494
|
|
494
|
|
652
|
Cash, cash
equivalents, and restricted cash at end of the
period
|
$
802
|
|
$
652
|
|
$
802
|
|
|
(a)
|
As reported in Form
10-Q for the first quarter of 2022.
|
(b)
|
Cash flows for the
three months ended June 30, 2022, can be calculated by subtracting
cash flows for the three months ended March 31,
2022, as reported in Form 10-Q for the first quarter 2022, from the
six months ended June 30, 2022.
|
|
|
OPERATING STATISTICS
SUMMARY (unaudited)
|
|
|
|
|
|
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
Consolidated
Operating Statistics:(a)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue passengers
(000)
|
11,005
|
|
8,712
|
|
26.3 %
|
|
19,700
|
|
13,379
|
|
47.2 %
|
RPMs (000,000)
"traffic"
|
13,746
|
|
10,334
|
|
33.0 %
|
|
24,332
|
|
15,727
|
|
54.7 %
|
ASMs (000,000)
"capacity"
|
15,611
|
|
13,413
|
|
16.4 %
|
|
29,394
|
|
23,810
|
|
23.5 %
|
Load factor
|
88.1 %
|
|
77.0 %
|
|
11.1 pts
|
|
82.8 %
|
|
66.1 %
|
|
16.7 pts
|
Yield
|
17.59¢
|
|
13.09¢
|
|
34.4 %
|
|
16.15¢
|
|
12.79¢
|
|
26.3 %
|
RASM
|
17.03¢
|
|
11.38¢
|
|
49.6 %
|
|
14.76¢
|
|
9.76¢
|
|
51.2 %
|
CASMex(b)
|
9.92¢
|
|
9.20¢
|
|
7.8 %
|
|
10.24¢
|
|
9.95¢
|
|
2.9 %
|
Economic fuel cost per
gallon(b)
|
$3.76
|
|
$1.90
|
|
97.9 %
|
|
$3.23
|
|
$1.85
|
|
74.6 %
|
Fuel gallons
(000,000)
|
196
|
|
168
|
|
16.7 %
|
|
368
|
|
294
|
|
25.2 %
|
ASMs per
gallon
|
79.6
|
|
79.8
|
|
(0.3) %
|
|
79.9
|
|
81.0
|
|
(1.4) %
|
Average full-time
equivalent employees (FTEs)
|
22,603
|
|
19,001
|
|
19.0 %
|
|
22,092
|
|
18,071
|
|
22.3 %
|
Mainline Operating
Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
Revenue passengers
(000)
|
8,321
|
|
6,151
|
|
35.3 %
|
|
14,887
|
|
9,302
|
|
60.0 %
|
RPMs (000,000)
"traffic"
|
12,460
|
|
8,966
|
|
39.0 %
|
|
21,972
|
|
13,555
|
|
62.1 %
|
ASMs (000,000)
"capacity"
|
14,052
|
|
11,611
|
|
21.0 %
|
|
26,439
|
|
20,464
|
|
29.2 %
|
Load factor
|
88.7 %
|
|
77.2 %
|
|
11.5 pts
|
|
83.1 %
|
|
66.2 %
|
|
16.9 pts
|
Yield
|
16.28¢
|
|
11.96¢
|
|
36.1 %
|
|
14.89¢
|
|
11.64¢
|
|
27.9 %
|
RASM
|
16.02¢
|
|
10.59¢
|
|
51.3 %
|
|
13.81¢
|
|
9.09¢
|
|
51.9 %
|
CASMex(b)
|
8.98¢
|
|
8.48¢
|
|
5.9 %
|
|
9.29¢
|
|
9.17¢
|
|
1.3 %
|
Economic fuel cost per
gallon(b)
|
$3.74
|
|
$1.88
|
|
98.9 %
|
|
$3.21
|
|
$1.84
|
|
74.4 %
|
Fuel gallons
(000,000)
|
165
|
|
135
|
|
22.2 %
|
|
311
|
|
233
|
|
33.5 %
|
ASMs per
gallon
|
85.2
|
|
86.0
|
|
(0.9) %
|
|
85.0
|
|
87.8
|
|
(3.2) %
|
Average number of
FTEs
|
17,315
|
|
14,021
|
|
23.5 %
|
|
16,825
|
|
13,247
|
|
27.0 %
|
Aircraft
utilization
|
10.1
|
|
9.9
|
|
2.0 %
|
|
9.8
|
|
9.2
|
|
6.5 %
|
Average aircraft stage
length
|
1,363
|
|
1,320
|
|
3.3 %
|
|
1,349
|
|
1,313
|
|
2.7 %
|
Operating
fleet(d)
|
233
|
|
202
|
|
31 a/c
|
|
233
|
|
202
|
|
31 a/c
|
Regional Operating
Statistics:(c)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue passengers
(000)
|
2,685
|
|
2,562
|
|
4.8 %
|
|
4,813
|
|
4,077
|
|
18.1 %
|
RPMs (000,000)
"traffic"
|
1,285
|
|
1,367
|
|
(6.0) %
|
|
2,360
|
|
2,172
|
|
8.7 %
|
ASMs (000,000)
"capacity"
|
1,559
|
|
1,802
|
|
(13.5) %
|
|
2,955
|
|
3,346
|
|
(11.7) %
|
Load factor
|
82.4 %
|
|
75.9 %
|
|
6.5 pts
|
|
79.9 %
|
|
64.9 %
|
|
15.0 pts
|
Yield
|
30.35¢
|
|
20.48¢
|
|
48.2 %
|
|
27.88¢
|
|
19.95¢
|
|
39.7 %
|
RASM
|
26.04¢
|
|
16.41¢
|
|
58.7 %
|
|
23.21¢
|
|
13.84¢
|
|
67.7 %
|
Operating
fleet(d)
|
104
|
|
94
|
|
10 a/c
|
|
104
|
|
94
|
|
10 a/c
|
|
|
(a)
|
Except for FTEs, data
includes information related to third-party regional capacity
purchase flying arrangements.
|
(b)
|
See a reconciliation of
this non-GAAP measure and Note A for a discussion of the importance
of this measure to investors in the accompanying pages.
|
(c)
|
Data presented includes
information for flights operated by Horizon and third-party
carriers.
|
(d)
|
Excludes all aircraft
removed from operating service.
|
Given the unusual nature of 2021 and 2020, we believe that some
analysis of specific financial and operational results compared to
2019 provides meaningful insight. The table below includes
comparative results from 2022 to 2019.
FINANCIAL
INFORMATION AND OPERATING STATISTICS - 2022 Compared to 2019
(unaudited)
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2019
|
|
Change
|
|
2022
|
|
2019
|
|
Change
|
Passenger
revenue
|
$
2,418
|
|
$
2,111
|
|
15 %
|
|
$
3,929
|
|
$
3,827
|
|
3 %
|
Mileage plan other
revenue
|
175
|
|
118
|
|
48 %
|
|
287
|
|
228
|
|
26 %
|
Cargo and
other
|
65
|
|
59
|
|
10 %
|
|
123
|
|
109
|
|
13 %
|
Total Operating
Revenues
|
2,658
|
|
2,288
|
|
16 %
|
|
4,339
|
|
4,164
|
|
4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding fuel and special items
|
1,549
|
|
1,414
|
|
10 %
|
|
3,010
|
|
2,819
|
|
7 %
|
Aircraft fuel,
including hedging gains and losses
|
776
|
|
502
|
|
55 %
|
|
1,123
|
|
922
|
|
22 %
|
Special
items
|
146
|
|
8
|
|
NM
|
|
221
|
|
34
|
|
NM
|
Total Operating
Expenses
|
2,471
|
|
1,924
|
|
28 %
|
|
4,354
|
|
3,775
|
|
15 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-operating
Expense
|
(2)
|
|
(13)
|
|
(85) %
|
|
(6)
|
|
(32)
|
|
(81) %
|
Income (Loss) Before
Income Tax
|
$
185
|
|
$
351
|
|
(47) %
|
|
$
(21)
|
|
$
357
|
|
(106) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Operating Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
Revenue passengers
(000)
|
11,005
|
|
12,026
|
|
(8) %
|
|
19,700
|
|
22,442
|
|
(12) %
|
RPMs (000,000)
"traffic"
|
13,746
|
|
14,638
|
|
(6) %
|
|
24,332
|
|
27,087
|
|
(10) %
|
ASMs (000,000)
"capacity"
|
15,611
|
|
16,980
|
|
(8) %
|
|
29,394
|
|
32,487
|
|
(10) %
|
Load Factor
|
88.1 %
|
|
86.2 %
|
|
1.9
pts
|
|
82.8 %
|
|
83.4 %
|
|
(0.6)
pts
|
Yield
|
17.59¢
|
|
14.43¢
|
|
22 %
|
|
16.15¢
|
|
14.13¢
|
|
14 %
|
RASM
|
17.03¢
|
|
13.48¢
|
|
26 %
|
|
14.76¢
|
|
12.82¢
|
|
15 %
|
CASMex
|
9.92¢
|
|
8.33¢
|
|
19 %
|
|
10.24¢
|
|
8.68¢
|
|
18 %
|
FTEs
|
22,603
|
|
21,921
|
|
3 %
|
|
22,092
|
|
21,876
|
|
1 %
|
OPERATING SEGMENTS
(unaudited)
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2022
|
(in
millions)
|
Mainline
|
|
Regional
|
|
Horizon
|
|
Consolidating
& Other(a)
|
|
Air Group
Adjusted(b)
|
|
Special
Items(c)
|
|
Consolidated
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenues
|
$ 2,028
|
|
$
390
|
|
$
—
|
|
$
—
|
|
$ 2,418
|
|
$
—
|
|
$
2,418
|
CPA revenues
|
—
|
|
—
|
|
101
|
|
(101)
|
|
—
|
|
—
|
|
—
|
Mileage Plan other
revenue
|
159
|
|
16
|
|
—
|
|
—
|
|
175
|
|
—
|
|
175
|
Cargo and
other
|
64
|
|
—
|
|
—
|
|
1
|
|
65
|
|
—
|
|
65
|
Total Operating
Revenues
|
2,251
|
|
406
|
|
101
|
|
(100)
|
|
2,658
|
|
—
|
|
2,658
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding fuel
|
1,262
|
|
289
|
|
98
|
|
(100)
|
|
1,549
|
|
146
|
|
1,695
|
Fuel expense
|
617
|
|
119
|
|
—
|
|
—
|
|
736
|
|
40
|
|
776
|
Total Operating
Expenses
|
1,879
|
|
408
|
|
98
|
|
(100)
|
|
2,285
|
|
186
|
|
2,471
|
Non-operating Income
(Expense)
|
3
|
|
—
|
|
(5)
|
|
—
|
|
(2)
|
|
—
|
|
(2)
|
Income (Loss) Before
Income Tax
|
$
375
|
|
$
(2)
|
|
$
(2)
|
|
$
—
|
|
$
371
|
|
$
(186)
|
|
$
185
|
Pretax
Margin
|
|
|
|
|
|
|
|
|
14.0 %
|
|
|
|
7.0 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, 2021
|
(in
millions)
|
Mainline
|
|
Regional
|
|
Horizon
|
|
Consolidating
& Other(a)
|
|
Air Group
Adjusted(b)
|
|
Special
Items(c)
|
|
Consolidated
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenues
|
$ 1,072
|
|
$
280
|
|
$
—
|
|
$
—
|
|
$ 1,352
|
|
$
—
|
|
$
1,352
|
CPA revenues
|
—
|
|
—
|
|
111
|
|
(111)
|
|
—
|
|
—
|
|
—
|
Mileage Plan other
revenue
|
102
|
|
16
|
|
—
|
|
—
|
|
118
|
|
—
|
|
118
|
Cargo and
other
|
55
|
|
—
|
|
—
|
|
2
|
|
57
|
|
—
|
|
57
|
Total Operating
Revenues
|
1,229
|
|
296
|
|
111
|
|
(109)
|
|
1,527
|
|
—
|
|
1,527
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding fuel
|
984
|
|
286
|
|
91
|
|
(127)
|
|
1,234
|
|
(530)
|
|
704
|
Fuel expense
|
253
|
|
66
|
|
—
|
|
1
|
|
320
|
|
(46)
|
|
274
|
Total Operating
Expenses
|
1,237
|
|
352
|
|
91
|
|
(126)
|
|
1,554
|
|
(576)
|
|
978
|
Non-operating Income
(Expense)
|
(16)
|
|
—
|
|
(5)
|
|
—
|
|
(21)
|
|
—
|
|
(21)
|
Income (Loss) Before
Income Tax
|
$
(24)
|
|
$
(56)
|
|
$
15
|
|
$
17
|
|
$
(48)
|
|
$
576
|
|
$
528
|
Pretax
Margin
|
|
|
|
|
|
|
|
|
(3.1) %
|
|
|
|
34.6 %
|
|
|
Six Months Ended
June 30, 2022
|
(in
millions)
|
Mainline
|
|
Regional
|
|
Horizon
|
|
Consolidating
& Other(a)
|
|
Air Group
Adjusted(b)
|
|
Special
Items(c)
|
|
Consolidated
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenues
|
$ 3,271
|
|
$
658
|
|
$
—
|
|
$
—
|
|
$
3,929
|
|
$
—
|
|
$
3,929
|
CPA revenues
|
—
|
|
—
|
|
195
|
|
(195)
|
|
—
|
|
—
|
|
—
|
Mileage Plan other
revenue
|
259
|
|
28
|
|
—
|
|
—
|
|
287
|
|
—
|
|
287
|
Cargo and
other
|
121
|
|
—
|
|
—
|
|
2
|
|
123
|
|
—
|
|
123
|
Total Operating
Revenues
|
3,651
|
|
686
|
|
195
|
|
(193)
|
|
4,339
|
|
—
|
|
4,339
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding fuel
|
2,456
|
|
551
|
|
197
|
|
(194)
|
|
3,010
|
|
221
|
|
3,231
|
Fuel expense
|
998
|
|
192
|
|
—
|
|
—
|
|
1,190
|
|
(67)
|
|
1,123
|
Total Operating
Expenses
|
3,454
|
|
743
|
|
197
|
|
(194)
|
|
4,200
|
|
154
|
|
4,354
|
Non-operating Income
(Expense)
|
4
|
|
—
|
|
(10)
|
|
—
|
|
(6)
|
|
—
|
|
(6)
|
Income (Loss) Before
Income Tax
|
$
201
|
|
$
(57)
|
|
$
(12)
|
|
$
1
|
|
$ 133
|
|
$
(154)
|
|
$
(21)
|
Pretax
Margin
|
|
|
|
|
|
|
|
|
3.1 %
|
|
|
|
(0.5) %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30, 2021
|
(in
millions)
|
Mainline
|
|
Regional
|
|
Horizon
|
|
Consolidating
& Other(a)
|
|
Air Group
Adjusted(b)
|
|
Special
Items(c)
|
|
Consolidated
|
Operating
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenues
|
$ 1,578
|
|
$
433
|
|
$
—
|
|
$
—
|
|
$
2,011
|
|
$
—
|
|
$
2,011
|
CPA revenues
|
—
|
|
—
|
|
215
|
|
(215)
|
|
—
|
|
—
|
|
—
|
Mileage Plan other
revenue
|
182
|
|
30
|
|
—
|
|
—
|
|
212
|
|
—
|
|
212
|
Cargo and
other
|
99
|
|
—
|
|
—
|
|
2
|
|
101
|
|
—
|
|
101
|
Total Operating
Revenues
|
1,859
|
|
463
|
|
215
|
|
(213)
|
|
2,324
|
|
—
|
|
2,324
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding fuel
|
1,877
|
|
551
|
|
179
|
|
(236)
|
|
2,371
|
|
(912)
|
|
1,459
|
Fuel expense
|
427
|
|
118
|
|
—
|
|
—
|
|
545
|
|
(68)
|
|
477
|
Total Operating
Expenses
|
2,304
|
|
669
|
|
179
|
|
(236)
|
|
2,916
|
|
(980)
|
|
1,936
|
Non-operating Income
(Expense)
|
(23)
|
|
—
|
|
(10)
|
|
—
|
|
(33)
|
|
—
|
|
(33)
|
Income (Loss) Before
Income Tax
|
$
(468)
|
|
$
(206)
|
|
$
26
|
|
$
23
|
|
$ (625)
|
|
$
980
|
|
$
355
|
Pretax
Margin
|
|
|
|
|
|
|
|
|
(26.9) %
|
|
|
|
15.3 %
|
|
|
(a)
|
Includes consolidating
entries, Air Group parent company, McGee Air Services, and other
immaterial business units.
|
(b)
|
The Air Group Adjusted
column represents the financial information that is reviewed by
management to assess performance of operations
and determine capital allocation and excludes certain charges. See
Note A in the accompanying pages for further
information.
|
(c)
|
Includes payroll
support program grant wage offsets, special items, and
mark-to-market fuel hedge accounting adjustments.
|
GAAP TO NON-GAAP
RECONCILIATIONS (unaudited)
|
|
|
|
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
CASM Excluding Fuel
and Special Items Reconciliation
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
(in
cents)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Consolidated:
|
|
|
|
|
|
|
|
CASM
|
15.84 ¢
|
|
7.29 ¢
|
|
14.81 ¢
|
|
8.13 ¢
|
Less the following
components:
|
|
|
|
|
|
|
|
Payroll Support
Program grant wage offset
|
—
|
|
(3.75)
|
|
—
|
|
(3.84)
|
Aircraft fuel,
including hedging gains and losses
|
4.98
|
|
2.04
|
|
3.82
|
|
2.00
|
Special items - fleet
transition and related charges(a)
|
0.94
|
|
(0.03)
|
|
0.75
|
|
0.07
|
Special items -
restructuring charges(b)
|
—
|
|
(0.17)
|
|
—
|
|
(0.05)
|
CASM excluding fuel
and special items
|
9.92 ¢
|
|
9.20 ¢
|
|
10.24 ¢
|
|
9.95 ¢
|
|
|
|
|
|
|
|
|
Mainline:
|
|
|
|
|
|
|
|
CASM
|
15.06 ¢
|
|
6.24 ¢
|
|
13.69 ¢
|
|
6.72 ¢
|
Less the following
components:
|
|
|
|
|
|
|
|
Payroll Support
Program grant wage offset
|
—
|
|
(3.79)
|
|
—
|
|
(4.21)
|
Aircraft fuel,
including hedging gains and losses
|
5.06
|
|
1.78
|
|
3.84
|
|
1.75
|
Special items - fleet
transition and related charges(a)
|
1.02
|
|
(0.03)
|
|
0.56
|
|
0.07
|
Special items -
restructuring charges(b)
|
—
|
|
(0.20)
|
|
—
|
|
(0.06)
|
CASM excluding fuel
and special items
|
8.98 ¢
|
|
8.48 ¢
|
|
9.29 ¢
|
|
9.17 ¢
|
|
|
(a)
|
Special items - fleet
transition and related charges in the three and six months ended
June 30, 2022 are primarily for impairment charges and accelerated
costs associated with the retirement of the A320 and Q400 fleets.
The A320 fleet is expected to be retired from operating service by
the end of 2022; the Q400 fleet is expected to be retired from
operating service in early 2023.
|
(b)
|
Special items -
restructuring charges in the three and six months ended June 30,
2021 are related to the estimated costs for pilot incentive
leaves.
|
Fuel
Reconciliation
|
|
Three Months Ended
June 30,
|
|
2022
|
|
2021
|
(in millions,
except for per-gallon amounts)
|
Dollars
|
|
Cost/Gallon
|
|
Dollars
|
|
Cost/Gallon
|
Raw or "into-plane"
fuel cost
|
$
824
|
|
$
4.20
|
|
$
330
|
|
$
1.96
|
Losses (gains) on
settled hedges
|
(88)
|
|
(0.44)
|
|
(10)
|
|
(0.06)
|
Consolidated
economic fuel expense
|
736
|
|
3.76
|
|
320
|
|
1.90
|
Mark-to-market fuel
hedge adjustment
|
40
|
|
0.20
|
|
(46)
|
|
(0.27)
|
GAAP fuel
expense
|
$
776
|
|
$
3.96
|
|
$
274
|
|
$
1.63
|
Fuel gallons
|
|
|
196
|
|
|
|
168
|
|
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
2022
|
|
2021
|
(in millions,
except for per gallon amounts)
|
Dollars
|
|
Cost/Gallon
|
|
Dollars
|
|
Cost/Gallon
|
Raw or "into-plane"
fuel cost
|
$
1,328
|
|
$
3.61
|
|
$
552
|
|
$
1.87
|
Losses (gains) on
settled hedges
|
(138)
|
|
(0.38)
|
|
(7)
|
|
(0.02)
|
Consolidated
economic fuel expense
|
1,190
|
|
3.23
|
|
545
|
|
1.85
|
Mark-to-market fuel
hedge adjustment
|
(67)
|
|
(0.18)
|
|
(68)
|
|
(0.23)
|
GAAP fuel
expense
|
$
1,123
|
|
$
3.05
|
|
$
477
|
|
$
1.62
|
Fuel gallons
|
|
|
368
|
|
|
|
294
|
Debt-to-capitalization, including operating
leases
|
(in
millions)
|
June 30,
2022
|
|
December 31,
2021
|
Long-term debt, net of
current portion
|
$
1,961
|
|
$
2,173
|
Long-term and current
capitalized operating leases
|
1,779
|
|
1,547
|
Adjusted debt, net of
current portion of long-term debt
|
3,740
|
|
3,720
|
Shareholders'
equity
|
3,799
|
|
3,801
|
Total Invested
Capital
|
$
7,539
|
|
$
7,521
|
|
|
|
|
Debt-to-capitalization
ratio, including operating leases
|
50 %
|
|
49 %
|
Adjusted net debt to
earnings before interest, taxes, depreciation, amortization, rent
and special items
|
(in
millions)
|
June 30,
2022
|
|
December 31,
2021
|
Current portion of
long-term debt
|
$
342
|
|
$
366
|
Current portion of
operating lease liabilities
|
274
|
|
268
|
Long-term
debt
|
1,961
|
|
2,173
|
Long-term operating
lease liabilities, net of current portion
|
1,505
|
|
1,279
|
Total adjusted
debt
|
4,082
|
|
4,086
|
Less: Total cash and
marketable securities
|
(3,425)
|
|
(3,116)
|
Adjusted net
debt
|
$
657
|
|
$
970
|
|
|
|
|
(in
millions)
|
Twelve Months
Ended
June 30, 2022
|
|
Twelve Months
Ended
December 31, 2021
|
GAAP Operating
Income(a)
|
$
282
|
|
$
685
|
Adjusted
for:
|
|
|
|
Payroll Support
Program grant wage offset and special items
|
208
|
|
(925)
|
Mark-to-market fuel
hedge adjustments
|
(46)
|
|
(47)
|
Depreciation and
amortization
|
405
|
|
394
|
Aircraft
rent
|
276
|
|
254
|
EBITDAR
|
$
1,125
|
|
$
361
|
Adjusted net debt to
EBITDAR
|
0.6x
|
|
2.7x
|
|
|
(a)
|
Operating income can be
reconciled using the trailing twelve month operating income as
filed quarterly with the SEC.
|
Note A: Pursuant to Regulation G, we are providing
reconciliations of reported non-GAAP financial measures to their
most directly comparable financial measures reported on a GAAP
basis. We believe that consideration of these non-GAAP financial
measures may be important to investors for the following
reasons:
- By eliminating fuel expense and certain special items
(including Payroll Support Program wage offset, fleet transition
and related charges, and restructuring charges) from our unit
metrics, we believe that we have better visibility into the results
of operations. Our industry is highly competitive and is
characterized by high fixed costs, so even a small reduction in
non-fuel operating costs can result in a significant improvement in
operating results. In addition, we believe that all domestic
carriers are similarly impacted by changes in jet fuel costs over
the long run, so it is important for management (and thus
investors) to understand the impact of (and trends in)
company-specific cost drivers such as labor rates and productivity,
airport costs, maintenance costs, etc., which are more controllable
by management.
- Cost per ASM (CASM) excluding fuel and certain special items,
such as Payroll Support Program wage offset, fleet transition and
related charges, and restructuring charges, is one of the most
important measures used by management and by the Air Group Board of
Directors in assessing quarterly and annual cost performance.
- Adjusted income before income tax (and other items as specified
in our plan documents) is an important metric for the employee
incentive plan, which covers the majority of Air Group
employees.
- CASM excluding fuel and certain special items is a measure
commonly used by industry analysts, and we believe it is the basis
by which they have historically compared our airline to others in
the industry. The measure is also the subject of frequent questions
from investors.
- Disclosure of the individual impact of certain noted items
provides investors the ability to measure and monitor performance
both with and without these special items. We believe that
disclosing the impact of these items as noted above. Industry
analysts and investors consistently measure our performance without
these items for better comparability between periods and among
other airlines.
- Although we disclose our passenger unit revenues, we do not
(nor are we able to) evaluate unit revenues excluding the impact
that changes in fuel costs have had on ticket prices. Fuel expense
represents a large percentage of our total operating expenses.
Fluctuations in fuel prices often drive changes in unit revenues in
the mid-to-long term. Although we believe it is useful to evaluate
non-fuel unit costs for the reasons noted above, we would caution
readers of these financial statements not to place undue reliance
on unit costs excluding fuel as a measure or predictor of future
profitability because of the significant impact of fuel costs on
our business.
GLOSSARY OF TERMS
Adjusted net debt - long-term debt, including current
portion, plus capitalized operating leases, less cash and
marketable securities
Adjusted net debt to EBITDAR - represents net
adjusted debt divided by EBITDAR (trailing twelve months earnings
before interest, taxes, depreciation, amortization, special items
and rent)
Aircraft Utilization - block hours per day; this
represents the average number of hours per day our aircraft are in
transit
Aircraft Stage Length - represents the average miles
flown per aircraft departure
ASMs - available seat miles, or "capacity";
represents total seats available across the fleet multiplied by the
number of miles flown
CASM - operating costs per ASM, or "unit cost";
represents all operating expenses including fuel and special
items
CASMex - operating costs excluding fuel and special
items per ASM; this metric is used to help track progress toward
reduction of non-fuel operating costs since fuel is largely out of
our control
Debt-to-capitalization ratio - represents adjusted
debt (long-term debt plus capitalized operating lease liabilities)
divided by total equity plus adjusted debt
Diluted Earnings per Share - represents earnings per
share (EPS) using fully diluted shares outstanding
Diluted Shares - represents the total number of shares
that would be outstanding if all possible sources of conversion,
such as stock options, were exercised
Economic Fuel - best estimate of the cash cost of
fuel, net of the impact of our fuel-hedging program
Load Factor - RPMs as a percentage of ASMs;
represents the number of available seats that were filled with
paying passengers
Mainline - represents flying Boeing 737, Airbus 320
and Airbus 321neo family jets and all associated revenues and
costs
Productivity - number of revenue passengers per full-time
equivalent employee
RASM - operating revenue per ASMs, or "unit
revenue"; operating revenue includes all passenger revenue, freight
& mail, Mileage Plan and other ancillary revenue; represents
the average total revenue for flying one seat one mile
Regional - represents capacity purchased by Alaska from Horizon and SkyWest. In this
segment, Regional records actual on-board passenger revenue, less
costs such as fuel, distribution costs, and payments made to
Horizon and SkyWest under the respective capacity purchased
arrangement (CPAs). Additionally, Regional includes an allocation
of corporate overhead such as IT, finance, other administrative
costs incurred by Alaska and on
behalf of Horizon.
RPMs - revenue passenger miles, or "traffic";
represents the number of seats that were filled with paying
passengers; one passenger traveling one mile is one RPM
Yield - passenger revenue per RPM; represents the
average revenue for flying one passenger one mile
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SOURCE Alaska Air Group