Alaska Air Group Reports 28% Revenue Increase but Decline in Net Income for Q2 2025

Alaska Air Group, Inc. reported its financial results for the second quarter of 2025, revealing a total operating revenue of $3.704 billion, a 28% increase from $2.897 billion in the same quarter of 2024. The company's passenger revenue surged to $3.355 billion, up from $2.651 billion year-over-year, while cargo and other revenue also saw a significant rise to $139 million from $72 million. However, net income for the quarter decreased to $172 million, or $1.42 per diluted share, compared to $220 million, or $1.71 per diluted share, in the prior year. The decline in net income was attributed to increased operating expenses, which rose to $3.427 billion from $2.575 billion, driven primarily by higher wages and benefits, fuel costs, and maintenance expenses.

In terms of operational metrics, Alaska Air Group reported a 28.1% increase in revenue passenger miles (RPMs) to 20.179 billion and a 32.2% increase in available seat miles (ASMs) to 24.058 billion. The load factor for the quarter was 83.9%, slightly down from 84.1% in the previous year. The company also noted a significant increase in its average full-time equivalent employees, which rose to 31,299 from 23,368, reflecting the integration of Hawaiian Airlines following its acquisition in September 2024.

The acquisition of Hawaiian Holdings, Inc. has been a significant strategic development for Alaska Air Group, enhancing its network and operational capabilities. The integration process is ongoing, with management focusing on achieving synergies and optimizing operations across both airlines. The company incurred $56 million in special items related to the acquisition during the quarter, a decrease from $146 million in the same period last year. This reflects a reduction in nonrecurring costs associated with labor agreements and other operational adjustments.

Looking ahead, Alaska Air Group anticipates a modest increase in capacity of 2% for the full year 2025, with unit revenue expected to remain flat to increase in low single digits. However, the company expects some operational challenges in the third quarter due to irregular operations stemming from an IT outage. The management remains optimistic about the recovery in traffic and yield, driven by the combined strengths of Alaska and Hawaiian Airlines, and is committed to maintaining a strong liquidity position, with cash and marketable securities totaling $2.152 billion as of June 30, 2025.