Summary
- Alaska Air Group reported a profit of $240 million in Q2 2023, a significant increase from the previous year, showcasing strong financial performance.
- The group achieved industry-leading operational outcomes, with high customer satisfaction and strong financial results, crediting the efforts of its dedicated frontline employees.
Alaska Air Group, the parent company of Alaska Airlines and Horizon Air, reported its financial results for the second quarter of 2023 on Tuesday. The company recorded a profit of $240 million, which was significantly higher than its results during the same period the year prior.
Operationally, Alaska and Horizon expanded their fleet, welcoming 14 new aircraft to accommodate the group’s growing route network. A new partnership was also announced, giving the company’s frequent flyers increased connectivity to international destinations.
“Industry-leading”
In Q2 2022, Alaska Air Group’s total earnings were $139 million. At a $240 million profit in Q2 2023, the group recorded a profit increase of more than $100 million. Among net income excluding special items and mark-to-market fuel hedge accounting adjustments, the company reported a profit of $387 million which was still an improvement from last year. Generated adjusted pre-tax margins of 18.3% were recorded, which was a 250-basis point increase over the second quarter of 2019, according to the company.
Benn Minicucci, the CEO of Alaska Air Group, spoke about this year’s Q2 results.
"People are hungry to travel and our frontline employees are delivering the safe, reliable and caring experience that people expect when they fly with us. I'm so proud of our team for knocking it out of the park and delivering industry-leading operational and financial outcomes.”
Other financial highlights include:
- Operating revenue amounted to $2.8 billion during Q2 2023 and was the highest quarterly total in the group’s history
- Increased consumer spending resulted in $435 million in bank card partner commissions being received
- 871,987 shares of common stock were repurchased for approximately $39 million, which increased the total amount of repurchases to $57 million for the first six months of 2023
- $610 million in operating cash flow were generated
Operational successes
During the second quarter, both airlines also received new aircraft. Eight new Boeing 737 MAX 9 aircraft joined the mainline fleet, operated by Alaska, while six new Embrarer E175 regional jets were added to Horizon’s fleet. With the additions, Alaska’s fleet grows to 51 MAX 9 aircraft and Horizon’s to 39 E175. Additionally, installations of Intelsat satellite WiFi have been completed across the mainline fleet.
The group also announced that new international destinations will be reached from its West Coast hubs. New routes to Nassau from Seattle and Los Angeles, will take off in December and are set to be the airline’s longest routes yet. Flights to Guatemala City will also be introduced at the end of the year, marking six countries that the company will serve.
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More connections
To offer better connectivity options for travelers, Alaska Air Group launched a partnership with Taiwan-based STARLUX Airlines, which flies between Los Angeles and Taipei. The agreement allows Alaska’s frequent fliers to connect to 16 destinations across Asia.
“We chose to prioritize reliability, which is imperative to restoring stability, improving predictability for our guests and employees, capturing record revenue, and serving as the foundation for our long-term profitable growth,” Minicucci explained.
The company achieved the industry’s best on-time performance and completion rate last month and plans to continue the momentum into the third quarter.