Delivered industry-leading full-year adjusted
pretax margin of 7.6%;
Record annual revenue of
$9.6 billion, up 10% versus
2019;
Employees hard work recognized with
performance-based bonuses totaling 10.5% of annual pay
SEATTLE, Jan. 26,
2023 /PRNewswire/ -- Alaska Air Group Inc. (NYSE:
ALK) today reported financial results for the fourth quarter and
full year ended Dec. 31, 2022, and provided an outlook for the
first quarter ending March 31, 2023.
"2022 was a year of significant recovery and accomplishment for
Alaska Airlines," said Alaska Airlines CEO Ben Minicucci. "Despite many challenges during
the year, we ran one of the best operations, signed five new labor
deals, and executed the majority of our single fleet transition.
The results we posted today signal how well our teams are
navigating this recovery. I want to thank our employees for their
commitment to our success, and for the work they do every day to
take great care of our guests. I am confident that we are well
positioned to grow, compete and out-perform in 2023."
Financial Results:
- Reported net income for the fourth quarter and full year 2022
under Generally Accepted Accounting Principles (GAAP) of
$22 million, or $0.17 per diluted share, and $58 million, or $0.45 per diluted share. These results compare to
net income for the fourth quarter and full year 2021 of
$18 million, or $0.14 per diluted share, and $478 million, or $3.77 per diluted share.
- Reported net income for the fourth quarter and full year 2022,
excluding special items and mark-to-market fuel hedge accounting
adjustments, of $118 million, or
$0.92 per diluted share, and
$556 million, or $4.35 per diluted share. These results compare to
net income for the fourth quarter and net loss for the full year
2021, excluding special items and mark-to-market fuel hedge
accounting adjustments, of $31
million, or $0.24 per diluted
share, and $256 million, or
$2.03 per share.
- Recorded $257 million of
incentive pay in 2022 earned by employees for meeting or exceeding
profitability, safety and emissions targets. The payout is the
richest in the 20-year history of the plan, representing nearly six
weeks of pay for most employees.
- Recorded $2.5 billion in
operating revenue for the fourth quarter, resulting in $9.6 billion in operating revenue for the full
year 2022, the highest annual total in company history.
- Received nearly $1.5 billion in
annual cash remuneration under the renewed co-brand credit card
arrangement with Bank of America, the highest level in the
program's history.
Balance Sheet and
Liquidity:
- Announced plans to resume share repurchases in early 2023 to
offset annual dilution. Repurchases are expected to range from
$75 million to $100 million in 2023.
- Ended the quarter with a debt-to-capitalization ratio of 49%,
within our target range of 40% to 50%.
- Repaid $52 million in debt in the
fourth quarter, bringing total debt payments to $385 million for the full year 2022.
- Held $2.4 billion in unrestricted
cash and marketable securities as of Dec.
31, 2022.
Fleet Updates:
- Retired ten Airbus A320 aircraft and nine Q400 aircraft during
the fourth quarter. All remaining A320 aircraft have since been
retired and all remaining Q400 aircraft will be retired by the end
of January 2023.
- Amended a previously existing aircraft purchase agreement with
Boeing to convert 52 737 MAX aircraft options to firm purchases for
delivery between 2024 and 2027. Alaska also added an incremental 105 delivery
positions to purchase 737 MAX aircraft between 2026 and 2030.
- Received four 737-9 aircraft during the quarter, bringing the
total 737-9 fleet to 37.
- Received three E175 aircraft during the quarter, bringing
Horizon's total E175 fleet to 33.
Other Operational
Updates:
- Partnered with Lyft to offer Mileage Plan members one mile for
every $1 spent on all Lyft rides in
the U.S. and Canada.
- Added a new Mileage Plan partner, Mokulele Airlines, to offer
guests more convenient connections within the Hawaiian Islands,
starting in early 2023.
- Launched the first U.S. electronic bag tag program, enabling
guests to tag their luggage through the airline's mobile app before
they reach the airport.
- Opened the renovated C Concourse Lounge in Seattle, the first of several investments that
will improve the lounge experience with more seating and food and
beverage choices for guests in Seattle, Portland, San
Francisco and Los
Angeles.
Environmental, Social and
Governance Updates:
- Donated a retired Q400 to the Portland
Community College Foundation, providing students of the
Aviation Maintenance Technology and Aviation Science programs the
opportunity to gain hands-on experience working on a commercial
aircraft.
- Completed the transition to paper cups for inflight beverages,
which will replace more than 55 million plastic cups each year with
a more sustainable alternative.
- Donated 55 million miles to 20 different charities through
Alaska's Care Miles program in
2022.
- Created a new Diversity, Equity and Inclusion Disability Office
dedicated to ensuring Alaska
becomes a leader in disability inclusion.
The following table reconciles the company's reported GAAP net
income per share (EPS) for the three and twelve months ended
Dec. 31, 2022 and 2021 to adjusted amounts.
|
Three Months Ended
December 31,
|
|
2022
|
|
2021
|
(in millions,
except per-share amounts)
|
Dollars
|
|
Diluted
EPS
|
|
Dollars
|
|
Diluted
EPS
|
GAAP net income per
share
|
$
22
|
|
$
0.17
|
|
$
18
|
|
$
0.14
|
Mark-to-market fuel
hedge adjustments
|
12
|
|
0.09
|
|
21
|
|
0.16
|
Special items - fleet
transition and other(a)
|
120
|
|
0.93
|
|
(6)
|
|
(0.05)
|
Special items - labor
and related(b)
|
(6)
|
|
(0.04)
|
|
2
|
|
0.02
|
Income tax effect of
reconciling items above
|
(30)
|
|
(0.23)
|
|
(4)
|
|
(0.03)
|
Non-GAAP adjusted net
income (loss) per share
|
$
118
|
|
$
0.92
|
|
$
31
|
|
$
0.24
|
|
Twelve Months Ended
December 31,
|
|
2022
|
|
2021
|
(in millions,
except per-share amounts)
|
Dollars
|
|
Diluted
EPS
|
|
Dollars
|
|
Diluted
EPS
|
GAAP net income per
share
|
$
58
|
|
$
0.45
|
|
$
478
|
|
$
3.77
|
Payroll Support Program
grant wage offset
|
—
|
|
—
|
|
(914)
|
|
(7.21)
|
Mark-to-market fuel
hedge adjustments
|
76
|
|
0.60
|
|
(47)
|
|
(0.37)
|
Special items - fleet
transition and other(a)
|
496
|
|
3.88
|
|
(1)
|
|
(0.01)
|
Special items - labor
and related(b)
|
84
|
|
0.66
|
|
(10)
|
|
(0.08)
|
Income tax effect of
reconciling items above
|
(158)
|
|
(1.24)
|
|
238
|
|
1.87
|
Non-GAAP adjusted net
income (loss) per share
|
$
556
|
|
$
4.35
|
|
$
(256)
|
|
$
(2.03)
|
|
|
(a)
|
Special items - fleet
transition and other in the three and twelve months ended December
31, 2022 is primarily impairment charges and accelerated costs
associated with the retirement of the A320 and Q400
fleets.
|
(b)
|
Special items - labor
and related in the three and twelve months ended December 31, 2022
is primarily a one-time payment to Alaska pilots following
ratification of a new collective bargaining agreement.
|
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.
A conference call regarding the fourth quarter and full year
results will be streamed online at 8:30 a.m.
PST on Jan. 26, 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.
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 low fares and
award-winning customer service. Alaska is a member of the oneworld global
alliance. With the alliance and our additional airline partners,
our guests can travel to more than 900 destinations on more than 20
airlines while earning and redeeming miles on flights to locations
around the world. Learn more about Alaska at news.alaskaair.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
December
31,
|
|
Twelve Months Ended
December
31,
|
(in millions,
except per-share amounts)
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
Operating
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenue
|
$
2,264
|
|
$
1,715
|
|
32 %
|
|
$
8,808
|
|
$
5,499
|
|
60 %
|
Mileage Plan other
revenue
|
157
|
|
129
|
|
22 %
|
|
590
|
|
461
|
|
28 %
|
Cargo and other
revenue
|
58
|
|
55
|
|
5 %
|
|
248
|
|
216
|
|
15 %
|
Total Operating
Revenue
|
2,479
|
|
1,899
|
|
31 %
|
|
9,646
|
|
6,176
|
|
56 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
Wages and
benefits
|
709
|
|
637
|
|
11 %
|
|
2,640
|
|
2,218
|
|
19 %
|
Variable incentive
pay
|
117
|
|
42
|
|
179 %
|
|
257
|
|
151
|
|
70 %
|
Payroll Support Program
grant wage offset
|
—
|
|
—
|
|
— %
|
|
—
|
|
(914)
|
|
NM
|
Aircraft fuel,
including hedging gains and
losses
|
668
|
|
426
|
|
57 %
|
|
2,668
|
|
1,279
|
|
109 %
|
Aircraft
maintenance
|
93
|
|
92
|
|
1 %
|
|
424
|
|
364
|
|
16 %
|
Aircraft
rent
|
69
|
|
66
|
|
5 %
|
|
291
|
|
254
|
|
15 %
|
Landing fees and other
rentals
|
146
|
|
141
|
|
4 %
|
|
581
|
|
555
|
|
5 %
|
Contracted
services
|
86
|
|
68
|
|
26 %
|
|
329
|
|
235
|
|
40 %
|
Selling
expenses
|
77
|
|
50
|
|
54 %
|
|
295
|
|
173
|
|
71 %
|
Depreciation and
amortization
|
105
|
|
100
|
|
5 %
|
|
415
|
|
394
|
|
5 %
|
Food and beverage
service
|
54
|
|
42
|
|
29 %
|
|
197
|
|
139
|
|
42 %
|
Third-party regional
carrier expense
|
37
|
|
41
|
|
(10) %
|
|
182
|
|
147
|
|
24 %
|
Other
|
181
|
|
159
|
|
14 %
|
|
717
|
|
507
|
|
41 %
|
Special items - fleet
transition and other
|
120
|
|
(6)
|
|
NM
|
|
496
|
|
(1)
|
|
NM
|
Special items - labor
and related
|
(6)
|
|
2
|
|
NM
|
|
84
|
|
(10)
|
|
NM
|
Total Operating
Expenses
|
2,456
|
|
1,860
|
|
32 %
|
|
9,576
|
|
5,491
|
|
74 %
|
Operating
Income
|
23
|
|
39
|
|
(41) %
|
|
70
|
|
685
|
|
(90) %
|
Non-operating Income
(Expense)
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
18
|
|
6
|
|
200 %
|
|
53
|
|
25
|
|
112 %
|
Interest
expense
|
(24)
|
|
(27)
|
|
(11) %
|
|
(108)
|
|
(128)
|
|
(16) %
|
Interest
capitalized
|
6
|
|
2
|
|
200 %
|
|
14
|
|
11
|
|
27 %
|
Other - net
|
12
|
|
9
|
|
33 %
|
|
50
|
|
36
|
|
39 %
|
Total Non-operating
Income (Expense)
|
12
|
|
(10)
|
|
NM
|
|
9
|
|
(56)
|
|
116 %
|
Income Before Income
Tax
|
35
|
|
29
|
|
|
|
79
|
|
629
|
|
|
Income tax
expense
|
13
|
|
11
|
|
|
|
21
|
|
151
|
|
|
Net
Income
|
$
22
|
|
$
18
|
|
|
|
$
58
|
|
$
478
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings
Per Share
|
$
0.17
|
|
$
0.14
|
|
|
|
$
0.46
|
|
$
3.82
|
|
|
Diluted Earnings Per
Share
|
$
0.17
|
|
$
0.14
|
|
|
|
$
0.45
|
|
$
3.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used for
computation:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
127.303
|
|
125.708
|
|
|
|
126.657
|
|
125.063
|
|
|
Diluted
|
128.470
|
|
127.284
|
|
|
|
127.899
|
|
126.775
|
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
|
|
Alaska Air Group,
Inc.
|
|
|
|
As of December 31
(in millions)
|
2022
|
|
2021
|
ASSETS
|
|
|
|
Current
Assets
|
|
|
|
Cash and cash
equivalents
|
$
338
|
|
$
470
|
Marketable
securities
|
2,079
|
|
2,646
|
Total cash and
marketable securities
|
2,417
|
|
3,116
|
Receivables -
net
|
296
|
|
546
|
Inventories and
supplies - net
|
104
|
|
62
|
Prepaid expenses and
other current assets
|
223
|
|
196
|
Total Current
Assets
|
3,040
|
|
3,920
|
|
|
|
|
Property and
Equipment
|
|
|
|
Aircraft and other
flight equipment
|
9,053
|
|
8,127
|
Other property and
equipment
|
1,661
|
|
1,489
|
Deposits for future
flight equipment
|
670
|
|
384
|
|
11,384
|
|
10,000
|
Less accumulated
depreciation and amortization
|
4,127
|
|
3,862
|
Total Property and
Equipment - Net
|
7,257
|
|
6,138
|
|
|
|
|
Other
Assets
|
|
|
|
Operating lease
assets
|
1,566
|
|
1,453
|
Goodwill and intangible
assets
|
2,038
|
|
2,044
|
Other noncurrent
assets
|
380
|
|
396
|
Total Other
Assets
|
3,984
|
|
3,893
|
|
|
|
|
Total
Assets
|
$
14,281
|
|
$
13,951
|
CONDENSED
CONSOLIDATED BALANCE SHEETS (unaudited)
|
|
|
|
Alaska Air Group,
Inc.
|
|
|
|
As of December 31
(in millions except share amounts)
|
2022
|
|
2021
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts
payable
|
$
221
|
|
$
200
|
Accrued wages, vacation
and payroll taxes
|
619
|
|
457
|
Air traffic
liability
|
1,180
|
|
1,163
|
Other accrued
liabilities
|
846
|
|
625
|
Deferred
revenue
|
1,123
|
|
912
|
Current portion of
operating lease liabilities
|
247
|
|
268
|
Current portion of
long-term debt
|
276
|
|
366
|
Total Current
Liabilities
|
4,512
|
|
3,991
|
|
|
|
|
Long-Term Debt, Net
of Current Portion
|
1,883
|
|
2,173
|
|
|
|
|
Noncurrent
Liabilities
|
|
|
|
Long-term operating
lease liabilities, net of current portion
|
1,469
|
|
1,279
|
Deferred income
taxes
|
574
|
|
578
|
Deferred
revenue
|
1,374
|
|
1,446
|
Obligation for pension
and post-retirement medical benefits
|
348
|
|
305
|
Other
liabilities
|
305
|
|
378
|
Total Noncurrent
Liabilities
|
4,070
|
|
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 - 136,883,042
shares; 2021 - 135,255,808 shares, Outstanding: 2022 -
127,533,098 shares;
2021 - 125,905,864 shares
|
1
|
|
1
|
Capital in excess of
par value
|
577
|
|
494
|
Treasury stock
(common), at cost: 2022 - 9,349,944 shares; 2021 -
9,349,944
shares
|
(674)
|
|
(674)
|
Accumulated other
comprehensive loss
|
(388)
|
|
(262)
|
Retained
earnings
|
4,300
|
|
4,242
|
|
3,816
|
|
3,801
|
Total Liabilities
and Shareholders' Equity
|
$
14,281
|
|
$
13,951
|
SUMMARY CASH FLOW
(unaudited)
|
|
|
|
|
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
(in
millions)
|
Year Ended
December 31, 2022
|
|
Nine Months
Ended
September 30, 2022(a)
|
|
Three Months
Ended
December 31,
2022(b)
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
Net income
|
$
58
|
|
$
36
|
|
$
22
|
Non-cash reconciling
items
|
953
|
|
719
|
|
234
|
Changes in working
capital
|
407
|
|
654
|
|
(247)
|
Net cash provided by
operating activities
|
1,418
|
|
1,409
|
|
9
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
Property and equipment
additions
|
(1,671)
|
|
(947)
|
|
(724)
|
Other investing
activities
|
453
|
|
59
|
|
394
|
Net cash used in
investing activities
|
(1,218)
|
|
(888)
|
|
(330)
|
|
|
|
|
|
|
Net cash used in
financing activities
|
(325)
|
|
(296)
|
|
(29)
|
|
|
|
|
|
|
Net increase (decrease)
in cash and cash equivalents
|
(125)
|
|
225
|
|
(350)
|
Cash, cash equivalents,
and restricted cash at
beginning of year
|
494
|
|
494
|
|
719
|
Cash, cash
equivalents, and restricted cash at end
of year
|
$
369
|
|
$
719
|
|
$
369
|
|
|
(a)
|
As reported in Form
10-Q for the third quarter of 2022.
|
(b)
|
Cash flows for the
three months ended December 31, 2022 can be calculated by
subtracting cash flows for the nine months
ended September 30, 2022, as reported in Form 10-Q for
the third quarter 2022, from the year ended December 31,
2022.
|
OPERATING STATISTICS
SUMMARY (unaudited)
|
|
|
|
|
|
|
|
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Twelve Months Ended
December 31,
|
|
2022
|
|
2021
|
|
Change
|
|
2022
|
|
2021
|
|
Change
|
Consolidated
Operating Statistics:(a)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue passengers
(000)
|
10,331
|
|
9,196
|
|
12.3 %
|
|
41,468
|
|
32,407
|
|
28.0 %
|
RPMs (000,000)
"traffic"
|
12,855
|
|
11,279
|
|
14.0 %
|
|
51,330
|
|
38,598
|
|
33.0 %
|
ASMs (000,000)
"capacity"
|
15,030
|
|
14,207
|
|
5.8 %
|
|
60,773
|
|
52,445
|
|
15.9 %
|
Load factor
|
85.5 %
|
|
79.4 %
|
|
6.1 pts
|
|
84.5 %
|
|
73.6 %
|
|
10.9 pts
|
Yield
|
17.61¢
|
|
15.20¢
|
|
15.9 %
|
|
17.16¢
|
|
14.25¢
|
|
20.4 %
|
RASM
|
16.49¢
|
|
13.36¢
|
|
23.4 %
|
|
15.87¢
|
|
11.78¢
|
|
34.8 %
|
CASMex(b)
|
11.14¢
|
|
10.12¢
|
|
10.1 %
|
|
10.41¢
|
|
9.80¢
|
|
6.3 %
|
Economic fuel cost per
gallon(b)
|
$3.55
|
|
$2.26
|
|
57.1 %
|
|
$3.42
|
|
$2.02
|
|
69.3 %
|
Fuel gallons
(000,000)
|
185
|
|
179
|
|
3.4 %
|
|
758
|
|
656
|
|
15.5 %
|
ASMs per
gallon
|
81.2
|
|
79.4
|
|
2.3 %
|
|
80.2
|
|
79.9
|
|
0.3 %
|
Departures
(000)
|
95
|
|
94
|
|
1.1 %
|
|
404
|
|
377
|
|
7.2 %
|
Average full-time
equivalent employees
(FTEs)
|
23,195
|
|
21,043
|
|
10.2 %
|
|
22,564
|
|
19,375
|
|
16.5 %
|
Mainline Operating
Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
Revenue passengers
(000)
|
8,237
|
|
6,900
|
|
19.4 %
|
|
31,795
|
|
23,268
|
|
36.6 %
|
RPMs (000,000)
"traffic"
|
11,994
|
|
10,078
|
|
19.0 %
|
|
46,812
|
|
33,755
|
|
38.7 %
|
ASMs (000,000)
"capacity"
|
14,004
|
|
12,737
|
|
9.9 %
|
|
55,224
|
|
45,741
|
|
20.7 %
|
Load factor
|
85.6 %
|
|
79.1 %
|
|
6.5 pts
|
|
84.8 %
|
|
73.8 %
|
|
11.0 pts
|
Yield
|
16.39¢
|
|
13.97¢
|
|
17.3 %
|
|
15.92¢
|
|
13.07¢
|
|
21.8 %
|
RASM
|
15.49¢
|
|
12.39¢
|
|
25.0 %
|
|
14.91¢
|
|
10.99¢
|
|
35.7 %
|
CASMex(b)
|
10.05¢
|
|
9.14¢
|
|
10.0 %
|
|
9.45¢
|
|
8.96¢
|
|
5.5 %
|
Economic fuel cost per
gallon(b)
|
$3.52
|
|
$2.25
|
|
56.4 %
|
|
$3.40
|
|
$2.01
|
|
69.2 %
|
Fuel gallons
(000,000)
|
163
|
|
150
|
|
8.7 %
|
|
646
|
|
530
|
|
21.9 %
|
ASMs per
gallon
|
85.9
|
|
84.8
|
|
1.3 %
|
|
85.5
|
|
86.2
|
|
(0.8) %
|
Departures
(000)
|
62
|
|
56
|
|
10.7 %
|
|
244
|
|
207
|
|
17.9 %
|
Average full-time
equivalent employees
(FTEs)
|
17,792
|
|
15,855
|
|
12.2 %
|
|
17,224
|
|
14,366
|
|
19.9 %
|
Aircraft
utilization
|
9.9
|
|
10.0
|
|
(1.0) %
|
|
9.9
|
|
9.7
|
|
2.1 %
|
Average aircraft stage
length
|
1,341
|
|
1,356
|
|
(1.1) %
|
|
1,347
|
|
1,324
|
|
1.7 %
|
Operating
fleet(d)
|
225
|
|
217
|
|
8 a/c
|
|
225
|
|
217
|
|
8 a/c
|
Regional Operating
Statistics:(c)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue passengers
(000)
|
2,094
|
|
2,296
|
|
(8.8) %
|
|
9,673
|
|
9,139
|
|
5.8 %
|
RPMs (000,000)
"traffic"
|
861
|
|
1,201
|
|
(28.3) %
|
|
4,518
|
|
4,842
|
|
(6.7) %
|
ASMs (000,000)
"capacity"
|
1,027
|
|
1,469
|
|
(30.1) %
|
|
5,549
|
|
6,704
|
|
(17.2) %
|
Load factor
|
83.9 %
|
|
81.7 %
|
|
2.2 pts
|
|
81.4 %
|
|
72.2 %
|
|
9.2 pts
|
Yield
|
34.66¢
|
|
25.57¢
|
|
35.5 %
|
|
29.97¢
|
|
22.49¢
|
|
33.3 %
|
RASM
|
30.08¢
|
|
21.82¢
|
|
37.9 %
|
|
25.34¢
|
|
17.12¢
|
|
48.0 %
|
Departures
(000)
|
33
|
|
38
|
|
(13.2) %
|
|
160
|
|
170
|
|
(5.9) %
|
Operating
fleet(d)
|
86
|
|
94
|
|
(8) a/c
|
|
86
|
|
94
|
|
(8) 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 potential
importance of this measure to investors in the accompanying
pages.
|
(c)
|
Data presented includes
information related to 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 with 2019
(unaudited)
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
2022
|
|
2019
|
|
Change
|
|
2022
|
|
2019
|
|
Change
|
Passenger
revenue
|
$
2,264
|
|
$
2,057
|
|
10 %
|
|
$
8,808
|
|
$
8,095
|
|
9 %
|
Mileage Plan other
revenue
|
157
|
|
119
|
|
32 %
|
|
590
|
|
465
|
|
27 %
|
Cargo and other
revenue
|
58
|
|
52
|
|
12 %
|
|
248
|
|
221
|
|
12 %
|
Total Operating
Revenue
|
$
2,479
|
|
$
2,228
|
|
11 %
|
|
$
9,646
|
|
$
8,781
|
|
10 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expense,
excluding fuel and
special items
|
$
1,674
|
|
$
1,500
|
|
12 %
|
|
$
6,328
|
|
$
5,796
|
|
9 %
|
Aircraft fuel,
including hedging gains and
losses
|
668
|
|
476
|
|
40 %
|
|
2,668
|
|
1,884
|
|
42 %
|
Special
items
|
114
|
|
—
|
|
NM
|
|
580
|
|
38
|
|
NM
|
Total Operating
Expenses
|
$
2,456
|
|
$
1,976
|
|
24 %
|
|
$
9,576
|
|
$
7,718
|
|
24 %
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Non-operating
Income (Expense)
|
$
12
|
|
$
(9)
|
|
NM
|
|
$
9
|
|
$
(47)
|
|
119 %
|
Income Before Income
Tax
|
$
35
|
|
$
243
|
|
(86) %
|
|
$
79
|
|
$
1,016
|
|
(92) %
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
Operating Statistics:
|
|
|
|
|
|
|
|
|
|
|
|
Revenue passengers
(000)
|
10,331
|
|
11,715
|
|
(12) %
|
|
41,468
|
|
46,733
|
|
(11) %
|
RPMs (000,000)
"traffic"
|
12,855
|
|
13,928
|
|
(8) %
|
|
51,330
|
|
56,040
|
|
(8) %
|
ASMs (000,000)
"capacity"
|
15,030
|
|
16,648
|
|
(10) %
|
|
60,773
|
|
66,654
|
|
(9) %
|
Load Factor
|
85.5 %
|
|
83.7 %
|
|
1.8 pts
|
|
84.5 %
|
|
84.1 %
|
|
0.4 pts
|
Yield
|
17.61¢
|
|
14.77¢
|
|
19 %
|
|
17.16¢
|
|
14.45¢
|
|
19 %
|
RASM
|
16.49¢
|
|
13.38¢
|
|
23 %
|
|
15.87¢
|
|
13.17¢
|
|
21 %
|
CASMex
|
11.14¢
|
|
9.01¢
|
|
24 %
|
|
10.41¢
|
|
8.70¢
|
|
20 %
|
FTEs
|
23,195
|
|
22,506
|
|
3 %
|
|
22,564
|
|
22,126
|
|
2 %
|
OPERATING SEGMENTS
(unaudited)
|
|
|
|
|
|
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2022
|
(in
millions)
|
Mainline
|
|
Regional
|
|
Horizon
|
|
Consolidating
& Other(a)
|
|
Air Group
Adjusted(b)
|
|
Special
Items(c)
|
|
Consolidated
|
Operating
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenue
|
$
1,966
|
|
$
298
|
|
$
—
|
|
$
—
|
|
$
2,264
|
|
$
—
|
|
$
2,264
|
CPA revenue
|
—
|
|
—
|
|
71
|
|
(71)
|
|
—
|
|
—
|
|
—
|
Mileage Plan other
revenue
|
146
|
|
11
|
|
—
|
|
—
|
|
157
|
|
—
|
|
157
|
Cargo and other
revenue
|
58
|
|
—
|
|
—
|
|
—
|
|
58
|
|
—
|
|
58
|
Total Operating
Revenue
|
2,170
|
|
309
|
|
71
|
|
(71)
|
|
2,479
|
|
—
|
|
2,479
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding fuel
|
1,408
|
|
243
|
|
92
|
|
(69)
|
|
1,674
|
|
114
|
|
1,788
|
Fuel expense
|
572
|
|
84
|
|
—
|
|
—
|
|
656
|
|
12
|
|
668
|
Total Operating
Expenses
|
1,980
|
|
327
|
|
92
|
|
(69)
|
|
2,330
|
|
126
|
|
2,456
|
Non-operating Income
(Expense)
|
18
|
|
—
|
|
(7)
|
|
1
|
|
12
|
|
—
|
|
12
|
Income (Loss) Before
Income Tax
|
$
208
|
|
$
(18)
|
|
$
(28)
|
|
$
(1)
|
|
$
161
|
|
$
(126)
|
|
$
35
|
Pretax
Margin
|
|
|
|
|
|
|
|
|
6.5 %
|
|
|
|
1.4 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2021
|
(in
millions)
|
Mainline
|
|
Regional
|
|
Horizon
|
|
Consolidating
& Other(a)
|
|
Air Group
Adjusted(b)
|
|
Special
Items(c)
|
|
Consolidated
|
Operating
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenue
|
$
1,408
|
|
$
307
|
|
$
—
|
|
$
—
|
|
$
1,715
|
|
$
—
|
|
$
1,715
|
CPA revenue
|
—
|
|
—
|
|
84
|
|
(84)
|
|
—
|
|
—
|
|
—
|
Mileage Plan other
revenue
|
115
|
|
14
|
|
—
|
|
—
|
|
129
|
|
—
|
|
129
|
Cargo and other
revenue
|
55
|
|
—
|
|
—
|
|
—
|
|
55
|
|
—
|
|
55
|
Total Operating
Revenue
|
1,578
|
|
321
|
|
84
|
|
(84)
|
|
1,899
|
|
—
|
|
1,899
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding fuel
|
1,164
|
|
258
|
|
101
|
|
(85)
|
|
1,438
|
|
(4)
|
|
1,434
|
Fuel expense
|
339
|
|
66
|
|
—
|
|
—
|
|
405
|
|
21
|
|
426
|
Total Operating
Expenses
|
1,503
|
|
324
|
|
101
|
|
(85)
|
|
1,843
|
|
17
|
|
1,860
|
Non-operating Income
(Expense)
|
(7)
|
|
—
|
|
(5)
|
|
2
|
|
(10)
|
|
—
|
|
(10)
|
Income (Loss) Before
Income Tax
|
$
68
|
|
$
(3)
|
|
$
(22)
|
|
$
3
|
|
$
46
|
|
$
(17)
|
|
$
29
|
Pretax
Margin
|
|
|
|
|
|
|
|
|
2.4 %
|
|
|
|
1.5 %
|
OPERATING SEGMENTS
(unaudited)
|
|
|
|
|
|
|
Alaska Air Group,
Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31, 2022
|
(in
millions)
|
Mainline
|
|
Regional
|
|
Horizon
|
|
Consolidating
& Other(a)
|
|
Air Group
Adjusted(b)
|
|
Special
Items(c)
|
|
Consolidated
|
Operating
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenue
|
$
7,454
|
|
$ 1,354
|
|
$
—
|
|
$
—
|
|
$
8,808
|
|
$
—
|
|
$
8,808
|
CPA revenue
|
—
|
|
—
|
|
359
|
|
(359)
|
|
—
|
|
—
|
|
—
|
Mileage Plan other
revenue
|
538
|
|
52
|
|
—
|
|
—
|
|
590
|
|
—
|
|
590
|
Cargo and other
revenue
|
244
|
|
—
|
|
—
|
|
4
|
|
248
|
|
—
|
|
248
|
Total Operating
Revenue
|
8,236
|
|
1,406
|
|
359
|
|
(355)
|
|
9,646
|
|
—
|
|
9,646
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding fuel
|
5,216
|
|
1,085
|
|
383
|
|
(356)
|
|
6,328
|
|
580
|
|
6,908
|
Fuel expense
|
2,195
|
|
397
|
|
—
|
|
—
|
|
2,592
|
|
76
|
|
2,668
|
Total Operating
Expenses
|
7,411
|
|
1,482
|
|
383
|
|
(356)
|
|
8,920
|
|
656
|
|
9,576
|
Non-operating Income
(Expense)
|
30
|
|
—
|
|
(22)
|
|
1
|
|
9
|
|
—
|
|
9
|
Income (Loss) Before
Income Tax
|
$
855
|
|
$
(76)
|
|
$
(46)
|
|
$
2
|
|
$
735
|
|
$
(656)
|
|
$
79
|
Pretax
Margin
|
|
|
|
|
|
|
|
|
7.6 %
|
|
|
|
0.8 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31, 2021
|
(in
millions)
|
Mainline
|
|
Regional
|
|
Horizon
|
|
Consolidating
& Other(a)
|
|
Air Group
Adjusted(b)
|
|
Special
Items(c)
|
|
Consolidated
|
Operating
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Passenger
revenue
|
$
4,411
|
|
$ 1,088
|
|
$
—
|
|
$
—
|
|
$
5,499
|
|
$
—
|
|
$
5,499
|
CPA revenue
|
—
|
|
—
|
|
406
|
|
(406)
|
|
—
|
|
—
|
|
—
|
Mileage Plan other
revenue
|
402
|
|
59
|
|
—
|
|
—
|
|
461
|
|
—
|
|
461
|
Cargo and other
revenue
|
212
|
|
—
|
|
—
|
|
4
|
|
216
|
|
—
|
|
216
|
Total Operating
Revenue
|
5,025
|
|
1,147
|
|
406
|
|
(402)
|
|
6,176
|
|
—
|
|
6,176
|
Operating
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses,
excluding fuel
|
4,101
|
|
1,096
|
|
373
|
|
(433)
|
|
5,137
|
|
(925)
|
|
4,212
|
Fuel expense
|
1,065
|
|
261
|
|
—
|
|
—
|
|
1,326
|
|
(47)
|
|
1,279
|
Total Operating
Expenses
|
5,166
|
|
1,357
|
|
373
|
|
(433)
|
|
6,463
|
|
(972)
|
|
5,491
|
Non-operating Income
(Expense)
|
(38)
|
|
—
|
|
(21)
|
|
3
|
|
(56)
|
|
—
|
|
(56)
|
Income (Loss) Before
Income Tax
|
$
(179)
|
|
$ (210)
|
|
$
12
|
|
$
34
|
|
$
(343)
|
|
$
972
|
|
$
629
|
Pretax
Margin
|
|
|
|
|
|
|
|
|
(5.6) %
|
|
|
|
10.2 %
|
|
|
(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
December 31,
|
|
Twelve Months Ended
December 31,
|
(in
cents)
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Consolidated:
|
|
|
|
|
|
|
|
CASM
|
16.34 ¢
|
|
13.09 ¢
|
|
15.76 ¢
|
|
10.47 ¢
|
Less the following
components:
|
|
|
|
|
|
|
|
Payroll Support
Program grant wage offset
|
—
|
|
—
|
|
—
|
|
(1.75)
|
Aircraft fuel,
including hedging gains and losses
|
4.44
|
|
3.00
|
|
4.39
|
|
2.44
|
Special items - fleet
transition and other(a)
|
0.80
|
|
(0.04)
|
|
0.82
|
|
—
|
Special items - labor
and related(b)
|
(0.04)
|
|
0.01
|
|
0.14
|
|
(0.02)
|
CASM excluding fuel
and special items
|
11.14 ¢
|
|
10.12 ¢
|
|
10.41 ¢
|
|
9.80 ¢
|
|
|
|
|
|
|
|
|
Mainline:
|
|
|
|
|
|
|
|
CASM
|
14.95 ¢
|
|
11.77 ¢
|
|
14.42 ¢
|
|
9.52 ¢
|
Less the following
components:
|
|
|
|
|
|
|
|
Payroll support
program grant wage offset
|
—
|
|
—
|
|
—
|
|
(1.75)
|
Aircraft fuel,
including hedging gains and losses
|
4.17
|
|
2.66
|
|
4.11
|
|
2.33
|
Special items - fleet
transition and other(a)
|
0.77
|
|
(0.05)
|
|
0.71
|
|
—
|
Special items - labor
and related(b)
|
(0.04)
|
|
0.02
|
|
0.15
|
|
(0.02)
|
CASM excluding fuel
and special items
|
10.05 ¢
|
|
9.14 ¢
|
|
9.45 ¢
|
|
8.96 ¢
|
|
|
(a)
|
Special items - fleet
transition and other in the three and twelve months ended December
31, 2022 is primarily impairment charges and accelerated costs
associated with the retirement of the A320 and Q400
fleets.
|
(b)
|
Special items - labor
and related in the three and twelve months ended December 31, 2022
is primarily a one-time payment to Alaska pilots following
ratification of a new collective bargaining agreement.
|
Fuel
Reconciliation
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
2022
|
|
2021
|
(in millions,
except for per-gallon amounts)
|
Dollars
|
|
Cost/Gal
|
|
Dollars
|
|
Cost/Gal
|
Raw or "into-plane"
fuel cost
|
$
657
|
|
$
3.55
|
|
$
434
|
|
$
2.42
|
Losses (gains) on
settled hedges
|
(1)
|
|
—
|
|
(29)
|
|
(0.16)
|
Consolidated
economic fuel expense
|
$
656
|
|
$
3.55
|
|
$
405
|
|
$
2.26
|
Mark-to-market fuel
hedge adjustment
|
12
|
|
0.06
|
|
21
|
|
0.12
|
GAAP fuel
expense
|
$
668
|
|
$
3.61
|
|
$
426
|
|
$
2.38
|
Fuel gallons
|
|
|
185
|
|
|
|
179
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended
December 31,
|
|
2022
|
|
2021
|
(in millions,
except for per-gallon amounts)
|
Dollars
|
|
Cost/Gal
|
|
Dollars
|
|
Cost/Gal
|
Raw or "into-plane"
fuel cost
|
$
2,761
|
|
$
3.64
|
|
$
1,383
|
|
$
2.11
|
Losses (gains) on
settled hedges
|
(169)
|
|
(0.22)
|
|
(57)
|
|
(0.09)
|
Consolidated
economic fuel expense
|
$
2,592
|
|
$
3.42
|
|
$
1,326
|
|
$
2.02
|
Mark-to-market fuel
hedge adjustment
|
76
|
|
0.10
|
|
(47)
|
|
(0.07)
|
GAAP fuel
expense
|
$
2,668
|
|
$
3.52
|
|
$
1,279
|
|
$
1.95
|
Fuel gallons
|
|
|
758
|
|
|
|
656
|
Debt-to-capitalization, including operating
leases
|
(in
millions)
|
December 31,
2022
|
|
December 31,
2021
|
Long-term debt, net of
current portion
|
$
1,883
|
|
$
2,173
|
Long-term and current
capitalized operating leases
|
1,716
|
|
1,547
|
Adjusted debt, net of
current portion of long-term debt
|
$
3,599
|
|
$
3,720
|
Shareholders'
equity
|
3,816
|
|
3,801
|
Total Invested
Capital
|
$
7,415
|
|
$
7,521
|
|
|
|
|
Debt-to-capitalization
ratio, including operating leases
|
49 %
|
|
49 %
|
Adjusted net debt to
earnings before interest, taxes, depreciation, amortization, rent,
and special items
|
(in
millions)
|
December 31,
2022
|
|
December 31,
2021
|
Current portion of
long-term debt
|
$
276
|
|
$
366
|
Current portion of
operating lease liabilities
|
247
|
|
268
|
Long-term
debt
|
1,883
|
|
2,173
|
Long-term operating
lease liabilities, net of current portion
|
1,469
|
|
1,279
|
Total adjusted
debt
|
3,875
|
|
4,086
|
Less: Total cash and
marketable securities
|
(2,417)
|
|
(3,116)
|
Adjusted net
debt
|
$
1,458
|
|
$
970
|
|
|
|
|
(in
millions)
|
Year Ended
December
31, 2022
|
|
Year Ended
December
31, 2021
|
GAAP Operating
Income
|
$
70
|
|
$
685
|
Adjusted
for:
|
|
|
|
Special items and
Payroll Support Program grant wage offset
|
580
|
|
(925)
|
Mark-to-market fuel
hedge adjustments
|
76
|
|
(47)
|
Depreciation and
amortization
|
415
|
|
394
|
Aircraft
rent
|
291
|
|
254
|
EBITDAR
|
$
1,432
|
|
$
361
|
Adjusted net debt to
EBITDAR
|
1.0x
|
|
2.7x
|
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 excluding fuel expense and certain other items, such as the
Payroll Support Program grant wage offset and other special items,
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 other items,
such as the Payroll Support Program grant wage offset and other
special items, 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 unit revenue, we do not, nor are we
able to, evaluate unit revenue 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 revenue 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 revenue 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