Alaska Air Group, Inc. · NYSE:ALK
Alaska Air — Q1 2024 Earnings Presentation
9 slides from Alaska Air's earnings presentation, Apr 18, 2024
Slide 1: Alaska Air Group Q1 2024 Earnings
ALASKA AIR GROUP Q1 2024 Earnings
Slide 2: Safe Harbor and Non-GAAP Financial Information
Safe Harbor This presentation 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 f
Slide 3: Earnings Update
Earnings Update Air Group’s reported Q1 2024 results were significantly impacted by the accident onboard Flight 1282 and subsequent grounding of our MAX fleet through February 8, 2024. We received $162 million in initial cash compensation from Boeing to address the financial damages incurred durin
Slide 4: Profitability
Profitability Q1 Adjusted Pretax & EPS Results Notes $5 Focused network reconfiguration, increased corporate travel, and close-in leisure strength drove a significant y/y improvement in core Q1 2024 profitability Q1 results include a negative profit impact of $162 million related to Flight 1282
Slide 5: Unit Revenue
Unit Revenue Q1 Unit Revenue y-o-y Notes Reported Q1 2024 unit revenue increased ~0.5% ~5% 3.8% y/y, exceeding initial expectations to ~1.5% be up 1% to 2%, driven by better-than- 3.8% expected results from network reallocations, a material step up in ~1.5% ~(1.2%) corporate travel, and robust clo
Slide 6: Unit Cost
Unit Cost Q1 Unit Cost y-o-y Notes 11.2% ~2% Grounding-related impacts from lost capacity and costs incurred to restore our ~4% operation contributed ~6 points of Q1 CASMex pressure Labor costs including ~$30 million related ~2% to annualizing pilot wage rates and the ratification of a new aircr
Slide 7: Capacity
Capacity ASMs y-o-y Notes 5% to 7% Q1 2024 capacity decreased 2.1% y/y, including an approximate 5.5-point impact from the MAX grounding. Absent this impact, Q1 capacity would have increased approximately 3.5% y/y ~ 3.5% < 3% Q2 2024 capacity is expected to increase approximately 5% to 7% FY 2
Slide 8: Fuel Cost
Fuel Cost LA vs USGC Refining Margin Spread Notes Q1 2024 economic fuel cost per gallon $0.34 was $3.08, higher than our original $0.30 expectation of ~$3.00 due to unplanned refinery maintenance on the West Coast during February $0.19 $0.16 West Coast refining margins averaged ~$0.16 over Gulf
Slide 9: Balance Sheet
Balance Sheet Debt-to-Capitalization Adjusted Net Debt/EBITDAR 2.7x 61% 49% 48% 46% 47% 41% 1.4x 1.1x 0.9x 1.0x 2019 2020 2021 2022 2023 1Q24 2019 2021 2022 2023 1Q24 Target Debt-to-Cap Range 40% - 50% Target Adj. Net Debt/EBITDAR < 1.5x