Alaska Air Brings Back Annual Profit Outlook on Improved Demand
Average fares and revenue have improved in recent bookings at both Alaska and its Hawaiian Airlines unit, leading to a 2025 adjusted profit outlook of more than $3.25 a share, the carrier said Wednesday in a statement that also included second-quarter financial results.
The airline was among those that pulled annual outlooks in April, after uncertainty stoked by President Donald Trump's tariff policies rattled business and consumer confidence and cratered demand early in the year. Increased business travel — particularly in the tech industry — that started late in the second quarter has persisted this month as companies see more stability in the macroeconomy, Chief Financial Officer Shane Tackett said.
'That's been a good development,' Tackett said in an interview. 'We're optimistic that if it remains, we could have a stronger second half than the first as some demand that stepped down comes back.'
The recent pickup in travel is particularly important for Alaska as it continues combining operations with Hawaiian, which it acquired in September. Alaska and other US-focused carriers were more affected by the early drop in demand than rivals including United Airlines Group Inc. and Delta Air Lines Inc. that also have extensive international operations.
Alaska will limit flying capacity growth in the second half of the year. The carrier expects third quarter seating to be 1% lower than 2024 on demand that's below its expectations during off-peak travel times. Smaller airlines are broadly expected to slow growth after the summer travel period in an effort to better match demand and boost fares.
The airline also said it expects a third-quarter adjusted earnings per share of $1 to $1.40. That is lower than the $1.65 average of analyst estimates compiled by Bloomberg. Wall Street was expecting a 2025 adjusted profit of $3.31 per share.
Alaska has taken delivery of two Embraer SA E175 aircraft that it delayed earlier this year on the threat of possible tariffs, Tackett said. The airline is set to receive three more next year and will have to evaluate 'whether or not those assets make economic sense for us' if tariffs force Embraer to increase prices markedly. Embraer's chief executive officer has said punitive tariffs threatened by Trump could add $9 million to the price of each plane.
Alaska's adjusted second-quarter profit was $1.78 a share, topping the $1.53 average from analyst estimates. Revenue was $3.7 billion, while analysts were expecting $3.66 billion.
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