Amid Higher Interest Rates, Alaska Air Group, Inc. (ALK) Looks to Refinance Pandemic Loans; Settles $1 Billion Lawsuit
An aerial view of a cargo plane taking off from a commercial airport, reflecting the company's overnight air cargo services.
On July 17, 2025, Bloomberg reported that Alaska Air Group, Inc. (NYSE:ALK) is looking to refinance its $689 million worth of loans that it took out from the U.S. state during the pandemic in 2020 and 2021. The company borrowed the funds to support employee payroll amid an industry-wide downturn.
Alaska Air Group, Inc.'s (NYSE:ALK) refinancing plan is tied to interest rates on the loan, which increase after five years of issuance to incentivize the borrower to at least find refinancing alternatives, if not repay. As such, the interest rate, which originally stood at flat 1%, will increase 2% over the Secured Overnight Financing Rate (SOFR), reaching 6%. The fact that ALK carries junk ratings from each of the three major bond rating agencies will be crucial as it continues its efforts to ease post-pandemic recovery and navigate a higher interest rate environment.
Meanwhile, Alaska Air Group, Inc. (NYSE:ALK) has reached an out-of-court settlement on a $1 billion lawsuit. The lawsuit relates to the mid-flight door blowout incident, leaving passengers terrified. The details of the settlement, which reportedly took place on July 7, haven't been disclosed yet.
Alaska Air Group, Inc. (NYSE:ALK), an air carrier, operates through three segments: Alaska Airlines, Hawaiian Airlines, and Regional. It is on the list of cheap transportation stocks.
While we acknowledge the potential of ALK as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
READ NEXT: Billionaire Kerr Neilson's 10 Stock Picks with Huge Upside Potential and .
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