As airlines continue to release their third-quarter results, Alaska Airlines, too, has joined the list and has released some impressive numbers. The carrier recently acquired Hawaiian Airlines and its Q3 results also include a little over two weeks of Hawaiian’s numbers, too.
Leading the industry with adjusted pretax margin
Alaska Airlines has released its financial results for the third quarter and has reported a net income of $236 million, translating into $1.84 earnings per share. Notably, its adjusted pretax margin of 13.0% leads the industry and highlights the strength of its business model.
Alaska recent numbers also show a year-on-year improvement, as the airline reported a net income of $139 million, or $1.08 per share, for the third quarter of 2023. During this quarter, Alaska Airlines also repurchased 367,705 shares of common stock for approximately $14 million, accounting for total repurchases to $63 million for the nine months ending on September 30.
Photo: Wenjie Zheng | Shutterstock
Costs in Q3 were according to previous estimates, with some pressure arising from capacity constraints due to delays in aircraft delivery. The company said that it is currently experiencing the lowest attrition rates since 2019, and despite some cost pressures, its productivity for the quarter improved 4.6% year over year.
Alaska Airlines ended the last quarter with a total liquidity of $3.4 billion. This included around $850 million in undrawn lines of credit. After the quarter ended, Alaska also raised $2.0 billion in Term Loan B and Bond debt collateralized by Alaska’s Mileage Plan program.
Hawaiian’s performance was also included briefly
Alaska Airlines acquired Hawaiian Airlines last quarter, although the full integration work is still underway. The formal process was completed on September 18, and, as a result, Alaska’s current financial numbers also include 13 days of Hawaiian Airlines results. Andrew Harrison, Chief Commercial Officer, Alaska Airlines, commented,
“… We are investing in our commercial engine to compete more effectively with the larger carriers, increase loyalty among our guests and realize synergies from both our commercial and cargo businesses. These investments include re-imagined lounge and onboard offerings designed to meet the needs of our most loyal guests, optimized route networks that get people to more places in less time, a seamless booking to boarding experience, and more.”
Photo: Angel DiBilio | Shutterstock
Hawaiian has seen some ups and downs in the last few quarters. It reported significant losses in the fourth quarter of 2023 and then turned EBITDAR positive in this year’s second quarter. It could have break-even pre-tax results in the next quarter.
Big plans
In terms of its performance, Alaska Airlines provided reliable service through peak travel times in the summer, with a schedule completion rate of 99.2%. Going forward, Alaska plans to finish the year among the top 3 pretax margin producers in the industry for the full year.
Photo: Ian Dewar Photography | Shutterstock
It also expects to finish with earnings per share (EPS) above the midpoint of its previous guidance of $3.50 to $4.50 per share for the full year, which would include Hawaiian’s results as well. The airline will hold its Investor Day on December 10, where it will further highlight its vision.
Source: Simple Flying
