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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 10-Q
 

☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024
 
OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the transition period from                      to                      

Commission File Number 1-8957

ALASKA AIR GROUP, INC.
 
Delaware91-1292054
(State of Incorporation)(I.R.S. Employer Identification No.)
19300 International Boulevard,Seattle,WA98188
Telephone:(206)392-5040
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTicker SymbolName of each exchange on which registered
Common stock, $0.01 par value ALKNew York Stock Exchange
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐ 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange
Act.
Large accelerated filer☒Accelerated filer  ☐Non-accelerated filer   
(Do not check if a smaller reporting company)		☐Smaller reporting company   ☐Emerging growth company   ☐

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒
 
The registrant has 126,159,173 common shares, par value $0.01, outstanding at July 31, 2024.

This document is also available on our website at https://investor.alaskaair.com.


ALASKA AIR GROUP, INC.
FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2024

 TABLE OF CONTENTS

As used in this Form 10-Q, the terms “Air Group,” the “Company,” “our,” “we” and "us" refer to Alaska Air Group, Inc. and its subsidiaries, unless the context indicates otherwise. Alaska Airlines, Inc. and Horizon Air Industries, Inc. are referred to as “Alaska” and “Horizon” and together as our “airlines.”
 
2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
Cautionary Note Regarding Forward-Looking Statements
In addition to historical information, this Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or the Company’s present expectations.

You should not place undue reliance on our forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control. Our forward-looking statements are based on the information currently available to us and speak only as of the date on which this report was filed with the SEC. We expressly disclaim any obligation to issue any updates or revisions to our forward-looking statements, even if subsequent events cause our expectations to change regarding the matters discussed in those statements. For a discussion of our risk factors, see Item 1A. "Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023. 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. Please consider our forward-looking statements in light of those risks as you read this report.
3

PART I 
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
ALASKA AIR GROUP, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in millions)June 30, 2024December 31, 2023
ASSETS  
Current Assets  
Cash and cash equivalents$1,115 $281 
Marketable securities1,394 1,510 
Total cash and marketable securities2,509 1,791 
Receivables - net370 383 
Inventories and supplies - net106 116 
Prepaid expenses179 176 
Other current assets212 239 
Total Current Assets3,376 2,705 
Property and Equipment  
Aircraft and other flight equipment10,734 10,425 
Other property and equipment1,941 1,814 
Deposits for future flight equipment383 491 
 13,058 12,730 
Less accumulated depreciation and amortization4,537 4,342 
Total Property and Equipment - Net8,521 8,388 
Other Assets
Operating lease assets1,142 1,195 
Goodwill and intangible assets2,033 2,033 
Other noncurrent assets270 292 
Total Other Assets3,445 3,520 
Total Assets$15,342 $14,613 


4

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
(in millions, except share amounts)June 30, 2024December 31, 2023
LIABILITIES AND SHAREHOLDERS' EQUITY  
Current Liabilities  
Accounts payable$203 $207 
Accrued wages, vacation and payroll taxes513 584 
Air traffic liability1,576 1,136 
Other accrued liabilities852 800 
Deferred revenue1,312 1,221 
Current portion of operating lease liabilities153 158 
Current portion of long-term debt and finance leases359 353 
Total Current Liabilities4,968 4,459 
Long-Term Debt, Net of Current Portion2,313 2,182 
Noncurrent Liabilities  
Long-term operating lease liabilities, net of current portion1,050 1,125 
Deferred income taxes746 695 
Deferred revenue1,329 1,382 
Obligation for pension and post-retirement medical benefits358 362 
Other liabilities352 295 
Total Noncurrent Liabilities3,835 3,859 
Commitments and Contingencies (Note 7)
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: 2024 - 140,570,032 shares; 2023 - 138,960,830 shares, Outstanding: 2024 - 126,475,292 shares; 2023 - 126,090,353 shares
1 1 
Capital in excess of par value757 695 
Treasury stock (common), at cost: 2024 - 14,094,740 shares; 2023 - 12,870,477 shares
(868)(819)
Accumulated other comprehensive loss(287)(299)
Retained earnings4,623 4,535 
 4,226 4,113 
Total Liabilities and Shareholders' Equity$15,342 $14,613 

5

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in millions, except per share amounts)2024202320242023
Operating Revenue    
Passenger revenue$2,651 $2,598 $4,655 $4,582 
Mileage Plan other revenue174 170 338 324 
Cargo and other revenue72 70 136 128 
Total Operating Revenue2,897 2,838 5,129 5,034 
Operating Expenses  
Wages and benefits782 754 1,586 1,477 
Variable incentive pay49 57 93 104 
Aircraft fuel, including hedging gains and losses615 573 1,180 1,238 
Aircraft maintenance129 125 251 249 
Aircraft rent46 54 93 113 
Landing fees and other rentals173 167 338 319 
Contracted services106 95 203 190 
Selling expenses84 81 161 147 
Depreciation and amortization128 113 254 217 
Food and beverage service67 60 125 114 
Third-party regional carrier expense64 54 118 106 
Other186 182 391 359 
Special items - operating146 186 180 250 
Total Operating Expenses2,575 2,501 4,973 4,883 
Operating Income322 337 156 151 
Non-operating Income (Expense)  
Interest income24 22 41 39 
Interest expense(36)(28)(71)(56)
Interest capitalized6 7 12 14 
Special items - net non-operating— (6)— (6)
Other - net— (7)— (16)
Total Non-operating Expense(6)(12)(18)(25)
Income Before Income Tax316 325 138 126 
Income tax expense96 85 50 28 
Net Income$220 $240 $88 $98 
Basic Earnings Per Share:$1.74 $1.88 $0.70 $0.77 
Diluted Earnings Per Share:$1.71 $1.86 $0.69 $0.76 
Weighted Average Shares Outstanding used for computation: 
Basic126.337 127.440 126.153 127.470 
Diluted128.310 128.919 127.857 128.860 
6

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS (unaudited)
Three Months Ended June 30,Six Months Ended June 30,
(in millions)2024202320242023
Net Income$220 $240 $88 $98 
Other comprehensive income (loss), net of tax
Marketable securities4 (5)5 16 
Employee benefit plans3 4 6 8 
Interest rate derivative instruments— 1 1 (1)
        Total other comprehensive income, net of tax$7 $— $12 $23 
Total Comprehensive Income, Net of Tax$227 $240 $100 $121 




7

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited)
(in millions)Common Stock OutstandingCommon StockCapital in Excess of Par ValueTreasury StockAccumulated Other Comprehensive LossRetained EarningsTotal
Balance at December 31, 2023126.090 $1 $695 $(819)$(299)$4,535 $4,113 
Net loss— — — — — (132)(132)
Other comprehensive income— — — — 5 — 5 
Common stock repurchase(0.561)— — (21)— — (21)
Stock-based compensation— — 15 — — — 15 
Stock issued under stock plans0.177 — (3)— — — (3)
Balance at March 31, 2024125.706 $1 $707 $(840)$(294)$4,403 $3,977 
Net income— — — — — 220 220 
Other comprehensive income— — — — 7 — 7 
Common stock repurchase(0.663)— — (28)— — (28)
Stock-based compensation0.013 — 13 — — — 13 
Stock issued for employee stock purchase plan1.401 — 37 — — — 37 
Stock issued under stock plans0.018 — — — — — — 
Balance at June 30, 2024126.475 $1 $757 $(868)$(287)$4,623 $4,226 

(in millions)Common Stock OutstandingCommon StockCapital in Excess of Par ValueTreasury StockAccumulated Other Comprehensive LossRetained EarningsTotal
Balance at December 31, 2022127.534 $1 $577 $(674)$(388)$4,300 $3,816 
Net loss— — — — — (142)(142)
Other comprehensive income— — — — 23 — 23 
Common stock repurchase(0.414)— — (18)— — (18)
Stock-based compensation— — 12 — — — 12 
Stock issued under stock plans0.123 — (2)— — — (2)
Balance at March 31, 2023127.243 $1 $587 $(692)$(365)$4,158 $3,689 
Net income— — — — — 240 240 
Other comprehensive income— — — — — — — 
Common stock repurchase(0.872)— — (39)— — (39)
Stock-based compensation0.017 — 26 — — — 26 
Stock issued for employee stock purchase plan0.924 — 34 — — — 34 
Stock issued under stock plans0.036 — 1 — — — 1 
Balance at June 30, 2023127.348 $1 $648 $(731)$(365)$4,398 $3,951 
8

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Six Months Ended June 30,
(in millions)20242023
Cash Flows from Operating Activities:  
Net Income$88 $98 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization254 217 
Stock-based compensation and other37 56 
Special items - operating— 238 
Changes in certain assets and liabilities:
Changes in deferred income taxes47 27 
Increase in accounts receivable(55)(55)
Increase in air traffic liability440 394 
Increase in deferred revenue38 80 
Other - net23 (223)
Net cash provided by operating activities872 832 
Cash Flows from Investing Activities:  
Property and equipment additions  
Aircraft and aircraft purchase deposits(380)(414)
Other flight equipment(63)(113)
Other property and equipment(144)(107)
Supplier proceeds162 — 
Purchases of marketable securities(163)(389)
Sales and maturities of marketable securities288 574 
Fleet transition133 (29)
Other investing activities32 (1)
Net cash used in investing activities(135)(479)
Cash Flows from Financing Activities:  
Proceeds from issuance of long-term debt, net of issuance costs279 — 
Long-term debt payments(149)(149)
Common stock repurchases(49)(57)
Other financing activities6 41 
Net cash provided by (used in) financing activities87 (165)
Net increase in cash and cash equivalents824 188 
Cash, cash equivalents, and restricted cash at beginning of period308 369 
Cash, cash equivalents, and restricted cash at end of the period$1,132 $557 
9

Six Months Ended June 30,
(in millions)20242023
Supplemental disclosure:
Cash paid during the period for:
Interest, net of amount capitalized$55 $42 
Income taxes, net of refunds received— 14 
Non-cash transactions:
Right-of-use assets acquired through operating leases34 120 
Operating leases converted to finance leases— 310 
Property and equipment acquired through the issuance of debt68 134 
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents1,115 536 
Restricted cash included in Other noncurrent assets
17 21 
Total cash, cash equivalents, and restricted cash at end of the period$1,132 $557 



10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)

NOTE 1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Basis of Presentation
 
The unaudited Condensed Consolidated Financial Statements include the accounts of Air Group, or the Company, and its primary subsidiaries, Alaska and Horizon. The unaudited Condensed Consolidated Financial Statements also include McGee Air Services (McGee), a ground services subsidiary of Alaska, and other immaterial business units. All intercompany balances and transactions have been eliminated. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information. Consistent with these requirements, this Quarterly Report on Form 10-Q does not include all the information required by GAAP for complete financial statements. It should be read in conjunction with the consolidated financial statements and accompanying notes in the Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, all adjustments have been made that are necessary to fairly present the Company’s financial position as of June 30, 2024 and the results of operations for the three and six months ended June 30, 2024 and 2023. Such adjustments were of a normal recurring nature. Certain rows, columns, figures, or percentages may not recalculate due to rounding.

In preparing these statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities, as well as the reported amounts of revenue and expenses, including impairment charges. Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, changes in global economic conditions, changes in the competitive environment, and other factors, operating results for the three and six months ended June 30, 2024 are not necessarily indicative of operating results for the entire year.

Flight 1282 and Boeing 737-9 MAX Grounding

As a result of the Flight 1282 accident and the subsequent grounding of Boeing 737-9 MAX (B737-9) aircraft, Air Group's operation and results in the first and second quarters were significantly impacted. The Company received compensation from Boeing to address the financial damages incurred as a result of the grounding. In the first quarter, Boeing paid Air Group $162 million in cash. In the second quarter, Boeing issued Air Group $61 million in supplier credit memos to be applied against future Boeing goods and services purchases.

Compensation received under the agreement is accounted for as a reduction in cost basis of certain B737-9 aircraft. The compensation is reflected within Aircraft and other flight equipment and Deposits for future flight equipment in the unaudited Condensed Consolidated Balance Sheets.

NOTE 2. PROPOSED ACQUISITION OF HAWAIIAN HOLDINGS, INC.

On December 2, 2023, the Company entered into a definitive agreement to acquire Hawaiian Holdings, Inc. (Hawaiian). The Company has agreed to pay Hawaiian's shareholders $18.00 per share, or approximately $1.0 billion, in cash for the outstanding shares of Hawaiian. In addition, the Company expects to assume Hawaiian's debt and lease obligations on the date of acquisition. The acquisition has been approved by Hawaiian's shareholders and is subject to final approval by various regulatory bodies.

On February 7, 2024, Air Group and Hawaiian each received a request for additional information and documentary material (the “Second Request”) from the Antitrust Division of the Department of Justice (the “DOJ”) in connection with the DOJ’s review of the acquisition. On March 27, 2024, Air Group and Hawaiian entered into a timing agreement with the DOJ pursuant to which they agreed, among other things, not to consummate the acquisition before 90 days following the date on which both parties have certified substantial compliance with the Second Request unless they have received written notice from the DOJ prior to the end of such 90-day period that the DOJ has closed its investigation of the acquisition.

On May 7, 2024, Air Group and Hawaiian certified substantial compliance with the Second Request. The certification of substantial compliance triggered the start of the 90-day period described in the prior paragraph, which was previously scheduled to expire on August 5, 2024. On July 29, 2024, Air Group and Hawaiian agreed with the DOJ to extend the Review Period until 12:01 a.m. Eastern Time on August 15, 2024.

In the three and six months ended June 30, 2024, the Company incurred integration costs of $30 million and $38 million, respectively, primarily consisting of professional services fees. These costs are included within Special items - operating in the
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unaudited Condensed Consolidated Statements of Operations. The Company expects to continue to incur integration costs as activities supporting the proposed acquisition continue.

NOTE 3. REVENUE

Ticket revenue is recorded as Passenger revenue, and represents the primary source of the Company's revenue. Also included in Passenger revenue is passenger ancillary revenue such as bag fees, on-board food and beverage, and certain revenue from the frequent flyer program. Mileage Plan other revenue includes brand and marketing revenue from the co-branded credit card and other partners, and certain interline frequent flyer revenue, net of commissions. Cargo and other revenue includes freight and mail revenue, and to a lesser extent, other ancillary revenue products such as lounge membership and certain commissions.

The level of detail within the Company’s unaudited Condensed Consolidated Statements of Operations and in this footnote depict the nature, amount, timing, and uncertainty of revenue and how cash flows are affected by economic and other factors.

Passenger Ticket and Ancillary Services Revenue

Passenger revenue recognized in the unaudited Condensed Consolidated Statements of Operations (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Passenger ticket revenue, net of taxes and fees$2,226 $2,207 $3,874 $3,855 
Passenger ancillary revenue135 123 243 227 
Mileage Plan passenger revenue290 268 538 500 
Total Passenger revenue$2,651 $2,598 $4,655 $4,582 

Mileage Plan Loyalty Program

Mileage Plan revenue included in the unaudited Condensed Consolidated Statements of Operations (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Mileage Plan passenger revenue$290 $268 $538 $500 
Mileage Plan other revenue174 170 338 324 
Total Mileage Plan revenue$464 $438 $876 $824 

Cargo and Other Revenue

Cargo and other revenue included in the unaudited Condensed Consolidated Statements of Operations (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Cargo revenue$36 $39 $64 $68 
Other revenue36 31 72 60 
Total Cargo and other revenue$72 $70 $136 $128 

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Air Traffic Liability and Deferred Revenue

Passenger ticket and ancillary services liabilities

The Company recognized Passenger revenue of $150 million and $103 million from the prior year-end air traffic liability balance for the three months ended June 30, 2024 and 2023, and $717 million and $588 million from the prior year-end air traffic liability balance for the six months ended June 30, 2024 and 2023.

Mileage Plan assets and liabilities

The Company records a receivable for amounts due from the affinity card partner and from other partners as mileage credits are sold until the payments are collected. The Company had $87 million of such receivables as of June 30, 2024 and $102 million as of December 31, 2023.

The table below presents a roll forward of the total frequent flyer liability (in millions):
Six Months Ended June 30,
20242023
Total Deferred Revenue balance at January 1$2,603 $2,497 
Travel miles and companion certificate redemption - Passenger revenue(508)(470)
Miles redeemed on partner airlines - Other revenue(67)(52)
Increase in liability for mileage credits issued613 602 
Total Deferred Revenue balance at June 30$2,641 $2,577 

NOTE 4. FAIR VALUE MEASUREMENTS

In determining fair value, there is a three-level hierarchy based on the reliability of the inputs used. Level 1 refers to fair values based on quoted prices in active markets for identical assets or liabilities. Level 2 refers to fair values estimated using significant other observable inputs and Level 3 refers to fair values estimated using significant unobservable inputs.

Fair Value of Financial Instruments on a Recurring Basis

As of June 30, 2024, cost basis and fair value for marketable securities were $1.4 billion. Differences in cost basis and fair value of marketable securities are primarily a result of changes in interest rates and general market conditions. Management does not believe any unrealized losses are the result of credit quality based on its evaluation of industry and duration exposure, credit ratings of the securities, liquidity profiles, and other observable information as of June 30, 2024.
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Fair values of financial instruments on the unaudited Condensed Consolidated Balance Sheets (in millions):
June 30, 2024December 31, 2023
Level 1Level 2TotalLevel 1Level 2Total
Assets
Marketable securities
U.S. government and agency securities$438 $— $438 $387 $— $387 
Equity mutual funds6 — 6 5 — 5 
Foreign government bonds— 10 10 — 10 10 
Asset-backed securities— 168 168 — 192 192 
Mortgage-backed securities— 91 91 — 115 115 
Corporate notes and bonds— 638 638 — 763 763 
Municipal securities— 43 43 — 38 38 
Total Marketable securities444 950 1,394 392 1,118 1,510 
Derivative instruments
Fuel hedge contracts - call options— 6 6 — 11 11 
Interest rate swap agreements— 9 9 — 8 8 
Total Assets$444 $965 $1,409 $392 $1,137 $1,529 

The Company uses the market and income approach to determine the fair value of marketable securities. U.S. government securities and equity mutual funds are Level 1 as the fair value is based on quoted prices in active markets. Foreign government bonds, asset-backed securities, mortgage-backed securities, corporate notes and bonds, and municipal securities are Level 2 as the fair value is based on standard valuation models that are calculated based on observable inputs such as quoted interest rates, yield curves, credit ratings of the security and other observable market information.

The Company uses the market approach and the income approach to determine the fair value of derivative instruments. The fair value for fuel hedge call options is determined utilizing an option pricing model based on inputs that are readily available in active markets or can be derived from information available in active markets. In addition, the fair value considers the exposure to credit losses in the event of non-performance by counterparties. Interest rate swap agreements are Level 2 as the fair value of these contracts are determined based on the difference between the fixed interest rate in the agreements and the observable interest SOFR-based forward rates at period end multiplied by the total notional value.

Activity and Maturities for Marketable Securities

Maturities for marketable securities (in millions):
June 30, 2024Cost BasisFair Value
Due in one year or less$600 $592 
Due after one year through five years785 758 
Due after five years through ten years29 26 
Due after 10 years13 12 
No maturity date4 6 
Total$1,431 $1,394 

Fair Value of Other Financial Instruments

The Company uses the following methods and assumptions to determine the fair value of financial instruments that are not recognized at fair value as described below.

Cash, Cash Equivalents, and Restricted Cash: Cash equivalents consist of highly liquid investments with original maturities of three months or less, such as money market funds, commercial paper, and certificates of deposit. They are carried at cost, which approximates fair value.

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The Company's restricted cash balances are primarily used to guarantee various letters of credit, self-insurance programs, or other contractual rights. Restricted cash consists of highly liquid securities with original maturities of three months or less. They are carried at cost, which approximates fair value.

Debt: To estimate the fair value of all fixed-rate debt as of June 30, 2024, the Company uses the income approach by discounting cash flows or estimation using quoted market prices, utilizing borrowing rates for comparable debt over the remaining life of the outstanding debt. The estimated fair value of the fixed-rate Enhanced Equipment Trust Certificate (EETC) debt is Level 2, as it is estimated using observable inputs, while the estimated fair value of $601 million of other fixed-rate debt, including PSP notes payable, is classified as Level 3, as it is not actively traded and is valued using discounted cash flows which is an unobservable input.

Fixed-rate debt on the unaudited Condensed Consolidated Balance Sheets and the estimated fair value of long-term fixed-rate debt (in millions):
June 30, 2024December 31, 2023
Fixed-rate debt$1,447 $1,515 
Estimated fair value$1,367 $1,382 

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are recognized or disclosed at fair value on a nonrecurring basis, including property, plant and equipment, operating and finance lease assets, goodwill, and intangible assets. These assets are subject to fair valuation when there is evidence of impairment. No material impairments were recorded during the three and six months ended June 30, 2024.


NOTE 5. LONG-TERM DEBT
 
Long-term debt obligations on the unaudited Condensed Consolidated Balance Sheets (in millions):
 June 30, 2024December 31, 2023
Fixed-rate notes payable due through 2029$68 $80 
Fixed-rate PSP notes payable due through 2031600 600 
Fixed-rate EETC payable due through 2025 & 2027779 835 
Variable-rate notes payable due through 20361,239 971 
Less debt issuance costs(14)(15)
Total debt2,672 2,471 
Less current portion(a)
(359)(289)
Long-term debt, less current portion$2,313 $2,182 
Weighted-average fixed-interest rate3.3 %3.4 %
Weighted-average variable-interest rate6.9 %6.8 %
(a) Excludes finance lease liabilities recognized within Current portion of long-term debt and finance leases in the unaudited Condensed Consolidated Balance Sheets as of December 31, 2023.

Approximately $223 million of the Company's total variable-rate notes payable are effectively fixed via interest rate swaps at June 30, 2024, resulting in an effective weighted-average interest rate for the full debt portfolio of 4.7%.

During the six months ended June 30, 2024, the Company incurred debt of $348 million from multiple lenders and sources. New debt includes proceeds of $280 million, secured by a combination of aircraft and flight simulators. Additionally, $68 million was incurred as part of an agreement to finance certain E175 deliveries. Debt from this agreement is reflected as a non-cash transaction within the supplemental disclosures in the unaudited Condensed Consolidated Statements of Cash Flows. During the six months ended June 30, 2024, the Company made debt payments of $149 million.

Subsequent to quarter end, the Company incurred debt of $67 million, secured by aircraft.
15

Debt Maturity

At June 30, 2024, long-term debt principal payments for the next five years and thereafter are as follows (in millions):
 Total
Remainder of 2024$164 
2025385 
2026342 
2027666 
2028176 
Thereafter953 
Total Principal Payments$2,686 

Bank Lines of Credit
 
Alaska has three credit facilities totaling $626 million as of June 30, 2024. One credit facility is for $150 million, expires in April 2028, and is secured by certain accounts receivable, spare engines, spare parts, and ground service equipment. A second credit facility is for $400 million, expires in June 2026, and is secured by aircraft. Both facilities have variable interest rates based on SOFR plus a specified margin. A third credit facility is for $76 million, expires in June 2025, and is secured by aircraft.

Alaska has secured letters of credit against the third facility. All credit facilities have a requirement to maintain a minimum unrestricted cash and marketable securities balance of $500 million. Alaska was in compliance with this covenant at June 30, 2024.

NOTE 6. EMPLOYEE BENEFIT PLANS

Net periodic benefit costs for qualified defined-benefit plans include the following (in millions):
Three Months Ended June 30,Six Months Ended June 30,
 2024202320242023
Service cost$7 $7 $14 $14 
Pension expense included in Wages and benefits7 7 14 14 
Interest cost27 27 54 54 
Expected return on assets(32)(29)(64)(57)
Recognized actuarial loss4 6 9 12 
Pension expense (benefit) included in Non-operating Income$(1)$4 $(1)$9 
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NOTE 7. COMMITMENTS AND CONTINGENCIES

Boeing has communicated to Alaska that certain B737 aircraft are expected to be delivered later than the contracted delivery dates. This includes certain B737-8 and B737-9 aircraft contracted for delivery in 2024 that have been moved to 2025, as well as certain B737-10 aircraft contracted for delivery in 2025 that have been moved to 2026, pending certification of the B737-10. The Company has incorporated these adjustments in the tables below, however, management expects that additional Boeing aircraft deliveries may also be delayed beyond what is depicted in the tables.

Future minimum contractual payments for commitments as of June 30, 2024 (in millions):
Aircraft-Related Commitments(a)
Capacity Purchase Agreements and Other Obligations (b)
Remainder of 2024$864 $119 
20251,064 242 
20261,186 235 
20271,100 231 
2028151 234 
Thereafter715 658 
Total$5,080 $1,719 
(a)Includes contractual commitments for aircraft, engines, and aircraft maintenance. Option deliveries are excluded from minimum commitments until exercise.
(b)Excludes lease costs associated with capacity purchase agreements.

Aircraft Commitments

Aircraft purchase commitments include contractual commitments for aircraft and engines. Details for contractual aircraft commitments as of June 30, 2024 are outlined below.
Firm OrdersOptions and Other RightsTotal
Aircraft Type2024-20272026-20302024-2030
B73772105177
E1756410
   Total78109187

Aircraft Maintenance

Aircraft maintenance commitments include contractual commitments for engine maintenance agreements requiring monthly payments based upon utilization, such as flight hours, cycles, and age of the aircraft. In turn, these maintenance agreements transfer certain risks to the third-party service provider. Alaska has contracts for maintenance on its B737-800 and B737-900ER aircraft engines through 2026 and 2032, respectively. Horizon has contracts for maintenance on its E175 aircraft engines through 2033 and 2039.

Contingencies

The Company is a party to routine litigation matters incidental to its business and with respect to which no material liability is expected. Liabilities for litigation related contingencies are recorded when a loss is determined to be probable and estimable.

17
As part of the 2016 acquisition of Virgin America, Alaska assumed responsibility for the Virgin trademark license agreement with the Virgin Group. In 2019, pursuant to that agreement's venue provision, the Virgin Group sued Alaska in England, alleging that the agreement requires Alaska to pay $8 million per year as a minimum annual royalty through 2039, adjusted annually for inflation and irrespective of Alaska's actual use (or non-use) of the mark. Alaska stopped making royalty payments in 2019 after ending all use of the Virgin brand. On February 16, 2023, the commercial court issued a ruling adopting Virgin Group’s interpretation of the license agreement. The Company appealed the decision. On June 11, 2024, the appellate court issued a final decision affirming the lower court ruling in favor of the Virgin Group. Alaska also commenced a separate claim for breach of the agreement against the Virgin Group that may affect the Company’s total liability in the matter. Alaska recorded an accrual in the second quarter of 2024 for $45 million, representing the expenses associated with the trademark license agreement between January 2020 and June 2024. The expense is classified within Special items – operating in the unaudited Condensed Consolidated Statements of Operations.

On April 15, 2024, a private antitrust action captioned Warren Yoshimoto, et al., v. Alaska Airlines, Inc., et al. was filed in the United States District Court for the District of Hawaii, against Alaska Airlines, Inc. and Alaska Air Group, Inc. The plaintiffs, whom the complaint describes as airline passengers, allege that the pending acquisition of Hawaiian Airlines, Inc. by Alaska Airlines, Inc. would violate U.S. antitrust laws. They seek to enjoin the merger or obtain divestitures, as well as costs and attorneys’ fees. The Company believes the allegations in the complaint are without merit and will defend against them vigorously, while continuing to work cooperatively with the U.S. Department of Justice to obtain regulatory clearance to close the acquisition.

NOTE 8. SHAREHOLDERS' EQUITY

Common Stock Repurchase

In August 2015, the Board of Directors authorized a $1 billion share repurchase program. The Company repurchased 1.2 million shares for $49 million during the six months ended June 30, 2024 and 1.3 million shares for $57 million during the six months ended June 30, 2023. As of June 30, 2024, the Company has repurchased 12.3 million shares for $738 million, with $262 million remaining under this program.
CARES Act Warrant Issuances
As taxpayer protection required under the Payroll Support Program (PSP) under the CARES Act, the Company granted the U.S. Department of the Treasury a total of 1,455,437 warrants to purchase ALK common stock in 2020 and 2021. An additional 427,080 warrants were issued in conjunction with a draw on the CARES Act Loan in 2020. These warrants are non-voting, freely transferable, may be settled as net shares or in cash at the Company's option, and have a five-year term. The warrants were sold at auction in the second quarter of 2024 to a third party investor. The sale had no impact to the amount held on the Company's balance sheet.
As of June 30, 2024, there are 1,882,517 total warrants outstanding, with a weighted average strike price of $39.06. The value of the warrants was estimated using a Black-Scholes option pricing model. The total fair value of all outstanding warrants was $30 million, recorded in stockholders' equity at issuance.

NOTE 9. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding, including the dilutive effect of outstanding share-based instruments such as employee stock awards and warrants.
18
Three Months Ended June 30,Six Months Ended June 30,
(in millions, except per share amounts)
2024202320242023
Net income$220 $240 $88 $98 
Basic weighted average shares outstanding
126.337 127.440 126.153 127.470 
Dilutive effect of employee stock awards1.627 1.066 1.421 0.962 
Dilutive effect of stock warrants0.346 0.413 0.283 0.428 
Diluted weighted average shares outstanding
128.310 128.919 127.857 128.860 
Basic earnings per share$1.74 $1.88 $0.70 $0.77 
Diluted earnings per share$1.71 $1.86 $0.69 $0.76 
Antidilutive amounts excluded from calculation:
Employee stock awards1.1 1.7 1.9 2.1 
Stock warrants0.2 0.1 0.2 0.1 


NOTE 10. ACCUMULATED OTHER COMPREHENSIVE LOSS
A roll forward of the amounts included in accumulated other comprehensive loss is shown below for the three and six months ended June 30, 2024 and 2023:
(in millions)Marketable SecuritiesEmployee Benefit PlanInterest Rate DerivativesTax EffectTotal
Balance at March 31, 2024$(45)$(354)$9 $96 $(294)
Change in value6 — — — 6 
Reclassifications into earnings— 4 — (3)1 
Balance at June 30, 2024$(39)$(350)$9 $93 $(287)
Balance at December 31, 2023$(46)$(358)$8 $97 $(299)
Change in value7 — 1 — 8 
Reclassifications into earnings— 8 — (4)4 
Balance at June 30, 2024$(39)$(350)$9 $93 $(287)

Marketable SecuritiesEmployee Benefit PlanInterest Rate DerivativesTax EffectTotal
Balance at March 31, 2023$(78)$(416)$12 $117 $(365)
Change in value(9)— 2 1 (6)
Reclassifications into earnings3 5 — (2)6 
Balance at June 30, 2023$(84)$(411)$14 $116 $(365)
Balance at December 31, 2022(104)(421)15 122 (388)
Change in value11 — (1)(2)8 
Reclassifications into earnings9 10 — (4)15 
Balance at June 30, 2023$(84)$(411)$14 $116 $(365)

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NOTE 11. OPERATING SEGMENT INFORMATION

Alaska Air Group has two operating airlines – Alaska and Horizon. Each is regulated by the U.S. Department of Transportation’s Federal Aviation Administration. Alaska has CPAs for regional capacity with Horizon and SkyWest, under which Alaska receives all passenger revenue.

Under GAAP, operating segments are defined as components of a business for which there is discrete financial information that is regularly assessed by the Chief Operating Decision Maker (CODM) in making resource allocation decisions. Historically, our CODM has reviewed financial performance information for our airline operations and the Horizon CPA as part of three reportable operating segments:
•Mainline - includes scheduled air transportation on Alaska's Boeing jet aircraft for passengers and cargo throughout the U.S., and in parts of Canada, Mexico, Costa Rica, Belize, Guatemala, and the Bahamas.
•Regional - includes Horizon's and other third-party carriers’ scheduled air transportation for passengers across a shorter distance network within the U.S., Canada, and Mexico under a CPA. This segment includes the actual revenue and expenses associated with regional flying, as well as an allocation of corporate overhead incurred by Air Group on behalf of the regional operations.
•Horizon - includes the capacity sold to Alaska under CPA. Expenses include those typically borne by regional airlines such as crew costs, ownership costs and maintenance costs.

In addition to these reported segments, the Company has a "Consolidating and Other" column which reflects Air Group parent company activity, McGee Air Services, consolidating entries and other immaterial business units of the Company. The “Air Group Adjusted” column represents a non-GAAP measure that is used by the Company's CODM to evaluate performance and allocate resources. Adjustments are further explained below in reconciling to consolidated GAAP results.

Over time, our Mainline and Regional airline segments have increasingly been managed as a single component that provides scheduled air transportation for passengers and cargo, and includes our loyalty program. Managing this component in an integrated manner enables our team to leverage our comprehensive network, single route scheduling system, and fleet as a single business to deliver optimized consolidated financial results. In 2024, management began evaluating changes to internal reporting that may change the discrete information that is provided to our CODM in the future to better align with the way the business is managed. Such changes may have an impact on the Company’s reportable segments once finalized. The Company will continue to report using the existing segment structure until changes in our internal reporting have been fully implemented, and a segment analysis has been performed to determine if any changes to reportable segments are indicated.


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Operating segment information is as follows (in millions):
Three Months Ended June 30, 2024
MainlineRegionalHorizon
Consolidating & Other(a)
Air Group Adjusted(b)
Special Items(c)
Consolidated
Operating Revenue   
Passenger revenue$2,188 $463 $— $— $2,651 $— $2,651 
CPA revenue— — 112 (112)— — — 
Mileage Plan other revenue160 14 — — 174 — 174 
Cargo and other revenue69 — — 3 72 — 72 
Total Operating Revenue2,417 477 112 (109)2,897 — 2,897 
Operating Expenses
Operating expenses, excluding fuel1,516 322 92 (116)1,814 146 1,960 
Fuel expense520 100 — — 620 (5)615 
Total Operating Expenses2,036 422 92 (116)2,434 141 2,575 
Non-operating Income (Expense)6 — (12)— (6)— (6)
Income (Loss) Before Income Tax$387 $55 $8 $7 $457 $(141)$316 
Pretax Margin15.8 %10.9 %
Three Months Ended June 30, 2023
MainlineRegionalHorizon
Consolidating & Other(a)
Air Group Adjusted(b)
Special Items(c)
Consolidated
Operating Revenue
Passenger revenue$2,209 $389 $— $— $2,598 $— $2,598 
CPA revenue— — 92 (92)— — — 
Mileage Plan other revenue158 12 — — 170 — 170 
Cargo and other revenue67 — — 3 70 — 70 
Total Operating Revenue2,434 401 92 (89)2,838 — 2,838 
Operating Expenses
Operating expenses, excluding fuel1,468 279 87 (92)1,742 186 1,928 
Fuel expense490 81 — 1 572 1 573 
Total Operating Expenses1,958 360 87 (91)2,314 187 2,501 
Non-operating Income (Expense)3 — (10)1 (6)(6)(12)
Income (Loss) Before Income Tax$479 $41 $(5)$3 $518 $(193)$325 
Pretax Margin18.3 %11.5 %

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Six Months Ended June 30, 2024
MainlineRegionalHorizon
Consolidating & Other(a)
Air Group Adjusted(b)
Special Items(c)
Consolidated
Operating Revenue   
Passenger revenue$3,817 $838 $— $— $4,655 $— $4,655 
CPA revenue— — 216 (216)— — — 
Mileage Plan other revenue309 29 — — 338 — 338 
Cargo and other revenue131 — — 5 136 — 136 
Total Operating Revenue4,257 867 216 (211)5,129 — 5,129 
Operating Expenses
Operating expenses, excluding fuel3,030 621 180 (218)3,613 180 3,793 
Fuel expense1,005 193 — — 1,198 (18)1,180 
Total Operating Expenses4,035 814 180 (218)4,811 162 4,973 
Non-operating Income (Expense)3 — (23)2 (18)— (18)
Income (Loss) Before Income Tax$225 $53 $13 $9 $300 $(162)$138 
Pretax Margin5.8 %2.7 %

Six Months Ended June 30, 2023
MainlineRegionalHorizon
Consolidating & Other(a)
Air Group Adjusted(b)
Special Items(c)
Consolidated
Operating Revenue
Passenger revenue$3,882 $700 $— $— $4,582 $— $4,582 
CPA revenue— — 170 (170)— — — 
Mileage Plan other revenue301 23 — — 324 — 324 
Cargo and other revenue124 — — 4 128 — 128 
Total Operating Revenue4,307 723 170 (166)5,034 — 5,034 
Operating Expenses
Operating expenses, excluding fuel2,858 535 171 (169)3,395 250 3,645 
Fuel expense1,051 166 — — 1,217 21 1,238 
Total Operating Expenses3,909 701 171 (169)4,612 271 4,883 
Non-operating Income (Expense)(3)— (18)2 (19)(6)(25)
Income (Loss) Before Income Tax$395 $22 $(19)$5 $403 $(277)$126 
Pretax Margin8.0 %2.5 %
(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.
(c)Includes special items and mark-to-market fuel hedge accounting adjustments.


Total assets were as follows (in millions):
June 30, 2024December 31, 2023
Mainline$20,674 $19,937 
Horizon1,383 1,352 
Consolidating & Other(6,715)(6,676)
Consolidated$15,342 $14,613 

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NOTE 12. SPECIAL ITEMS

The Company has classified certain operating and non-operating expenses as special items due to their unusual or infrequently occurring nature. The Company believes disclosing information about these items separately improves comparable year over year analysis and allows stakeholders to better understand our results of operations. A description of the special items is provided below.

Fleet transition: Costs are associated with the retirement and disposition of Airbus and Q400 aircraft.

Labor agreements: Costs are for the retroactive pay offered to Alaska flight attendants pursuant to the tentative agreement reached in the second quarter of 2024 and for changes to Alaska pilots' sick leave benefits resulting from an agreement signed in the first quarter of 2023.

Integration costs: Costs are associated with the proposed acquisition of Hawaiian Airlines.

Litigation: Costs represent expenses that were recognized following a negative appeal ruling in the second quarter of 2024 associated with the Virgin trademark license agreement with the Virgin Group.

Net non-operating: Costs are for interest expense associated with certain A321neo lease agreements which were modified as part of Alaska's fleet transition.

Three Months Ended June 30,Six Months Ended June 30,
(in millions)2024202320242023
Operating Expenses
Fleet transition$41 $186 $67 $199 
Labor agreements30 — 30 51 
Integration costs30 — 38 — 
Litigation45 — 45 — 
Special items - operating$146 $186 $180 $250 
Non-operating Income (Expense)
Special Items - net non-operating$— $(6)$— $(6)

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
OVERVIEW
 
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand our company and the present business environment. MD&A is provided as a supplement to – and should be read in conjunction with – our consolidated financial statements and the accompanying notes. All statements in the following discussion that are not statements of historical information or descriptions of current accounting policy are forward-looking statements. Please consider our forward-looking statements in light of the risks referred to in this report’s introductory cautionary note and the risks mentioned in "Item 1A. Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2023. This overview summarizes the MD&A, which includes the following sections:

•GAAP to Non-GAAP Reconciliations and Operating Statistics - reconciliations of reported non-GAAP financial measures to their most directly comparable financial measures reported on a GAAP basis, as well as operating statistics we use to measure operating performance.
 
•Second Quarter Review - highlights from the second quarter of 2024 outlining some of the major events that occurred during the period.
 
•Results of Operations - an in-depth analysis of our consolidated revenue and expenses for the three and six months ended June 30, 2024. This section includes forward-looking statements regarding our view of the remainder of 2024. 

•Liquidity and Capital Resources - an overview of our financial position, analysis of cash flows, and relevant contractual obligations and commitments.

GAAP TO NON-GAAP RECONCILIATIONS AND OPERATING STATISTICS
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 certain costs 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. 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 investors to understand the impact of company-specific cost drivers which are more controllable by management. We adjust for expenses related directly to our freighter aircraft operations to allow for better comparability to other domestic carriers that do not operate freighter aircraft. We also exclude certain special charges as they are unusual or nonrecurring in nature and adjusting for these expenses allows management and investors to better understand our cost performance.

•CASMex 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. CASMex is also 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.

•Adjusted pretax income is an important metric for the employee incentive plan, which covers the majority of Air Group employees.

•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 is important because it provides information on significant items that are not necessarily indicative of future performance. 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
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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.

Although we are presenting these non-GAAP amounts for the reasons above, investors and other readers should not consider them a substitute for GAAP figures. Amounts in the tables below are rounded to the nearest million. As a result, a manual recalculation of certain figures using these rounded amounts may not agree directly to the Company's actual figures presented in the tables below.

GAAP TO NON-GAAP RECONCILIATIONS (unaudited)
 Three Months Ended June 30,Six Months Ended June 30,
(in millions)2024202320242023
Income before income tax$316 $325 $138 $126 
Adjusted for:
Mark-to-market fuel hedge adjustment(5)1 (18)21 
Special items - operating146 186 180 250 
Special items - net non-operating— 6 — 6 
Adjusted income before income tax$457 $518 $300 $403 
Pretax margin10.9 %11.5 %2.7 %2.5 %
Adjusted pretax margin15.8 %18.3 %5.8 %8.0 %
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Three Months Ended June 30,
20242023
(in millions, except per share amounts)DollarsDiluted EPSDollarsDiluted EPS
Net income per share$220 $1.71 $240 $1.86 
Mark-to-market fuel hedge adjustments(5)(0.04)1 0.01 
Special items - operating146 1.14 186 1.44 
Special items - net non-operating— — 6 0.05 
Income tax effect of reconciling items above(34)(0.26)(46)(0.36)
Adjusted net income per share$327 $2.55 $387 $3.00 
Six Months Ended June 30,
20242023
(in millions, except per-share amounts)DollarsDiluted EPSDollarsDiluted EPS
Net income per share$88 $0.69 $98 $0.76 
Mark-to-market fuel hedge adjustments(18)(0.14)21 0.16 
Special items - operating180 1.41 250 1.94 
Special items - net non-operating— — 6 0.05 
Income tax effect of reconciling items above(39)(0.31)(67)(0.52)
Adjusted net income per share$211 $1.65 $308 $2.39 

 Three Months Ended June 30,Six Months Ended June 30,
(in millions)2024202320242023
Total operating expenses$2,575 $2,501 $4,973 $4,883 
Less the following components:
Aircraft fuel, including hedging gains and losses615 573 1,180 1,238 
Freighter costs13 12 28 26 
Special items - operating146 186 180 250 
Total operating expenses, excluding fuel, freighter costs, and special items$1,801 $1,730 $3,585 $3,369 
ASMs18,196 17,160 33,575 32,865 
CASMex9.89 ¢10.08 ¢10.67 ¢10.25 ¢

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OPERATING STATISTICS (unaudited)
Below are consolidated operating statistics we use to measure operating performance. We often refer to unit revenue and adjusted unit costs, which are non-GAAP measures.
Three Months Ended June 30,Six Months Ended June 30,
20242023Change20242023Change
Revenue passengers (000)11,88811,5923%21,66221,4441%
RPMs (000,000) "traffic"15,30914,9362%27,83327,4911%
ASMs (000,000) "capacity"18,19617,1606%33,57532,8652%
Load factor84.1%87.0%(2.9) pts82.9%83.6%(0.7) pts
Yield17.32¢17.40¢—%16.73¢16.67¢—%
PRASM14.57¢15.14¢(4)%13.86¢13.94¢(1)%
RASM15.92¢16.54¢(4)%15.28¢15.32¢—%
CASMex(a)
9.89¢10.08¢(2)%10.67¢10.25¢4%
Economic fuel cost per gallon(a)
$2.84$2.763%$2.95$3.07(4)%
Fuel gallons (000,000)2192076%4063963%
ASMs per fuel gallon83.182.9—%82.783.0—%
Departures (000)112.4104.48%208.1199.84%
Average full-time equivalent employees (FTEs)23,36823,301—%23,19023,140—%
Operating fleet(b)
32630719 a/c32630719 a/c
(a)Refer to reconciliation of this non-GAAP measure to the most directly related GAAP measure.
(b)Includes aircraft owned and leased by Alaska and Horizon as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excludes non-operating aircraft.


SECOND QUARTER REVIEW

Financial Overview

We reported consolidated pretax income for the second quarter of 2024 of $316 million, compared to $325 million in the prior year. Despite challenges in the domestic fare environment, the Company achieved record quarterly revenue of $2.9 billion due to growth in our premium cabins and the continued strength of our loyalty program. Total operating expenses increased $74 million compared to the prior year. While fuel costs rose year over year due to increased flying and higher per gallon costs, the Company's focus on managing its non-fuel operating costs led to CASMex improvement of nearly 2% compared to the prior year.

See “Results of Operations” below for further discussion of changes in revenue and operating expenses as compared to 2023. A glossary of financial terms can be found at the end of this Item 2.

Labor Updates

In June 2024, Alaska reached a tentative agreement with its flight attendants represented by the Association of Flight Attendants (AFA) for an updated collective bargaining agreement. Voting is expected to take place in mid-August. In the second quarter, we accrued $30 million which approximates the retroactive pay offered to flight attendants for the service period through June 30, 2024. This expense is classified within Special items - operating in the unaudited Condensed Consolidated Statements of Operations.

Horizon is in negotiations with certain labor groups for updated CBAs, including its pilots, represented by the International Brotherhood of Teamsters; its flight attendants, represented by AFA; and its technicians, represented by AMFA.
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Outlook

The following represents the Company's expectations for the third quarter and full year 2024 results. Full year adjusted EPS guidance has been lowered by $0.25 at the midpoint to reflect the economics of a newly signed tentative agreement with Alaska's flight attendants and a moderating domestic revenue environment.
Q3 Expectation
Capacity (ASMs) % change versus 2023Up 2% to 3%
CASMex % change versus 2023Up high single digits
RASM % change versus 2023Flat to positive
Economic fuel cost per gallon$2.85 to $2.95
Adjusted earnings per share(a)
$1.40 to $1.60
Full Year Expectation
Capacity (ASMs) % change versus 2023Up < 2.5%
Adjusted earnings per share(a)
$3.50 to $4.50
Capital expenditures$1.2 billion - $1.3 billion
(a) Adjusted earnings per share guidance assumes a full year tax rate of approximately 25%. Full year EPS guidance assumes an economic fuel cost per gallon of approximately $2.90 for FY 2024.


RESULTS OF OPERATIONS

COMPARISON OF THREE MONTHS ENDED JUNE 30, 2024 TO THREE MONTHS ENDED JUNE 30, 2023

OPERATING REVENUE

Total operating revenue increased $59 million, or 2%, in the second quarter of 2024 compared to the same period in 2023. The changes are summarized in the following table:
Three Months Ended June 30,
(in millions)20242023% Change
Passenger revenue$2,651 $2,598 2 %
Mileage Plan other revenue174 170 2 %
Cargo and other revenue72 70 3 %
Total Operating Revenue$2,897 $2,838 2 %

Passenger revenue

Passenger revenue for the second quarter of 2024 increased $53 million, or 2%, on a 2% increase in passenger traffic, partially offset by a slight decrease in yield. Passenger traffic growth was driven by increased gauge and departures throughout the network. Increased revenue from the premium cabins also contributed to the year over year improvement.

Mileage Plan other revenue

Mileage Plan other revenue for the second quarter of 2024 increased by $4 million, or 2%. The increase was driven by higher award redemption on partner airlines and incremental commissions from third party partners.

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OPERATING EXPENSES

Total operating expenses increased $74 million, or 3%, compared to the second quarter of 2023. We believe it is useful to summarize operating expenses as follows, which is consistent with the way expenses are reported internally and evaluated by management:
 Three Months Ended June 30,
(in millions)20242023% Change
Fuel expense$615 $573 7 %
Non-fuel operating expenses, excluding special items1,814 1,742 4 %
Special items - operating146 186 (22)%
Total Operating Expenses$2,575 $2,501 3 %

Fuel expense

Aircraft fuel expense includes raw fuel expense (as defined below) plus the effect of mark-to-market adjustments to our fuel hedge portfolio as the value of that portfolio increases and decreases. Our aircraft fuel expense can be volatile because it includes these gains or losses in the value of the underlying instrument as crude oil prices and refining margins increase or decrease. Raw fuel expense is defined as the price that we generally pay at the airport, or the “into-plane” price, including taxes and fees. Raw fuel prices are impacted by world oil prices and refining costs, which can vary by region in the U.S. Raw fuel expense approximates cash paid to suppliers and does not reflect the effect of our fuel hedges.

Aircraft fuel expense increased $42 million, or 7%, compared to the second quarter of 2023. The elements of the change are illustrated in the following table:
Three Months Ended June 30,
20242023
(in millions, except for per gallon amounts)Dollars Cost/GalDollars Cost/Gal
Raw or "into-plane" fuel cost$610 $2.79 $555 $2.68 
Losses on settled hedges10 0.05 17 0.08 
Economic fuel expense$620 $2.84 $572 $2.76 
Mark-to-market fuel hedge adjustments(5)(0.03)1 — 
Aircraft fuel, including hedging gains and losses$615 $2.81 $573 $2.76 
Fuel gallons219 207 

Raw fuel expense increased 10% in the second quarter of 2024 compared to the second quarter of 2023 due to higher fuel consumption and per gallon costs of crude oil, partially offset by a decrease in refining margins associated with the conversion of crude oil to jet fuel.

We also evaluate economic fuel expense, which we define as raw fuel expense adjusted for the cash we receive from hedge counterparties for hedges that settle during the period and for the premium expense that we paid for those contracts. A key difference between aircraft fuel expense and economic fuel expense is the timing of gain or loss recognition on our hedge portfolio. Economic fuel expense includes gains and losses only when they are realized for those contracts that were settled during the period based on their original contract terms. We believe this is the best measure of the effect that fuel prices are currently having on our business as it most closely approximates the net cash outflow associated with purchasing fuel for our operations. Accordingly, many industry analysts evaluate our results using this measure, and it is the basis for most internal management reporting and incentive pay plans.

Losses recognized for hedges that settled during the second quarter were $10 million in 2024, compared to losses of $17 million in the same period in 2023. These amounts represent cash paid for premium expense, offset by any cash received from those hedges at settlement. In 2023, we suspended our crude oil hedge program. Our final option position will settle in the first quarter of 2025.

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Non-fuel expenses

The table below provides the reconciliation of the operating expense line items, excluding fuel and special items. Significant operating expense variances from 2023 are more fully described below.
 Three Months Ended June 30,
(in millions)20242023% Change
Wages and benefits$782 $754 4 %
Variable incentive pay49 57 (14)%
Aircraft maintenance129 125 3 %
Aircraft rent46 54 (15)%
Landing fees and other rentals173 167 4 %
Contracted services106 95 12 %
Selling expenses84 81 4 %
Depreciation and amortization128 113 13 %
Food and beverage service67 60 12 %
Third-party regional carrier expense64 54 19 %
Other186 182 2 %
Total non-fuel operating expenses, excluding special items$1,814 $1,742 4 %

Wages and benefits

Wages and benefits increased by $28 million, or 4%, in the second quarter of 2024. The primary components of Wages and benefits are shown in the following table:
 Three Months Ended June 30,
(in millions)20242023% Change
Wages$592 $576 3 %
Payroll taxes44 44 — %
Medical and other benefits82 77 6 %
Defined contribution plans57 49 16 %
Pension - Defined benefit plans7 8 (13)%
Total Wages and benefits$782 $754 4 %

Wages increased $16 million, or 3%, driven by increased wage rates across multiple labor groups since the prior year. The increase was partially offset by certain nonrecurring stock awards granted in the second quarter of 2023.

The change in medical and other benefits was primarily driven by an increase in the cost of medical services compared to the prior year. Increased expense for defined contribution plans was driven by the change in wages as well as higher matching contributions for Alaska technicians.

Variable incentive pay

Variable incentive pay expense decreased by $8 million, or 14%, in the second quarter of 2024. The decrease was driven by a lower assumed payout percentage compared to the prior year, partially offset by an increased wage base.

Aircraft rent

Aircraft rent expense decreased by $8 million, or 15%, in the second quarter of 2024. The decrease was primarily driven by the retirement of ten leased A321neo aircraft fleet from operations since the second quarter of 2023.
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Landing fees and other rentals

Landing fees and other rentals increased by $6 million, or 4%, in the second quarter of 2024. Landing fees increased due to the volume of departures and landed weight. Increases to terminal rents were primarily due to growth throughout the network, but were largely offset by favorable settlements received during the quarter from certain airports.

Contracted services

Contracted services increased by $11 million, or 12%, in the second quarter of 2024, driven by higher rates charged by vendors as well as increased passengers throughout our network.

Depreciation and amortization

Depreciation and amortization increased by $15 million, or 13%, in the second quarter of 2024. The increase was primarily due to the addition of 22 owned B737 aircraft and five owned E175 aircraft to our fleet since the second quarter of 2023, as well as incremental depreciation on ground service and other equipment additions.

Food and beverage service

Food and beverage service increased by $7 million, or 12%, in the second quarter of 2024. The increase was driven by a combination of growth in revenue passengers, additional onboard offerings, and higher costs for food, food service supplies, and transportation.

Third-party regional carrier expense

Third-party regional carrier expense, which represents expenses associated with SkyWest under the CPA with Alaska, increased by $10 million, or 19%, in the second quarter of 2024. The increase in third-party regional carrier expense was driven by increased SkyWest-operated departures and block hours.

Special items - operating

We recorded $146 million of operating special items in the second quarter of 2024, compared to $186 million in the same period in 2023. Refer to Note 12 to the consolidated financial statements for details.

ADDITIONAL SEGMENT INFORMATION

Refer to Note 11 to the consolidated financial statements for a detailed description of each segment. Below is a summary of each segment's results.

Mainline

Mainline reported a pretax profit of $387 million in the second quarter of 2024, compared to a pretax profit of $479 million in the same period in 2023. The $92 million decrease was driven by a $17 million decrease in passenger revenue, a $48 million increase in non-fuel operating expenses, and a $30 million increase in economic fuel expense.

Compared to the prior year, lower Mainline revenue is primarily attributable to weaker ticket yield, driven by a moderating domestic pricing environment. Non-fuel operating expenses increased, driven by higher wage rates across multiple labor groups and higher variable costs associated with overall network growth. Increased economic fuel cost was driven by higher per gallon costs and incremental fuel consumption.

Regional

Regional reported a pretax profit of $55 million in the second quarter of 2024, compared to a pretax profit of $41 million in the same period in 2023. The $14 million improvement was driven by higher passenger revenue consistent with the increase in traffic, partially offset by higher operating expenses associated with increased capacity.

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Horizon

Horizon reported a pretax profit of $8 million in the second quarter of 2024, compared to a pretax loss of $5 million in the same period in 2023. The $13 million improvement was driven by increased revenue consistent with increased capacity sold to Alaska, partially offset by increased expenses driven by the addition of five owned E175 aircraft added to Horizon's fleet since the second quarter of 2023. Cost reductions resulting from Horizon's transition to single fleet also contributed to this improvement.

COMPARISON OF SIX MONTHS ENDED JUNE 30, 2024 TO SIX MONTHS ENDED JUNE 30, 2023

OPERATING REVENUE

Total operating revenue increased $95 million, or 2%, during the first six months of 2024 compared to the same period in 2023. The changes are summarized in the following table:
Six Months Ended June 30,
(in millions)20242023% Change
Passenger revenue$4,655 $4,582 2 %
Mileage Plan other revenue338 324 4 %
Cargo and other revenue136 128 6 %
Total Operating Revenue$5,129 $5,034 2 %

Passenger revenue

Passenger revenue for the first six months of 2024 increased by $73 million, or 2%, driven by increased passenger traffic. Traffic growth was due to increased gauge and departures throughout the network. Strength in premium class products and increased redemptions by Mileage Plan members on both Alaska and partner airlines also contributed to this increase. These improvements were offset by lost revenue from the B737-9 grounding as well as a moderating domestic revenue environment in the second quarter.

We expect to see Passenger revenue growth for the remainder of 2024 compared to 2023 as a result of capacity growth plans, strength in the premium cabins, and continued recovery of corporate travel.

Mileage Plan other revenue

Mileage Plan other revenue increased $14 million, or 4%, in the first six months of 2024. The increase was driven by higher commissions from bank card and third party partners.

We expect to see continued strength in Mileage Plan other revenue for the remainder of 2024, driven by higher commissions from increased card spend and acquisition bonuses, offset by incremental redemption on other air partners as compared to the prior year.

OPERATING EXPENSES

Total operating expenses increased $90 million, or 2%, compared to the first six months of 2023. We believe it is useful to summarize operating expenses as follows, which is consistent with the way expenses are reported internally and evaluated by management:
 Six Months Ended June 30,
(in millions)20242023% Change
Fuel expense$1,180 $1,238 (5)%
Non-fuel operating expenses, excluding special items3,613 3,395 6 %
Special items - operating180 250 (28)%
Total Operating Expenses$4,973 $4,883 2 %

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Fuel expense

Aircraft fuel expense decreased $58 million, or 5%, compared to the six months ended June 30, 2023. The elements of the change are illustrated in the table:
 
Six Months Ended June 30,
20242023
(in millions, except for per gallon amounts)Dollars Cost/GalDollars Cost/Gal
Raw or "into-plane" fuel cost$1,175 $2.89 $1,188 $3.00 
(Gain)/loss on settled hedges23 0.06 29 0.07 
Consolidated economic fuel expense$1,198 $2.95 $1,217 $3.07 
Mark-to-market fuel hedge adjustments(18)(0.05)21 0.05 
GAAP fuel expense$1,180 $2.90 $1,238 $3.12 
Fuel gallons406 396 

Raw fuel expense decreased 1% in the first six months of 2024 compared to the first six months of 2023. While fuel consumption and per gallon costs of crude oil were higher, these increases were more than offset by lower refining margins.

Economic fuel expense includes losses recognized for hedges that settled in the first six months of 2024 of $23 million, compared to losses of $29 million in the same period in 2023. These amounts represent cash paid for premium expense, offset by any cash received from those hedges at settlement.

We expect our economic fuel cost per gallon in the third quarter to range between $2.85 to $2.95.

Non-fuel expenses
 Six Months Ended June 30,
(in millions)20242023% Change
Wages and benefits$1,586 $1,477 7 %
Variable incentive pay93 104 (11)%
Aircraft maintenance251 249 1 %
Aircraft rent93 113 (18)%
Landing fees and other rentals338 319 6 %
Contracted services203 190 7 %
Selling expenses161 147 10 %
Depreciation and amortization254 217 17 %
Food and beverage service125 114 10 %
Third-party regional carrier expense118 106 11 %
Other391 359 9 %
Total non-fuel operating expenses, excluding special items$3,613 $3,395 6 %

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Wages and benefits

Wages and benefits increased by $109 million, or 7%, in the first six months of 2024. The primary components of wages and benefits are shown in the following table:
 Six Months Ended June 30,
(in millions)20242023% Change
Wages$1,201 $1,134 6 %
Payroll taxes88 85 4 %
Medical and other benefits165 143 15 %
Defined contribution plans118 100 18 %
Pension - Defined benefit plans14 15 (7)%
Total Wages and benefits$1,586 $1,477 7 %

Wages increased $67 million, or 6%, driven by increased wage rates across multiple labor groups since the prior year, as well as additional impact from irregular operations following the B737-9 grounding in the first quarter of 2024. The increase was partially offset by nonrecurring stock awards granted in the second quarter of 2023. Increased expense for payroll taxes is consistent with the change in wages.

The change in medical and other benefits was primarily driven by an increase in the cost of medical services compared to the prior year. Increased expense for defined contribution plans was driven by the change in wages as well as higher matching contributions for Alaska technicians.

We expect to see higher wages and benefits for the remainder of 2024 due to the impact of the new contract for Alaska flight attendants as well as increases in wage rates for other labor groups.

Variable incentive pay

Variable incentive pay expense decreased by $11 million, or 11%, in the first six months of 2024. The decrease was driven by a lower assumed payout percentage compared to the prior year, partially offset by an increased wage base.

Aircraft rent

Aircraft rent expense decreased by $20 million, or 18%, in the first six months of 2024. The decrease was primarily driven by the retirement of ten leased A321neo aircraft from operations.

We expect aircraft rent will remain below 2023 levels for the remainder of 2024, due to the reduction in leased aircraft described above.

Landing fees and other rentals

Landing fees and other rentals increased by $19 million, or 6%, in the first six months of 2024. Higher terminal rent costs were due to rate and volume increases at many of our facilities. Landing fees increased due to the volume of departures and landed weight.

We expect landing fees and other rentals to increase for the remainder of 2024 as compared to 2023 due to higher rates at airports and a greater volume of flying.

34
Contracted services

Contracted services increased by $13 million, or 7%, in the first six months of 2024, driven by higher rates charged by vendors as well as increased passengers throughout our network.

We expect contracted services to increase for the remainder of 2024 as compared to 2023 due to the same factors described above.

Selling expenses

Selling expenses increased by $14 million, or 10%, in the first six months of 2024. The increase was driven by incremental credit card commissions and additional marketing costs.

We expect selling expenses to increase for the remainder of 2024 as compared to 2023, primarily due to incremental credit card commissions, partially offset by the timing of certain marketing campaigns in the respective years.

Depreciation and amortization

Depreciation and amortization increased by $37 million, or 17%, in the first six months of 2024. The increase was primarily due to the addition of 22 owned B737 aircraft and five owned E175 aircraft to our fleet since the second quarter of 2023, as well as incremental depreciation on ground service and other equipment additions.

We expect depreciation and amortization to increase for the remainder of 2024 as compared to 2023 due to incremental owned aircraft added to our fleet.

Food and beverage service

Food and beverage service increased by $11 million, or 10%, in the first six months of 2024. The increase was driven by a combination of additional onboard offerings and higher costs for food, food service supplies, and transportation.

We expect food and beverage service costs to increase for the remainder of 2024 as compared to 2023 due to the same factors described above.

Third-party regional carrier expense

Third-party regional carrier expense, which represents payments made to SkyWest under the CPA with Alaska, increased $12 million, or 11%, in the first six months of 2024. The increase was driven by incremental departures and block hours operated by SkyWest.

We expect third-party regional carrier expense will continue to be higher for the remainder of 2024 as compared to 2023 due to the same factors described above.

Other expense

Other expense increased $32 million, or 9%, in the first six months of 2024. The increase was primarily driven by passenger remuneration and crew hotel costs due to the B737-9 grounding. Additional software costs and other miscellaneous services also contributed to this increase.

We expect other expense will continue to be higher for the remainder of 2024 as compared to 2023 due to the same factors described above.

Special items - operating

We recorded $180 million of operating special items in the first six months of 2024, compared to $250 million in the same period in 2023. Refer to Note 12 to the consolidated financial statements for additional details.

ADDITIONAL SEGMENT INFORMATION
35

Refer to Note 11 to the consolidated financial statements for a detailed description of each segment. Below is a summary of each segment's results.

Mainline

Mainline reported a pretax profit of $225 million in the first six months of 2024, compared to a pretax profit of $395 million in the same period in 2023. The $170 million decrease was driven by a $172 million increase in non-fuel operating expenses, including increased wage rates across multiple labor groups and higher variable costs associated with overall network growth. The $50 million decrease in Mainline operating revenue also contributed to lower pretax profit, driven by decreased passenger revenue following the B737-9 grounding in the first quarter and decreased yield. A lower average per gallon fuel cost lessened the negative impact of these items.

Regional

Regional reported a pretax profit of $53 million in the first six months of 2024, compared to a pretax profit of $22 million in the same period in 2023. The $31 million improvement was driven by higher passenger revenue consistent with the increase in traffic, partially offset by higher operating expenses driven by increased capacity.

Horizon

Horizon reported a pretax profit of $13 million in the first six months of 2024, compared to a pretax loss of $19 million in the same period in 2023. The $32 million improvement was driven by incremental revenue consistent with increased capacity sold to Alaska, partially offset by increased expenses driven by the addition of five owned E175 aircraft added to Horizon's fleet since the second quarter of 2023. Cost reductions resulting from Horizon's transition to single fleet also contributed to this improvement.

LIQUIDITY AND CAPITAL RESOURCES
 
Our primary sources of liquidity as of June 30, 2024 are:

•Existing cash and marketable securities of $2.5 billion;

•Cash flows from operations in the first six months of 2024 of $872 million;

•Combined bank line-of-credit facilities, with no outstanding borrowings, of $550 million;

•Our Mileage Plan program and 69 unencumbered aircraft which could be financed, if necessary.

During the three months ended June 30, 2024, we took free and clear delivery of six owned B737-9 aircraft and three owned B737-8 aircraft. We incurred new debt of $153 million and made debt payments of $47 million. We ended the quarter with a debt-to-capitalization ratio of 45%, within our target range of 40% to 50%.

In the second quarter, we continued share repurchases, spending $28 million, pursuant to the $1 billion repurchase plan authorized by the Board of Directors in August 2015. We also purchased a 600,000 square-foot facility in Renton, Washington for $86 million. Alaska plans to invest an additional $100 million to renovate the property, which will serve as the future home for our training programs and operational teams following completion of renovations in 2025.

We believe that our current cash and marketable securities balance, combined with available sources of liquidity, will be sufficient to fund our operations, meet our debt payment obligations, and remain in compliance with the financial debt covenants in existing financing arrangements for the foreseeable future.

In our cash and marketable securities portfolio, we invest only in securities that meet our primary investment strategy of maintaining and securing investment principal. The portfolio is managed by reputable firms that adhere to our investment policy that sets forth investment objectives, approved and prohibited investments, and duration and credit quality guidelines. Our policy, and the portfolio managers, are continually reviewed to ensure that the investments are aligned with our strategy.
36

The table below presents the major indicators of financial condition and liquidity:
(in millions)June 30, 2024December 31, 2023Change
Cash and marketable securities$2,509 $1,791 40 %
Cash, marketable securities, and unused lines of credit as a percentage of trailing twelve months' revenue29 %22 %7 pts
Long-term debt, net of current portion2,313 2,182 6%
Shareholders’ equity$4,226 $4,113 3%
Debt-to-capitalization, including operating and finance leases
(in millions)June 30, 2024December 31, 2023Change
Long-term debt, net of current portion$2,313 $2,182 6%
Capitalized operating leases1,203 1,283 (6)%
Capitalized finance leases(a)
— 64 NM
Adjusted debt, net of current portion of long-term debt$3,516 $3,529 —%
Shareholders' equity4,226 4,113 3%
Total invested capital$7,742 $7,642 1%
Debt-to-capitalization, including operating and finance leases45 %46 %(1) pt
(a)To best reflect our leverage at December 31, 2023, we included our capitalized finance lease balances, which are recognized within the Current portion of long-term debt and finance leases line in the unaudited Condensed Consolidated Balance Sheets.
Adjusted net debt to earnings before interest, taxes, depreciation, amortization, special items, and rent
(in millions)June 30, 2024December 31, 2023
Current portion of long-term debt and finance leases$359 $353 
Current portion of operating lease liabilities153 158 
Long-term debt2,313 2,182 
Long-term operating lease liabilities, net of current portion1,050 1,125 
Total adjusted debt3,875 3,818 
Less: Cash and marketable securities2,509 1,791 
Adjusted net debt$1,366 $2,027 
(in millions)Twelve Months Ended June 30, 2024Twelve Months Ended December 31, 2023
GAAP Operating Income(a)
$399 $394 
Adjusted for:
Special items - operating373 443 
Mark-to-market fuel hedge adjustments(41)(2)
Depreciation and amortization488 451 
Aircraft rent188 208 
EBITDAR$1,407 $1,494 
Adjusted net debt to EBITDAR1.0x1.4x
(a)Operating Income can be reconciled using the trailing twelve month operating income as filed quarterly with the SEC.

37
ANALYSIS OF OUR CASH FLOWS
 
The following discussion summarizes the primary drivers of the increase in our cash and marketable securities balance.

Cash Provided by Operating Activities
 
For the first six months of 2024, cash provided by operating activities was $872 million, compared to cash provided by operating activities of $832 million in 2023. Cash provided by ticket sales and from our co-branded credit card agreement are the primary sources of our operating cash flow. Our primary use of operating cash flow is for operating expenses, including payments for employee wages and benefits, payments to suppliers for goods and services, and payments to lessors and airport authorities for rents and landing fees. Operating cash flow also includes payments to, or refunds from, federal, state, and local taxing authorities. The $40 million net increase in our operating cash flows was primarily due to a combination of changes in various working capital account balances.

Cash Used in Investing Activities
 
Cash used in investing activities was $135 million during the first six months of 2024, compared to cash used in investing activities of $479 million in 2023. In 2024, the Company received $162 million in supplier proceeds from Boeing related to the B737-9 grounding. The Company also received $180 million for the sale of certain owned aircraft and equipment. Total property and equipment expenditures decreased $47 million due to fewer deliveries of B737 aircraft in the first half of 2024 compared to 2023, and due to changes in contractual terms of our aircraft purchase deposit schedule with Boeing. This was partially offset by the purchase of a facility in Renton, Washington for $86 million in the second quarter of 2024. Finally, net sales of marketable securities decreased by $60 million compared to the prior year.

Cash Provided by (Used in) Financing Activities

Cash provided by financing activities was $87 million during the first six months of 2024, compared to cash used in financing activities of $165 million in 2023. The increase was driven by $279 million in new debt proceeds in 2024 compared to zero in 2023, partially offset by increased cash used in other financing activities, of which the settlement of the final A321neo finance lease was the largest component.

MATERIAL CASH COMMITMENTS

Material cash requirements include the following contractual and other obligations.
 
Aircraft Commitments
 
As of June 30, 2024, Alaska had firm orders to purchase 72 B737 aircraft with deliveries between 2024 and 2027. Alaska also had rights for 105 additional B737 aircraft through 2030.

Boeing has communicated to Alaska that certain B737 aircraft are expected to be delivered later than the contracted delivery dates. This includes certain B737-8 and B737-9 aircraft contracted for delivery in 2024 that have been moved to 2025, as well as certain B737-10 aircraft contracted for delivery in 2025 that have been moved to 2026, pending certification of the B737-10. We have incorporated these adjustments in the tables below, however, management expects that additional Boeing aircraft deliveries may also be delayed beyond what is depicted in the tables.

As of June 30, 2024, Horizon had commitments to purchase six E175 aircraft with deliveries between 2025 and 2026. Horizon also had options to acquire four E175 aircraft in 2026, two of which expired subsequent to quarter end.

Options will be exercised only if we believe return on invested capital targets can be met over the long term.

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The following table summarizes our fleet plan based on contractual terms, with adjustments to reflect delivery delays as communicated by Boeing:
Actual FleetAnticipated Fleet Activity
AircraftJune 30, 20242024 ChangesDec 31, 20242025 ChangesDec 31, 20252026 ChangesDec 31, 2026
B737-700 Freighters3 — 3 — 3 — 3 
B737-800 Freighters2 — 2 — 2 — 2 
B737-70011 — 11 — 11 — 11 
B737-80059 — 59 — 59 — 59 
B737-90012 (6)6 (6)— — — 
B737-900ER79 — 79 — 79 — 79 
B737-84 1 5 15 20 — 20 
B737-970 8 78 2 80 — 80 
B737-10— — — — — 21 21 
Total Mainline Fleet240 3 243 11 254 21 275 
E175 operated by Horizon44 — 44 3 47 3 50 
E175 operated by third party42 — 42 1 43 — 43 
Total Regional Fleet86 — 86 4 90 3 93 
Total326 3 329 15 344 24 368 

Fuel Hedge Positions

In 2023, we suspended our crude oil hedge program. Existing positions entered into before suspension of the program will settle through the first quarter of 2025. All future oil positions are call options, which are designed to effectively cap the cost of the crude oil component of our jet fuel purchases. With call options, we are hedged against volatile crude oil price increases and, during a period of decline in crude oil prices, we only forfeit cash previously paid for hedge premiums. Prior to suspension, our program was designed to hedge on up to 50% of our expected consumption. Our crude oil positions are as follows:
 Approximate % of Expected Fuel RequirementsWeighted-Average Crude Oil Price per BarrelAverage Premium Cost per Barrel
Third Quarter of 202430 %$88$5
Fourth Quarter of 202420 %$87$5
Rest of Year 202425 %$88$5
First Quarter of 202510 %$92$5
Full Year 20252 %$92$5

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Contractual Obligations
 
The following table provides a summary of our obligations as of June 30, 2024. For agreements with variable terms, amounts included reflect our minimum obligations.
(in millions)Remainder of 20242025202620272028Beyond 2028Total
Debt obligations$164 $385 $342 $666 $176 $953 $2,686 
Lease commitments(a)
114 204 203 196 187 678 1,582 
Aircraft-related commitments(b)
864 1,064 1,186 1,100 151 715 5,080 
Interest obligations(c)
74 129 124 119 59 122 627 
CPA and other obligations119 242 235 231 234 658 1,719 
Total$1,335 $2,024 $2,090 $2,312 $807 $3,126 $11,694 
(a)Lease commitments include minimum payments for aircraft (operating and non-operating) with associated operating leases, as we have remaining cash obligations under existing terms. It also includes minimum lease payments for facilities.
(b)Includes contractual commitments for aircraft, engines, and aircraft maintenance. Option deliveries are excluded from minimum commitments until exercise.
(c)For variable-rate debt, future obligations are shown above using interest rates forecast as of June 30, 2024.

Debt Obligations and Interest Obligations

The Company primarily issues debt to fund purchases of aircraft or other capital expenditures. At June 30, 2024, our debt portfolio carries a weighted average interest rate of 4.7%. Interest is paid with regular debt service. At June 30, 2024, debt service obligations remaining in 2024 are expected to be approximately $238 million, inclusive of interest and principal. Refer to Note 5 to the consolidated financial statements for further discussion of our debt and interest balances.

CPA and Other Obligations

We have obligations primarily associated with our capacity purchase agreements between Alaska and SkyWest, as well as other various sponsorship agreements and investment commitments.

Leased Aircraft Return Costs

For leased aircraft, contractual terms require us to return the aircraft in a specified state. As a result of these contractual terms, we incur significant costs to return these aircraft at the termination of the lease. Costs to return leased aircraft are accrued when the costs are probable and reasonably estimable, usually over the twelve months prior to the lease return or any expected early retirement date, unless a determination is made to remove the leased asset from operation. If the leased aircraft is removed from the operating fleet, the estimated cost to return is accrued at the time of removal. Lease return accrual estimates are based on the time remaining on the lease and the provisions included in the lease agreement, although the actual amount due to any lessor upon return may not be known with certainty until lease termination. At June 30, 2024, $94 million is accrued for lease returns, and classified within Other accrued liabilities in the consolidated balance sheets.

Credit Card Agreements
 
Alaska has agreements with a number of credit card companies to process the sale of tickets and other services. Under these agreements, there are material adverse change clauses that, if triggered, could result in the credit card companies holding back a reserve from our credit card receivables. Under one such agreement, we could be required to maintain a reserve if our credit rating is downgraded to or below a rating specified by the agreement or our cash and marketable securities balance fell below $500 million. Under another such agreement, we could be required to maintain a reserve if our cash and marketable securities balance fell below $500 million. We are not currently required to maintain any reserve under these agreements, but if we were, our financial position and liquidity could be materially harmed.

Sustainability Commitments

As part of our efforts to reach net-zero carbon emissions by 2040, we have outlined a five-part path that includes operational efficiency, fleet renewal, sustainable aviation fuel (SAF), investing in new technologies, and using credible offsetting and removal technologies to close the gaps to our emissions target in future years. We anticipate these efforts will require cash outlays, not all of which are reflected in our contractual commitments. Finding and establishing relationships with suppliers to meet these commitments is in process. Currently, Alaska has certain agreements to purchase SAF to be delivered in the coming
40
years. These agreements are dependent on suppliers' ability to obtain all required governmental and regulatory approvals, achieve commercial operation, and produce sufficient quantities of SAF. Financial commitments that have been contractually established and have defined minimum obligations, including those related to Alaska Star Ventures, are included within the CPA and other obligations row in the above table.

Income Taxes

For federal income tax purposes, the majority of our property and equipment are fully depreciated over a seven-year life using an accelerated depreciation method or bonus depreciation, if available. For financial reporting purposes, the majority of our assets are depreciated over 15 to 25 years to an estimated salvage value using the straight-line basis. This difference has created a significant deferred tax liability. At some point in the future, the property and equipment difference will reverse into taxable income, potentially resulting in an increase in income taxes payable.

While it is possible that we could have material cash obligations for this deferred liability at some point in the future, we cannot estimate the timing of long-term cash flows with reasonable accuracy. Taxable income and cash taxes payable in the short term are impacted by many items, including the amount of book income generated (which can be volatile depending on revenue and fuel prices, among other factors out of our control), whether bonus depreciation provisions are available, as well as other legislative changes beyond our control. We believe we have the liquidity to make our future tax payments.

Proposed Acquisition of Hawaiian Holdings Inc.

On December 2, 2023, the Company entered into a definitive agreement to acquire Hawaiian Holdings, Inc. (Hawaiian). The Company has agreed to pay Hawaiian's shareholders $18.00 per share, or approximately $1.0 billion, in cash for the outstanding shares of Hawaiian. In addition, the Company expects to assume Hawaiian's debt and lease obligations on the date of acquisition. The acquisition is dependent on approval by various regulatory bodies and other customary closing conditions. The Company expects to fund this acquisition through a combination of existing cash and marketable securities, new debt, as well as other available sources of liquidity.

CRITICAL ACCOUNTING ESTIMATES

There have been no material changes to our critical accounting estimates during the three and six months ended June 30, 2024. For information regarding our critical accounting estimates, see Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2023.


GLOSSARY OF TERMS

Adjusted net debt - long-term debt, including current portion, plus capitalized operating and finance 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; represents all operating expenses including fuel, freighter costs, and special items

CASMex - operating costs excluding fuel, freighter costs, and special items per ASM, or "unit cost"

Debt-to-capitalization ratio - represents adjusted debt (long-term debt plus capitalized operating and finance lease liabilities) divided by total equity plus adjusted debt

Diluted Earnings per Share - represents earnings per share (EPS) using fully diluted shares outstanding
41

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

Freighter Costs - operating expenses directly attributable to the operation of Alaska's Boeing 737 freighter aircraft exclusively performing cargo missions

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 A320, and Airbus A321neo jets and all associated revenue and costs

PRASM - passenger revenue per ASM, or "passenger unit revenue"

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. Financial results in this segment include 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 (CPA). Additionally, Regional includes an allocation of corporate overhead such as IT, finance, and other administrative costs incurred by Air Group 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
42
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
 
There have been no material changes in market risk from the information provided in Item 7A. “Quantitative and Qualitative Disclosure About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2023.
 
43
ITEM 4. CONTROLS AND PROCEDURES
 
Evaluation of Disclosure Controls and Procedures

As of June 30, 2024, an evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and chief financial officer (collectively, our “certifying officers”), of the effectiveness of the design and operation of our disclosure controls and procedures. These disclosure controls and procedures are designed to ensure that the information required to be disclosed by us in our periodic reports filed with or submitted to the Securities and Exchange Commission (the SEC) is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms, and includes, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our certifying officers, as appropriate, to allow timely decisions regarding required disclosure. Our certifying officers concluded, based on their evaluation, that disclosure controls and procedures were effective as of June 30, 2024.
 
Changes in Internal Control over Financial Reporting
 
There have been no changes in the Company’s internal controls over financial reporting during the quarter ended June 30, 2024, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Our internal control over financial reporting is based on the 2013 framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO Framework).
44
PART II

ITEM 1. LEGAL PROCEEDINGS

See Note 7 to the condensed consolidated financial statements within Part I, Item 1 of this document for a discussion of the Company's ongoing legal proceedings.

ITEM 1A. RISK FACTORS

See Part I, Item 1A. "Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2023 for a detailed discussion of risk factors affecting Alaska Air Group.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

This table provides certain information with respect to our purchases of shares of our common stock during the second quarter of 2024.
Total Number of
Shares Purchased		Average Price
Paid per Share		Maximum remaining
dollar value of shares
that can be purchased
under the plan
(in millions)
April 1, 2024 - April 30, 2024225,427 43.11 
May 1, 2024 - May 31, 2024228,850 42.97 
June 1, 2024 - June 30, 2024208,900 41.07 
Total663,177 $42.42 $262 

The shares were purchased pursuant to a $1 billion repurchase plan authorized by the Board of Directors in August 2015.

As of June 30, 2024, a total of 1,882,517 shares of the Company’s common stock have been issued to Treasury in connection with the Payroll Support Program. Each warrant is exercisable at a strike price of $31.61 (928,126 shares related to PSP1), $52.25 (305,499 shares related to PSP2), and $66.39 (221,812 shares related to PSP3) per share of common stock. An additional 427,080 warrants were issued in conjunction with a draw on the CARES Act Loan in 2020 at a strike price of $31.61. These warrants are non-voting, freely transferable, may be settled as net shares or in cash at the Company's option, and have a five-year term. Such warrants were issued to Treasury in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The warrants were sold at auction in the second quarter of 2024 to a third party investor.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

None.

ITEM 5. OTHER INFORMATION
 
During the three months ended June 30, 2024, no director or officer of Alaska Air Group adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement, as such terms are defined in Item 408(a) of Regulation S-K promulgated under the Securities Exchange Act of 1934.

45
ITEM 6. EXHIBITS
 
The following documents are filed as part of this report:

1.Exhibits: See Exhibit Index.

46
EXHIBIT INDEX
Exhibit
Number		Exhibit
Description		FormDate of First FilingExhibit Number
3.110-QAugust 3, 20173.1
3.28-KDecember 15, 20153.2
10.1#†10-Q
31.1†10-Q
31.2†10-Q
32.1†10-Q
32.2†10-Q
101.INS†XBRL Instance Document - The instance document does not appear in the interactive data file because XBRL tags are embedded within the inline XBRL document.
101.SCH†XBRL Taxonomy Extension Schema Document
101.CAL†XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF†XBRL Taxonomy Extension Definition Linkbase Document
101.LAB†XBRL Taxonomy Extension Label Linkbase Document
101.PRE†XBRL Taxonomy Extension Presentation Linkbase Document
104†Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
†Filed herewith
*Indicates management contract or compensatory plan or arrangement.
#Certain portions of this document that constitute confidential information have been redacted in accordance with Regulation S-K Item 601(b)(10).

47
SIGNATURES
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
ALASKA AIR GROUP, INC.
/s/ EMILY HALVERSON
Emily Halverson
Vice President Finance, Controller, and Treasurer
August 2, 2024
 
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CERTAIN CONFIDENTIAL PORTIONS HAVE BEEN REDACTED FROM THIS EXHIBIT BECAUSE THEY ARE BOTH (i) NOT MATERIAL AND (ii) IS THE TYPE THAT THE COMPANY TREATS AS PRIVATE OR CONFIDENTIAL. INFORMATION THAT HAS BEEN OMITTED HAD BEEN IDENTIFIED IN THIS DOCUMENT WITH A PLACEHOLDER IDENTIFIED BY THE MARK "[***]".


Supplemental Agreement No. 24

to

Purchase Agreement No. 3866

between

The Boeing Company

and

Alaska Airlines, Inc.

Relating to Boeing Models 737-8, 737-9, and 737-10 Aircraft


    THIS SUPPLEMENTAL AGREEMENT NO. 24 (SA-24), entered into as of June 25, 2024, is by and between THE BOEING COMPANY (Boeing) and ALASKA AIRLINES, INC. (Customer) (Boeing and Customer collectively, Parties). All capitalized terms used but not defined herein shall have the same meaning as in the Purchase Agreement.

    WHEREAS, the Parties hereto entered into Purchase Agreement No. 3866 dated October 10, 2012 (as amended and supplemented, Purchase Agreement) relating to, among other things, Boeing model 737-8 aircraft (737-8 Aircraft), Boeing model 737-9 aircraft (737-9 Aircraft) and Boeing model 737-10 aircraft (737-10 Aircraft), (collectively, Aircraft); and

WHEREAS, Customer and Boeing have agreed to update and amend the Purchase Agreement to purchase (1) incremental 737-10 Aircraft.

NOW THEREFORE, in consideration of the mutual covenants herein contained, the Parties agree to amend the Purchase Agreement as follows:

1.Table of Contents
▪    The “Table of Contents” in the Purchase Agreement is hereby deleted in its entirety and replaced with the revised Table of Contents, attached hereto and incorporated into the Purchase Agreement, to reflect the changes made in this SA-24.
    Page 1
BOEING PROPRIETARY

2.Tables and Supplemental Exhibits.
▪The Tables and Supplemental Exhibits in the Purchase Agreement are amended as set forth, to incorporate and reflect the changes made in this SA-24.
1.1A new Table [ * * * ] “Incremental 737-10 Aircraft” attached hereto is incorporated into the Purchase Agreement to reflect the addition of one (1) incremental 737-10 Aircraft and references this SA-24.
1.2Supplemental Exhibit [ * * * ] in the Purchase Agreement, entitled “Buyer Furnished Equipment Variables,” is hereby deleted in its entirety and replaced with the revised Supplemental Exhibit [ * * * ], attached hereto and incorporated into the Purchase Agreement.
1.3Supplemental Exhibit [ * * * ] in the Purchase Agreement, entitled “Engine Escalation Engine Warranty and Patent Indemnity,” is hereby deleted in its entirety and replaced with the revised Supplemental Exhibit [ * * * ], attached hereto and incorporated into the Purchase Agreement.
2.1Exhibit A-9 in the Purchase Agreement, entitled “Aircraft Configuration 737-10 is hereby deleted in its entirety and replaced with a revised Exhibit A-9 attached hereto.
3.Letter Agreement.
3.1Letter Agreement [ * * * ], entitled “Seller Purchased Equipment,” is hereby deleted in its entirety and replaced with a revised Letter Agreement [ * * * ], attached hereto, to incorporate 737-10 aircraft.
3.2Letter Agreement [ * * * ], entitled “Demonstration Flight Waiver,” is hereby deleted in its entirety and replaced with a revised Letter Agreement [ * * * ], attached hereto, to incorporate 737-10 aircraft.
3.3Letter Agreement [ * * * ], entitled “AGTA Matters,” is hereby deleted in its entirety and replaced with a revised Letter Agreement [ * * * ], attached hereto, to incorporate 737-10 aircraft.
3.4Letter Agreement [ * * * ], entitled “Special Matters” is hereby deleted in its entirety and replaced with a revised Letter Agreement [ * * * ], attached hereto, to reflect the addition of (1) incremental 737-10 Aircraft.
3.5Letter Agreement [ * * * ], entitled “Aircraft Model Substitution” is hereby deleted in its entirety and replaced with a revised Letter Agreement [ * * * ], attached hereto, to reflect substitution rights for 737-10 Aircraft.
3.6Letter Agreement [ * * * ], entitled “Liquidated Damages – Non-Excusable Delay,” is hereby deleted in its entirety and replaced with a revised Letter Agreement [ * * * ], attached hereto, [ * * * ]
P.A. 3866
ASA    Page 2
BOEING PROPRIETARY

3.7Letter Agreement [ * * * ], entitled “Extended Operations (ETOPS) Matters,” is hereby deleted in its entirety and replaced with a revised Letter Agreement [ * * * ], attached hereto, to incorporate 737-10 aircraft.
3.8Letter Agreement [ * * * ], entitled “Advance Payment Matters” is hereby deleted in its entirety and replaced with a revised Letter Agreement [ * * * ], attached hereto, to reflect the addition of one (1) incremental 737-10 Aircraft.
3.9Letter Agreement [ * * * ], entitled “Open Matters – 737-8 and 737-10 Aircraft” is hereby deleted in its entirety and replaced with a revised Letter Agreement [ * * * ], attached hereto, to reflect current configuration status related to 737-8 and 737-10 aircraft.

4.Miscellaneous.
4.1[ * * * ]
4.2[ * * * ]

EXECUTED IN DUPLICATE as of the day and year first written above and below.

THE BOEING COMPANY
By
ItsAttorney-In-Fact
ACCEPTED AND AGREED TO this
Date:
ALASKA AIRLINES, INC.
By
ItsSVP Fleet, Revenue Products and Real Estate

P.A. 3866
ASA    Page 3
BOEING PROPRIETARY

EXHIBIT 31.1
CERTIFICATIONS
I, Benito Minicucci, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Alaska Air Group, Inc. for the period ended June 30, 2024;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 2, 2024
By/s/ BENITO MINICUCCI
Benito Minicucci
President and Chief Executive Officer




EXHIBIT 31.2
CERTIFICATIONS
I, Shane R. Tackett, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Alaska Air Group, Inc. for the period ended June 30, 2024;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

August 2, 2024
By/s/ SHANE R. TACKETT
Shane R. Tackett
Executive Vice President/Finance and Chief Financial Officer





EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Alaska Air Group, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Benito Minicucci, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 2, 2024
By/s/ BENITO MINICUCCI
Benito Minicucci
Chief Executive Officer





EXHIBIT 32.2

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906
OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Alaska Air Group, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Shane R. Tackett, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 2, 2024
By/s/ SHANE R. TACKETT
Shane R. Tackett
Executive Vice President/Finance and Chief Financial Officer




v3.24.2.u1
COVER - shares
 6 Months Ended
Jun. 30, 2024
Jul. 31, 2024
Cover [Abstract]    
Document Type 10-Q  
Document Transition Report false  
Document Period End Date Jun. 30, 2024  
Document Quarterly Report true  
Entity File Number 1-8957  
Entity Registrant Name ALASKA AIR GROUP, INC.  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 91-1292054  
Title of 12(b) Security Common stock, $0.01 par value  
Security Exchange Name NYSE  
Trading Symbol ALK  
Entity Address, Address Line One 19300 International Boulevard,  
Entity Address, City or Town Seattle,  
Entity Address, State or Province WA  
Entity Address, Postal Zip Code 98188  
City Area Code (206)  
Local Phone Number 392-5040  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth Company false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   126,159,173
Amendment Flag false  
Document Fiscal Year Focus 2024  
Document Fiscal Period Focus Q2  
Entity Central Index Key 0000766421  
Current Fiscal Year End Date --12-31  
v3.24.2.u1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Current Assets    
Cash and cash equivalents $ 1,115 $ 281
Marketable securities 1,394 1,510
Total cash and marketable securities 2,509 1,791
Receivables - net 370 383
Inventories and supplies - net 106 116
Prepaid expenses 179 176
Other Assets, Current 212 239
Total Current Assets 3,376 2,705
Property and Equipment    
Aircraft and other flight equipment 10,734 10,425
Other property and equipment 1,941 1,814
Deposits for future flight equipment 383 491
Property and Equipment Total 13,058 12,730
Less accumulated depreciation and amortization 4,537 4,342
Total Property and Equipment - Net 8,521 8,388
Operating Lease, Right-of-Use Asset 1,142 1,195
Goodwill 2,033 2,033
Other noncurrent assets 270 292
Other Assets 3,445 3,520
Total Assets 15,342 14,613
Current Liabilities    
Accounts payable 203 207
Accrued wages, vacation and payroll taxes 513 584
Other accrued liabilities 852 800
Operating Lease, Liability, Current 153 158
Current portion of long-term debt 359 353
Total Current Liabilities 4,968 4,459
Long-Term Debt, Net of Current Portion 2,313 2,182
Noncurrent Liabilities    
Operating Lease, Liability, Noncurrent 1,050 1,125
Deferred Income Tax Liabilities, Net 746 695
Deferred revenue, noncurrent 1,329 1,382
Obligation for pension and postretirement medical benefits 358 362
Other liabilities 352 295
Other Liabilities and Credits Totals 3,835 3,859
Commitments and Contingencies
Shareholders' Equity    
Preferred stock, $0.01 par value, Authorized: 5,000,000 shares, none issued or outstanding 0 0
Common stock, $0.01 par value, Authorized: 400,000,000 shares, Issued: 2021 - 133,792,045 shares; 2020 - 133,567,534 shares, Outstanding: 2021 - 124,442,101 shares; 2020 - 124,217,590 shares 1 1
Capital in excess of par value $ 757 $ 695
Treasury Stock, Common, Shares 14,094,740 12,870,477
Treasury stock (common), at cost: 2020 - 9,349,944 shares; 2020 - 9,349,944 shares $ (868) $ (819)
Accumulated other comprehensive loss (287) (299)
Retained earnings 4,623 4,535
Total Shareholders' Equity 4,226 4,113
Total Liabilities and Shareholders' Equity 15,342 14,613
Mileage Plan Revenue [Member]    
Current Liabilities    
Contract with Customer, Liability, Current 1,312 1,221
Contract with Customer, Liability, Current 1,312 1,221
Passenger Revenue [Member]    
Current Liabilities    
Contract with Customer, Liability, Current 1,576 1,136
Contract with Customer, Liability, Current $ 1,576 $ 1,136
v3.24.2.u1
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICALS) - $ / shares
Jun. 30, 2024
Dec. 31, 2023
Stockholders' Equity:    
Preferred Stock, par value (usd per share) $ 0.01  
Preferred stock, shares authorized (shares) 5,000,000  
Preferred stock, shares issued (shares) 0  
Common stock, par value (usd per share) $ 0.01  
Common stock, shares authorized (shares) 400,000,000  
Common stock, shares issued (shares) 140,570,032 138,960,830
Common stock, shares outstanding (shares) 126,475,292 126,090,353
Treasury Stock, Common, Shares 14,094,740 12,870,477
v3.24.2.u1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax $ 2,897 $ 2,838 $ 5,129 $ 5,034
Operating Expenses        
Wages and benefits 782 754 1,586 1,477
Variable incentive pay 49 57 93 104
Aircraft fuel, including hedging gains and losses 615 573 1,180 1,238
Aircraft maintenance 129 125 251 249
Aircraft rent 46 54 93 113
Landing fees and other rentals 173 167 338 319
Contracted services 106 95 203 190
Selling expenses 84 81 161 147
Depreciation and amortization 128 113 254 217
Food and beverage service 67 60 125 114
Third-party regional carrier expense 64 54 118 106
Other 186 182 391 359
Special items - operating 146 186 180 250
Costs and Expenses, Total 2,575 2,501 4,973 4,883
Operating Income (Loss) 322 337 156 151
Nonoperating Income (Expense)        
Interest income 24 22 41 39
Interest expense (36) (28) (71) (56)
Interest capitalized 6 7 12 14
Special items - net non-operating 0 (6) 0 (6)
Other—net 0 (7) 0 (16)
Nonoperating Income (Expense) Total (6) (12) (18) (25)
Income (Loss) Before Income Tax 316 325 138 126
Income tax (benefit) expense 96 85 50 28
Net Income (Loss) $ 220 $ 240 $ 88 $ 98
Basic Earnings Per Share (usd per share) $ 1.74 $ 1.88 $ 0.70 $ 0.77
Diluted Earnings Per Share (usd per share) $ 1.71 $ 1.86 $ 0.69 $ 0.76
Shares used for computation:        
Basic shares (shares) 126,337,000 127,440,000 126,153,000 127,470,000
Diluted shares (shares) 128,310,000 128,919,000 127,857,000 128,860,000
Passenger [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax $ 2,651 $ 2,598 $ 4,655 $ 4,582
Mileage plan other revenue [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 174 170 338 324
Cargo and Freight [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 72 70 136 128
Passenger Revenue [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 2,651 2,598 4,655 4,582
Passenger Revenue [Member] | Passenger [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 2,651 2,598 4,655 4,582
Mileage Plan Revenue [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 464 438 876 824
Mileage Plan Revenue [Member] | Mileage plan other revenue [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 174 170 338 324
Cargo and Other Revenue [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 72 70 136 128
Cargo and Other Revenue [Member] | Cargo and Freight [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax $ 72 $ 70 $ 136 $ 128
v3.24.2.u1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Statement of Comprehensive Income [Abstract]        
Net Income (Loss) $ 220 $ 240 $ 88 $ 98
Related to marketable securities:        
Total 4 (5) 5 16
Related to employee benefit plans:        
Total 3 4 6 8
Related to interest rate derivative instruments:        
Total 0 1 1 (1)
Comprehensive Income (Loss) 227 240 100 121
Other Comprehensive Income (Loss), Net of Tax $ 7 $ 0 $ 12 $ 23
v3.24.2.u1
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS EQUITY Statement - USD ($)
$ in Millions
Total
Common Stock [Member]
Additional Paid-in Capital [Member]
Treasury Stock, Common [Member]
AOCI Attributable to Parent [Member]
Retained Earnings [Member]
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Common stock, shares outstanding (shares)   127.534        
Stockholders' Equity Attributable to Parent at Dec. 31, 2022 $ 3,816 $ 1 $ 577 $ (674) $ (388) $ 4,300
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net Income (Loss) (142)         (142)
Other Comprehensive Income (Loss), Net of Tax 23       23  
Treasury Stock, Shares, Acquired   0.414        
Stock Repurchased During Period, Value (18)     18    
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition 12   12      
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures (2)   (2)      
Stockholders' Equity Attributable to Parent at Mar. 31, 2023 3,689 $ 1 587 (692) (365) 4,158
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures   0.123        
Stockholders' Equity Attributable to Parent at Dec. 31, 2022 3,816 $ 1 577 (674) (388) 4,300
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net Income (Loss) 98          
Other Comprehensive Income (Loss), Net of Tax 23          
Stockholders' Equity Attributable to Parent at Jun. 30, 2023 3,951 $ 1 648 (731) (365) 4,398
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Common stock, shares outstanding (shares)   127.243        
Stockholders' Equity Attributable to Parent at Mar. 31, 2023 3,689 $ 1 587 (692) (365) 4,158
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net Income (Loss) 240         240
Other Comprehensive Income (Loss), Net of Tax 0       0  
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period   0.017        
Treasury Stock, Shares, Acquired   0.872        
Stock Repurchased During Period, Value (39)     39    
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition 26   26      
Stock Issued During Period, Shares, Employee Stock Purchase Plans   0.924        
Stock Issued During Period, Value, Employee Stock Purchase Plan 34   34      
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures 1   1      
Stockholders' Equity Attributable to Parent at Jun. 30, 2023 $ 3,951 $ 1 648 (731) (365) 4,398
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures   0.036        
Common stock, shares outstanding (shares)   127.348        
Common stock, shares outstanding (shares) 126,090,353 126.090        
Stockholders' Equity Attributable to Parent at Dec. 31, 2023 $ 4,113 $ 1 695 (819) (299) 4,535
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net Income (Loss) (132)         (132)
Other Comprehensive Income (Loss), Net of Tax 5       5  
Treasury Stock, Shares, Acquired   0.561        
Stock Repurchased During Period, Value (21)     21    
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition 15   15      
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures (3)   (3)      
Stockholders' Equity Attributable to Parent at Mar. 31, 2024 3,977 $ 1 707 (840) (294) 4,403
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures   0.177        
Stockholders' Equity Attributable to Parent at Dec. 31, 2023 4,113 $ 1 695 (819) (299) 4,535
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net Income (Loss) 88          
Other Comprehensive Income (Loss), Net of Tax 12          
Stockholders' Equity Attributable to Parent at Jun. 30, 2024 4,226 $ 1 757 (868) (287) 4,623
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Common stock, shares outstanding (shares)   125.706        
Stockholders' Equity Attributable to Parent at Mar. 31, 2024 3,977 $ 1 707 (840) (294) 4,403
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Net Income (Loss) 220         220
Other Comprehensive Income (Loss), Net of Tax 7       7  
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period   0.013        
Treasury Stock, Shares, Acquired   0.663        
Stock Repurchased During Period, Value (28)     28    
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition 13   13      
Stock Issued During Period, Shares, Employee Stock Purchase Plans   1.401        
Stock Issued During Period, Value, Employee Stock Purchase Plan 37   37      
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures 0   0      
Stockholders' Equity Attributable to Parent at Jun. 30, 2024 $ 4,226 $ 1 $ 757 $ (868) $ (287) $ 4,623
Increase (Decrease) in Stockholders' Equity [Roll Forward]            
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures   0.018        
Common stock, shares outstanding (shares) 126,475,292 126.475        
v3.24.2.u1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Cash flows from operating activities:    
Net Income $ 88 $ 98
Adjustments to reconcile net income (loss) to net cash provided by operating activities:    
Depreciation and amortization 254 217
Stock-based compensation and other 37 56
Special items - operating and other noncash 0 238
Changes in certain assets and liabilities:    
Changes in deferred tax provision 47 (27)
Increase (Decrease) in Accounts Receivable (55) (55)
Increase (Decrease) in Contract with Customer, Liability 440 394
Increase in deferred revenue 38 80
Other - net 23 (223)
Net cash provided by operating activities 872 832
Property and equipment additions:    
Aircraft and aircraft purchase deposits (380) (414)
Other flight equipment (63) (113)
Other property and equipment (144) (107)
Supplier Proceeds 162 0
Purchases of marketable securities (163) (389)
Sales and maturities of marketable securities 288 574
Investing activities - fleet transition 133 (29)
Other investing activities 32 (1)
Net cash used in investing activities (135) (479)
Cash flows from financing activities:    
Proceeds from issuance of debt 279 0
Common stock repurchases (49) (57)
Long-term debt payments (149) (149)
Other financing activities 6 41
Net cash provided by (used in) financing activities 87 (165)
Net increase in cash, cash equivalents, and restricted cash 824 188
Cash, cash equivalents, and restricted cash at beginning of year 308 369
Cash, cash equivalents, and restricted cash at end of the period 1,132 557
Cash paid during the period for:    
Interest (net of amount capitalized) 55 42
Income taxes 0 14
Non-cash transactions:    
Right-of-use assets acquired through operating leases 34 120
Operating lease converted to finance lease 0 310
Noncash or Part Noncash Acquisition, Fixed Assets Acquired 68 134
Reconciliation of cash, cash equivalents, and restricted cash at end of the period    
Cash and cash equivalents 1,115 536
Restricted cash included in Prepaid expenses, assets held-for-sale and other current assets 17 21
Total cash, cash equivalents, and restricted cash at end of the period $ 1,132 $ 557
v3.24.2.u1
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 6 Months Ended
Jun. 30, 2024
Accounting Policies [Abstract]  
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and Basis of Presentation
 
The unaudited Condensed Consolidated Financial Statements include the accounts of Air Group, or the Company, and its primary subsidiaries, Alaska and Horizon. The unaudited Condensed Consolidated Financial Statements also include McGee Air Services (McGee), a ground services subsidiary of Alaska, and other immaterial business units. All intercompany balances and transactions have been eliminated. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information. Consistent with these requirements, this Quarterly Report on Form 10-Q does not include all the information required by GAAP for complete financial statements. It should be read in conjunction with the consolidated financial statements and accompanying notes in the Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, all adjustments have been made that are necessary to fairly present the Company’s financial position as of June 30, 2024 and the results of operations for the three and six months ended June 30, 2024 and 2023. Such adjustments were of a normal recurring nature. Certain rows, columns, figures, or percentages may not recalculate due to rounding.

In preparing these statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities, as well as the reported amounts of revenue and expenses, including impairment charges. Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, changes in global economic conditions, changes in the competitive environment, and other factors, operating results for the three and six months ended June 30, 2024 are not necessarily indicative of operating results for the entire year.

Flight 1282 and Boeing 737-9 MAX Grounding

As a result of the Flight 1282 accident and the subsequent grounding of Boeing 737-9 MAX (B737-9) aircraft, Air Group's operation and results in the first and second quarters were significantly impacted. The Company received compensation from Boeing to address the financial damages incurred as a result of the grounding. In the first quarter, Boeing paid Air Group $162 million in cash. In the second quarter, Boeing issued Air Group $61 million in supplier credit memos to be applied against future Boeing goods and services purchases.

Compensation received under the agreement is accounted for as a reduction in cost basis of certain B737-9 aircraft. The compensation is reflected within Aircraft and other flight equipment and Deposits for future flight equipment in the unaudited Condensed Consolidated Balance Sheets.
v3.24.2.u1
Business Combinations, Asset Acquisitions, and Joint Venture Formation
 3 Months Ended
Jun. 30, 2024
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]  
Business Combination Disclosure
On December 2, 2023, the Company entered into a definitive agreement to acquire Hawaiian Holdings, Inc. (Hawaiian). The Company has agreed to pay Hawaiian's shareholders $18.00 per share, or approximately $1.0 billion, in cash for the outstanding shares of Hawaiian. In addition, the Company expects to assume Hawaiian's debt and lease obligations on the date of acquisition. The acquisition has been approved by Hawaiian's shareholders and is subject to final approval by various regulatory bodies.

On February 7, 2024, Air Group and Hawaiian each received a request for additional information and documentary material (the “Second Request”) from the Antitrust Division of the Department of Justice (the “DOJ”) in connection with the DOJ’s review of the acquisition. On March 27, 2024, Air Group and Hawaiian entered into a timing agreement with the DOJ pursuant to which they agreed, among other things, not to consummate the acquisition before 90 days following the date on which both parties have certified substantial compliance with the Second Request unless they have received written notice from the DOJ prior to the end of such 90-day period that the DOJ has closed its investigation of the acquisition.

On May 7, 2024, Air Group and Hawaiian certified substantial compliance with the Second Request. The certification of substantial compliance triggered the start of the 90-day period described in the prior paragraph, which was previously scheduled to expire on August 5, 2024. On July 29, 2024, Air Group and Hawaiian agreed with the DOJ to extend the Review Period until 12:01 a.m. Eastern Time on August 15, 2024.

In the three and six months ended June 30, 2024, the Company incurred integration costs of $30 million and $38 million, respectively, primarily consisting of professional services fees. These costs are included within Special items - operating in the
unaudited Condensed Consolidated Statements of Operations. The Company expects to continue to incur integration costs as activities supporting the proposed acquisition continue.
v3.24.2.u1
REVENUE FROM CONTRACTS WITH CUSTOMERS
 6 Months Ended
Jun. 30, 2024
Revenue Recognition [Abstract]  
REVENUE FROM CONTRACTS WITH CUSTOMERS
Ticket revenue is recorded as Passenger revenue, and represents the primary source of the Company's revenue. Also included in Passenger revenue is passenger ancillary revenue such as bag fees, on-board food and beverage, and certain revenue from the frequent flyer program. Mileage Plan other revenue includes brand and marketing revenue from the co-branded credit card and other partners, and certain interline frequent flyer revenue, net of commissions. Cargo and other revenue includes freight and mail revenue, and to a lesser extent, other ancillary revenue products such as lounge membership and certain commissions.

The level of detail within the Company’s unaudited Condensed Consolidated Statements of Operations and in this footnote depict the nature, amount, timing, and uncertainty of revenue and how cash flows are affected by economic and other factors.

Passenger Ticket and Ancillary Services Revenue

Passenger revenue recognized in the unaudited Condensed Consolidated Statements of Operations (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Passenger ticket revenue, net of taxes and fees$2,226 $2,207 $3,874 $3,855 
Passenger ancillary revenue135 123 243 227 
Mileage Plan passenger revenue290 268 538 500 
Total Passenger revenue$2,651 $2,598 $4,655 $4,582 

Mileage Plan Loyalty Program

Mileage Plan revenue included in the unaudited Condensed Consolidated Statements of Operations (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Mileage Plan passenger revenue$290 $268 $538 $500 
Mileage Plan other revenue174 170 338 324 
Total Mileage Plan revenue$464 $438 $876 $824 

Cargo and Other Revenue

Cargo and other revenue included in the unaudited Condensed Consolidated Statements of Operations (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Cargo revenue$36 $39 $64 $68 
Other revenue36 31 72 60 
Total Cargo and other revenue$72 $70 $136 $128 
Air Traffic Liability and Deferred Revenue

Passenger ticket and ancillary services liabilities

The Company recognized Passenger revenue of $150 million and $103 million from the prior year-end air traffic liability balance for the three months ended June 30, 2024 and 2023, and $717 million and $588 million from the prior year-end air traffic liability balance for the six months ended June 30, 2024 and 2023.

Mileage Plan assets and liabilities

The Company records a receivable for amounts due from the affinity card partner and from other partners as mileage credits are sold until the payments are collected. The Company had $87 million of such receivables as of June 30, 2024 and $102 million as of December 31, 2023.

The table below presents a roll forward of the total frequent flyer liability (in millions):
Six Months Ended June 30,
20242023
Total Deferred Revenue balance at January 1$2,603 $2,497 
Travel miles and companion certificate redemption - Passenger revenue(508)(470)
Miles redeemed on partner airlines - Other revenue(67)(52)
Increase in liability for mileage credits issued613 602 
Total Deferred Revenue balance at June 30$2,641 $2,577 
v3.24.2.u1
EMPLOYEE BENEFIT PLANS
 6 Months Ended
Jun. 30, 2024
Retirement Benefits [Abstract]  
EMPLOYEE BENEFIT PLANS EMPLOYEE BENEFIT PLANS
Net periodic benefit costs for qualified defined-benefit plans include the following (in millions):
Three Months Ended June 30,Six Months Ended June 30,
 2024202320242023
Service cost$7 $7 $14 $14 
Pension expense included in Wages and benefits7 7 14 14 
Interest cost27 27 54 54 
Expected return on assets(32)(29)(64)(57)
Recognized actuarial loss4 6 9 12 
Pension expense (benefit) included in Non-operating Income$(1)$4 $(1)$9 
v3.24.2.u1
SHAREHOLDERS' EQUITY
 6 Months Ended
Jun. 30, 2024
Equity [Abstract]  
SHAREHOLDERS' EQUITY SHAREHOLDERS' EQUITY
Common Stock Repurchase

In August 2015, the Board of Directors authorized a $1 billion share repurchase program. The Company repurchased 1.2 million shares for $49 million during the six months ended June 30, 2024 and 1.3 million shares for $57 million during the six months ended June 30, 2023. As of June 30, 2024, the Company has repurchased 12.3 million shares for $738 million, with $262 million remaining under this program.
CARES Act Warrant Issuances
As taxpayer protection required under the Payroll Support Program (PSP) under the CARES Act, the Company granted the U.S. Department of the Treasury a total of 1,455,437 warrants to purchase ALK common stock in 2020 and 2021. An additional 427,080 warrants were issued in conjunction with a draw on the CARES Act Loan in 2020. These warrants are non-voting, freely transferable, may be settled as net shares or in cash at the Company's option, and have a five-year term. The warrants were sold at auction in the second quarter of 2024 to a third party investor. The sale had no impact to the amount held on the Company's balance sheet.
As of June 30, 2024, there are 1,882,517 total warrants outstanding, with a weighted average strike price of $39.06. The value of the warrants was estimated using a Black-Scholes option pricing model. The total fair value of all outstanding warrants was $30 million, recorded in stockholders' equity at issuance.
v3.24.2.u1
ACCUMULATED OTHER COMPREHENSIVE LOSS
 3 Months Ended
Jun. 30, 2024
Equity [Abstract]  
Comprehensive Income (Loss) Note ACCUMULATED OTHER COMPREHENSIVE LOSS
A roll forward of the amounts included in accumulated other comprehensive loss is shown below for the three and six months ended June 30, 2024 and 2023:
(in millions)Marketable SecuritiesEmployee Benefit PlanInterest Rate DerivativesTax EffectTotal
Balance at March 31, 2024$(45)$(354)$9 $96 $(294)
Change in value6 — — — 6 
Reclassifications into earnings— 4 — (3)1 
Balance at June 30, 2024$(39)$(350)$9 $93 $(287)
Balance at December 31, 2023$(46)$(358)$8 $97 $(299)
Change in value7 — 1 — 8 
Reclassifications into earnings— 8 — (4)4 
Balance at June 30, 2024$(39)$(350)$9 $93 $(287)

Marketable SecuritiesEmployee Benefit PlanInterest Rate DerivativesTax EffectTotal
Balance at March 31, 2023$(78)$(416)$12 $117 $(365)
Change in value(9)— 2 1 (6)
Reclassifications into earnings3 5 — (2)6 
Balance at June 30, 2023$(84)$(411)$14 $116 $(365)
Balance at December 31, 2022(104)(421)15 122 (388)
Change in value11 — (1)(2)8 
Reclassifications into earnings9 10 — (4)15 
Balance at June 30, 2023$(84)$(411)$14 $116 $(365)
v3.24.2.u1
OPERATING SEGMENT INFORMATION
 6 Months Ended
Jun. 30, 2024
Segment Reporting [Abstract]  
OPERATING SEGMENT INFORMATION OPERATING SEGMENT INFORMATION
Alaska Air Group has two operating airlines – Alaska and Horizon. Each is regulated by the U.S. Department of Transportation’s Federal Aviation Administration. Alaska has CPAs for regional capacity with Horizon and SkyWest, under which Alaska receives all passenger revenue.

Under GAAP, operating segments are defined as components of a business for which there is discrete financial information that is regularly assessed by the Chief Operating Decision Maker (CODM) in making resource allocation decisions. Historically, our CODM has reviewed financial performance information for our airline operations and the Horizon CPA as part of three reportable operating segments:
•Mainline - includes scheduled air transportation on Alaska's Boeing jet aircraft for passengers and cargo throughout the U.S., and in parts of Canada, Mexico, Costa Rica, Belize, Guatemala, and the Bahamas.
•Regional - includes Horizon's and other third-party carriers’ scheduled air transportation for passengers across a shorter distance network within the U.S., Canada, and Mexico under a CPA. This segment includes the actual revenue and expenses associated with regional flying, as well as an allocation of corporate overhead incurred by Air Group on behalf of the regional operations.
•Horizon - includes the capacity sold to Alaska under CPA. Expenses include those typically borne by regional airlines such as crew costs, ownership costs and maintenance costs.

In addition to these reported segments, the Company has a "Consolidating and Other" column which reflects Air Group parent company activity, McGee Air Services, consolidating entries and other immaterial business units of the Company. The “Air Group Adjusted” column represents a non-GAAP measure that is used by the Company's CODM to evaluate performance and allocate resources. Adjustments are further explained below in reconciling to consolidated GAAP results.

Over time, our Mainline and Regional airline segments have increasingly been managed as a single component that provides scheduled air transportation for passengers and cargo, and includes our loyalty program. Managing this component in an integrated manner enables our team to leverage our comprehensive network, single route scheduling system, and fleet as a single business to deliver optimized consolidated financial results. In 2024, management began evaluating changes to internal reporting that may change the discrete information that is provided to our CODM in the future to better align with the way the business is managed. Such changes may have an impact on the Company’s reportable segments once finalized. The Company will continue to report using the existing segment structure until changes in our internal reporting have been fully implemented, and a segment analysis has been performed to determine if any changes to reportable segments are indicated.
Operating segment information is as follows (in millions):
Three Months Ended June 30, 2024
MainlineRegionalHorizon
Consolidating & Other(a)
Air Group Adjusted(b)
Special Items(c)
Consolidated
Operating Revenue   
Passenger revenue$2,188 $463 $— $— $2,651 $— $2,651 
CPA revenue— — 112 (112)— — — 
Mileage Plan other revenue160 14 — — 174 — 174 
Cargo and other revenue69 — — 3 72 — 72 
Total Operating Revenue2,417 477 112 (109)2,897 — 2,897 
Operating Expenses
Operating expenses, excluding fuel1,516 322 92 (116)1,814 146 1,960 
Fuel expense520 100 — — 620 (5)615 
Total Operating Expenses2,036 422 92 (116)2,434 141 2,575 
Non-operating Income (Expense)6 — (12)— (6)— (6)
Income (Loss) Before Income Tax$387 $55 $8 $7 $457 $(141)$316 
Pretax Margin15.8 %10.9 %
Three Months Ended June 30, 2023
MainlineRegionalHorizon
Consolidating & Other(a)
Air Group Adjusted(b)
Special Items(c)
Consolidated
Operating Revenue
Passenger revenue$2,209 $389 $— $— $2,598 $— $2,598 
CPA revenue— — 92 (92)— — — 
Mileage Plan other revenue158 12 — — 170 — 170 
Cargo and other revenue67 — — 3 70 — 70 
Total Operating Revenue2,434 401 92 (89)2,838 — 2,838 
Operating Expenses
Operating expenses, excluding fuel1,468 279 87 (92)1,742 186 1,928 
Fuel expense490 81 — 1 572 1 573 
Total Operating Expenses1,958 360 87 (91)2,314 187 2,501 
Non-operating Income (Expense)3 — (10)1 (6)(6)(12)
Income (Loss) Before Income Tax$479 $41 $(5)$3 $518 $(193)$325 
Pretax Margin18.3 %11.5 %
Six Months Ended June 30, 2024
MainlineRegionalHorizon
Consolidating & Other(a)
Air Group Adjusted(b)
Special Items(c)
Consolidated
Operating Revenue   
Passenger revenue$3,817 $838 $— $— $4,655 $— $4,655 
CPA revenue— — 216 (216)— — — 
Mileage Plan other revenue309 29 — — 338 — 338 
Cargo and other revenue131 — — 5 136 — 136 
Total Operating Revenue4,257 867 216 (211)5,129 — 5,129 
Operating Expenses
Operating expenses, excluding fuel3,030 621 180 (218)3,613 180 3,793 
Fuel expense1,005 193 — — 1,198 (18)1,180 
Total Operating Expenses4,035 814 180 (218)4,811 162 4,973 
Non-operating Income (Expense)3 — (23)2 (18)— (18)
Income (Loss) Before Income Tax$225 $53 $13 $9 $300 $(162)$138 
Pretax Margin5.8 %2.7 %

Six Months Ended June 30, 2023
MainlineRegionalHorizon
Consolidating & Other(a)
Air Group Adjusted(b)
Special Items(c)
Consolidated
Operating Revenue
Passenger revenue$3,882 $700 $— $— $4,582 $— $4,582 
CPA revenue— — 170 (170)— — — 
Mileage Plan other revenue301 23 — — 324 — 324 
Cargo and other revenue124 — — 4 128 — 128 
Total Operating Revenue4,307 723 170 (166)5,034 — 5,034 
Operating Expenses
Operating expenses, excluding fuel2,858 535 171 (169)3,395 250 3,645 
Fuel expense1,051 166 — — 1,217 21 1,238 
Total Operating Expenses3,909 701 171 (169)4,612 271 4,883 
Non-operating Income (Expense)(3)— (18)2 (19)(6)(25)
Income (Loss) Before Income Tax$395 $22 $(19)$5 $403 $(277)$126 
Pretax Margin8.0 %2.5 %
v3.24.2.u1
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2024
Jun. 30, 2023
Accounting Policies [Abstract]      
Organization and Basis of Presentation  
Organization and Basis of Presentation
 
The unaudited Condensed Consolidated Financial Statements include the accounts of Air Group, or the Company, and its primary subsidiaries, Alaska and Horizon. The unaudited Condensed Consolidated Financial Statements also include McGee Air Services (McGee), a ground services subsidiary of Alaska, and other immaterial business units. All intercompany balances and transactions have been eliminated. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information. Consistent with these requirements, this Quarterly Report on Form 10-Q does not include all the information required by GAAP for complete financial statements. It should be read in conjunction with the consolidated financial statements and accompanying notes in the Annual Report on Form 10-K for the year ended December 31, 2023. In the opinion of management, all adjustments have been made that are necessary to fairly present the Company’s financial position as of June 30, 2024 and the results of operations for the three and six months ended June 30, 2024 and 2023. Such adjustments were of a normal recurring nature. Certain rows, columns, figures, or percentages may not recalculate due to rounding.

In preparing these statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities, as well as the reported amounts of revenue and expenses, including impairment charges. Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, changes in global economic conditions, changes in the competitive environment, and other factors, operating results for the three and six months ended June 30, 2024 are not necessarily indicative of operating results for the entire year.

Flight 1282 and Boeing 737-9 MAX Grounding

As a result of the Flight 1282 accident and the subsequent grounding of Boeing 737-9 MAX (B737-9) aircraft, Air Group's operation and results in the first and second quarters were significantly impacted. The Company received compensation from Boeing to address the financial damages incurred as a result of the grounding. In the first quarter, Boeing paid Air Group $162 million in cash. In the second quarter, Boeing issued Air Group $61 million in supplier credit memos to be applied against future Boeing goods and services purchases.

Compensation received under the agreement is accounted for as a reduction in cost basis of certain B737-9 aircraft. The compensation is reflected within Aircraft and other flight equipment and Deposits for future flight equipment in the unaudited Condensed Consolidated Balance Sheets.
  
Supplier compensation [Line Items]      
Supplier Proceeds   $ 162 $ 0
Supplier credit memos [Member]      
Supplier compensation [Line Items]      
Supplier credit memos $ 61    
v3.24.2.u1
REVENUE FROM CONTRACTS WITH CUSTOMERS (Tables)
 6 Months Ended
Jun. 30, 2024
Revenue Recognition [Abstract]  
Disaggregation of Revenue
Passenger revenue recognized in the unaudited Condensed Consolidated Statements of Operations (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Passenger ticket revenue, net of taxes and fees$2,226 $2,207 $3,874 $3,855 
Passenger ancillary revenue135 123 243 227 
Mileage Plan passenger revenue290 268 538 500 
Total Passenger revenue$2,651 $2,598 $4,655 $4,582 
Mileage Plan revenue included in the unaudited Condensed Consolidated Statements of Operations (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Mileage Plan passenger revenue$290 $268 $538 $500 
Mileage Plan other revenue174 170 338 324 
Total Mileage Plan revenue$464 $438 $876 $824 
Cargo and other revenue included in the unaudited Condensed Consolidated Statements of Operations (in millions):
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Cargo revenue$36 $39 $64 $68 
Other revenue36 31 72 60 
Total Cargo and other revenue$72 $70 $136 $128 
Contract with Customer Liabilities
The table below presents a roll forward of the total frequent flyer liability (in millions):
Six Months Ended June 30,
20242023
Total Deferred Revenue balance at January 1$2,603 $2,497 
Travel miles and companion certificate redemption - Passenger revenue(508)(470)
Miles redeemed on partner airlines - Other revenue(67)(52)
Increase in liability for mileage credits issued613 602 
Total Deferred Revenue balance at June 30$2,641 $2,577 
v3.24.2.u1
FAIR VALUE MEASUREMENTS (Tables)
 6 Months Ended
Jun. 30, 2024
Fair Value Disclosures [Abstract]  
Investments Classified by Contractual Maturity Date
Maturities for marketable securities (in millions):
June 30, 2024Cost BasisFair Value
Due in one year or less$600 $592 
Due after one year through five years785 758 
Due after five years through ten years29 26 
Due after 10 years13 12 
No maturity date4 6 
Total$1,431 $1,394 
Fair Value, by Balance Sheet Grouping
Fair values of financial instruments on the unaudited Condensed Consolidated Balance Sheets (in millions):
June 30, 2024December 31, 2023
Level 1Level 2TotalLevel 1Level 2Total
Assets
Marketable securities
U.S. government and agency securities$438 $— $438 $387 $— $387 
Equity mutual funds6 — 6 5 — 5 
Foreign government bonds— 10 10 — 10 10 
Asset-backed securities— 168 168 — 192 192 
Mortgage-backed securities— 91 91 — 115 115 
Corporate notes and bonds— 638 638 — 763 763 
Municipal securities— 43 43 — 38 38 
Total Marketable securities444 950 1,394 392 1,118 1,510 
Derivative instruments
Fuel hedge contracts - call options— 6 6 — 11 11 
Interest rate swap agreements— 9 9 — 8 8 
Total Assets$444 $965 $1,409 $392 $1,137 $1,529 
Fixed-rate debt on the unaudited Condensed Consolidated Balance Sheets and the estimated fair value of long-term fixed-rate debt (in millions):
June 30, 2024December 31, 2023
Fixed-rate debt$1,447 $1,515 
Estimated fair value$1,367 $1,382 
v3.24.2.u1
LONG-TERM DEBT (Tables)
 6 Months Ended
Jun. 30, 2024
Debt Disclosure [Abstract]  
Schedule of Long-term Debt Instruments
Long-term debt obligations on the unaudited Condensed Consolidated Balance Sheets (in millions):
 June 30, 2024December 31, 2023
Fixed-rate notes payable due through 2029$68 $80 
Fixed-rate PSP notes payable due through 2031600 600 
Fixed-rate EETC payable due through 2025 & 2027779 835 
Variable-rate notes payable due through 20361,239 971 
Less debt issuance costs(14)(15)
Total debt2,672 2,471 
Less current portion(a)
(359)(289)
Long-term debt, less current portion$2,313 $2,182 
Weighted-average fixed-interest rate3.3 %3.4 %
Weighted-average variable-interest rate6.9 %6.8 %
(a) Excludes finance lease liabilities recognized within Current portion of long-term debt and finance leases in the unaudited Condensed Consolidated Balance Sheets as of December 31, 2023.
Schedule of Maturities of Long-term Debt
At June 30, 2024, long-term debt principal payments for the next five years and thereafter are as follows (in millions):
 Total
Remainder of 2024$164 
2025385 
2026342 
2027666 
2028176 
Thereafter953 
Total Principal Payments$2,686 
v3.24.2.u1
EMPLOYEE BENEFIT PLANS (Tables)
 6 Months Ended
Jun. 30, 2024
Retirement Benefits [Abstract]  
Schedule of Net Benefit Costs
Net periodic benefit costs for qualified defined-benefit plans include the following (in millions):
Three Months Ended June 30,Six Months Ended June 30,
 2024202320242023
Service cost$7 $7 $14 $14 
Pension expense included in Wages and benefits7 7 14 14 
Interest cost27 27 54 54 
Expected return on assets(32)(29)(64)(57)
Recognized actuarial loss4 6 9 12 
Pension expense (benefit) included in Non-operating Income$(1)$4 $(1)$9 
v3.24.2.u1
COMMITMENTS (Tables)
 6 Months Ended
Jun. 30, 2024
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Future Minimum Rental Payments for Operating Leases and Unrecorded Unconditional Purchase Obligtaions
Future minimum contractual payments for commitments as of June 30, 2024 (in millions):
Aircraft-Related Commitments(a)
Capacity Purchase Agreements and Other Obligations (b)
Remainder of 2024$864 $119 
20251,064 242 
20261,186 235 
20271,100 231 
2028151 234 
Thereafter715 658 
Total$5,080 $1,719 
(a)Includes contractual commitments for aircraft, engines, and aircraft maintenance. Option deliveries are excluded from minimum commitments until exercise.
(b)Excludes lease costs associated with capacity purchase agreements.
Schedule of Future Aircraft Delivery
Firm OrdersOptions and Other RightsTotal
Aircraft Type2024-20272026-20302024-2030
B73772105177
E1756410
   Total78109187
v3.24.2.u1
SHAREHOLDERS' EQUITY (Tables) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Equity [Abstract]        
Schedule of Accumulated Other Comprehensive Income (Loss)    
A roll forward of the amounts included in accumulated other comprehensive loss is shown below for the three and six months ended June 30, 2024 and 2023:
(in millions)Marketable SecuritiesEmployee Benefit PlanInterest Rate DerivativesTax EffectTotal
Balance at March 31, 2024$(45)$(354)$9 $96 $(294)
Change in value6 — — — 6 
Reclassifications into earnings— 4 — (3)1 
Balance at June 30, 2024$(39)$(350)$9 $93 $(287)
Balance at December 31, 2023$(46)$(358)$8 $97 $(299)
Change in value7 — 1 — 8 
Reclassifications into earnings— 8 — (4)4 
Balance at June 30, 2024$(39)$(350)$9 $93 $(287)

Marketable SecuritiesEmployee Benefit PlanInterest Rate DerivativesTax EffectTotal
Balance at March 31, 2023$(78)$(416)$12 $117 $(365)
Change in value(9)— 2 1 (6)
Reclassifications into earnings3 5 — (2)6 
Balance at June 30, 2023$(84)$(411)$14 $116 $(365)
Balance at December 31, 2022(104)(421)15 122 (388)
Change in value11 — (1)(2)8 
Reclassifications into earnings9 10 — (4)15 
Balance at June 30, 2023$(84)$(411)$14 $116 $(365)
  
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax $ 1 $ 6 $ 4 $ 15
Schedule of Stockholders' Equity Note, Warrants or Rights      
v3.24.2.u1
ACCUMULATED OTHER COMPREHENSIVE LOSS (Tables)
 6 Months Ended
Jun. 30, 2024
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Schedule of Accumulated Other Comprehensive Income (Loss)
A roll forward of the amounts included in accumulated other comprehensive loss is shown below for the three and six months ended June 30, 2024 and 2023:
(in millions)Marketable SecuritiesEmployee Benefit PlanInterest Rate DerivativesTax EffectTotal
Balance at March 31, 2024$(45)$(354)$9 $96 $(294)
Change in value6 — — — 6 
Reclassifications into earnings— 4 — (3)1 
Balance at June 30, 2024$(39)$(350)$9 $93 $(287)
Balance at December 31, 2023$(46)$(358)$8 $97 $(299)
Change in value7 — 1 — 8 
Reclassifications into earnings— 8 — (4)4 
Balance at June 30, 2024$(39)$(350)$9 $93 $(287)

Marketable SecuritiesEmployee Benefit PlanInterest Rate DerivativesTax EffectTotal
Balance at March 31, 2023$(78)$(416)$12 $117 $(365)
Change in value(9)— 2 1 (6)
Reclassifications into earnings3 5 — (2)6 
Balance at June 30, 2023$(84)$(411)$14 $116 $(365)
Balance at December 31, 2022(104)(421)15 122 (388)
Change in value11 — (1)(2)8 
Reclassifications into earnings9 10 — (4)15 
Balance at June 30, 2023$(84)$(411)$14 $116 $(365)
v3.24.2.u1
OPERATING SEGMENT INFORMATION (Tables) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Segment Reporting [Abstract]        
Schedule of Segment Reporting Information, by Segment
Operating segment information is as follows (in millions):
Three Months Ended June 30, 2024
MainlineRegionalHorizon
Consolidating & Other(a)
Air Group Adjusted(b)
Special Items(c)
Consolidated
Operating Revenue   
Passenger revenue$2,188 $463 $— $— $2,651 $— $2,651 
CPA revenue— — 112 (112)— — — 
Mileage Plan other revenue160 14 — — 174 — 174 
Cargo and other revenue69 — — 3 72 — 72 
Total Operating Revenue2,417 477 112 (109)2,897 — 2,897 
Operating Expenses
Operating expenses, excluding fuel1,516 322 92 (116)1,814 146 1,960 
Fuel expense520 100 — — 620 (5)615 
Total Operating Expenses2,036 422 92 (116)2,434 141 2,575 
Non-operating Income (Expense)6 — (12)— (6)— (6)
Income (Loss) Before Income Tax$387 $55 $8 $7 $457 $(141)$316 
Pretax Margin15.8 %10.9 %
Three Months Ended June 30, 2023
MainlineRegionalHorizon
Consolidating & Other(a)
Air Group Adjusted(b)
Special Items(c)
Consolidated
Operating Revenue
Passenger revenue$2,209 $389 $— $— $2,598 $— $2,598 
CPA revenue— — 92 (92)— — — 
Mileage Plan other revenue158 12 — — 170 — 170 
Cargo and other revenue67 — — 3 70 — 70 
Total Operating Revenue2,434 401 92 (89)2,838 — 2,838 
Operating Expenses
Operating expenses, excluding fuel1,468 279 87 (92)1,742 186 1,928 
Fuel expense490 81 — 1 572 1 573 
Total Operating Expenses1,958 360 87 (91)2,314 187 2,501 
Non-operating Income (Expense)3 — (10)1 (6)(6)(12)
Income (Loss) Before Income Tax$479 $41 $(5)$3 $518 $(193)$325 
Pretax Margin18.3 %11.5 %
Six Months Ended June 30, 2024
MainlineRegionalHorizon
Consolidating & Other(a)
Air Group Adjusted(b)
Special Items(c)
Consolidated
Operating Revenue   
Passenger revenue$3,817 $838 $— $— $4,655 $— $4,655 
CPA revenue— — 216 (216)— — — 
Mileage Plan other revenue309 29 — — 338 — 338 
Cargo and other revenue131 — — 5 136 — 136 
Total Operating Revenue4,257 867 216 (211)5,129 — 5,129 
Operating Expenses
Operating expenses, excluding fuel3,030 621 180 (218)3,613 180 3,793 
Fuel expense1,005 193 — — 1,198 (18)1,180 
Total Operating Expenses4,035 814 180 (218)4,811 162 4,973 
Non-operating Income (Expense)3 — (23)2 (18)— (18)
Income (Loss) Before Income Tax$225 $53 $13 $9 $300 $(162)$138 
Pretax Margin5.8 %2.7 %

Six Months Ended June 30, 2023
MainlineRegionalHorizon
Consolidating & Other(a)
Air Group Adjusted(b)
Special Items(c)
Consolidated
Operating Revenue
Passenger revenue$3,882 $700 $— $— $4,582 $— $4,582 
CPA revenue— — 170 (170)— — — 
Mileage Plan other revenue301 23 — — 324 — 324 
Cargo and other revenue124 — — 4 128 — 128 
Total Operating Revenue4,307 723 170 (166)5,034 — 5,034 
Operating Expenses
Operating expenses, excluding fuel2,858 535 171 (169)3,395 250 3,645 
Fuel expense1,051 166 — — 1,217 21 1,238 
Total Operating Expenses3,909 701 171 (169)4,612 271 4,883 
Non-operating Income (Expense)(3)— (18)2 (19)(6)(25)
Income (Loss) Before Income Tax$395 $22 $(19)$5 $403 $(277)$126 
Pretax Margin8.0 %2.5 %
      
Nonoperating Income (Expense) $ (6) $ (12) $ (18) $ (25)
Interest income 24 22 41 39
Operating Expenses, Excluding Fuel 1,960 1,928 3,793 3,645
Economic fuel 615 573 1,180 1,238
Operating Expenses 2,575 2,501 4,973 4,883
Income (Loss) Before Income Tax $ 316 $ 325 $ 138 $ 126
Pretax Margin, GAAP 10.90% 11.50% 2.70% 2.50%
Pretax Margin, Adjusted 15.80% 18.30% 5.80% 8.00%
v3.24.2.u1
GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2024
Jun. 30, 2023
Supplier compensation [Line Items]      
Supplier Proceeds   $ 162 $ 0
Supplier credit memos [Member]      
Supplier compensation [Line Items]      
Supplier credit memos $ 61    
v3.24.2.u1
Business Combinations, Asset Acquisitions, and Joint Venture Formation (Details)
$ / shares in Units, $ in Billions
Dec. 02, 2023
USD ($)
$ / shares
Business Acquisition [Line Items]  
Business Acquisition, Amount Per Share Paid To Each Holder of Record | $ / shares $ 18.00
Business Acquisition , Amount Paid To Each Holder Of Record | $ $ 1
v3.24.2.u1
FLEET TRANSITION (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Impaired Long-Lived Assets [Line Items]        
Special items - operating $ 146 $ 186 $ 180 $ 250
v3.24.2.u1
REVENUE FROM CONTRACTS WITH CUSTOMERS - Disaggregation of Revenue (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax $ 2,897 $ 2,838 $ 5,129 $ 5,034
Passenger [Member]        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax 2,651 2,598 4,655 4,582
Mileage plan other revenue [Member]        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax 174 170 338 324
Passenger Revenue [Member]        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax 2,651 2,598 4,655 4,582
Passenger Revenue [Member] | Passenger ticket revenue, including ticket breakage and net of taxes and fees [Member]        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax 2,226 2,207 3,874 3,855
Passenger Revenue [Member] | Passenger ancillary revenue [Member]        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax 135 123 243 227
Passenger Revenue [Member] | Mileage Plan passenger revenue [Member]        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax 290 268 538 500
Passenger Revenue [Member] | Passenger [Member]        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax 2,651 2,598 4,655 4,582
Mileage Plan Revenue [Member]        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax 464 438 876 824
Mileage Plan Revenue [Member] | Passenger ticket revenue, including ticket breakage and net of taxes and fees [Member]        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax 290 268 538 500
Mileage Plan Revenue [Member] | Mileage plan other revenue [Member]        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax 174 170 338 324
Cargo and Other Revenue [Member]        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax 72 70 136 128
Cargo and Other Revenue [Member] | Cargo revenue [Member]        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax 36 39 64 68
Cargo and Other Revenue [Member] | Other revenue [Member]        
Disaggregation of Revenue [Line Items]        
Revenue from Contract with Customer, Excluding Assessed Tax $ 36 $ 31 $ 72 $ 60
v3.24.2.u1
REVENUE FROM CONTRACTS WITH CUSTOMERS - Narrative (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Deferred Revenue Arrangement [Line Items]          
Receivable $ 370   $ 370   $ 383
Costs and Expenses 2,575 $ 2,501 4,973 $ 4,883  
Mileage Plan Revenue [Member]          
Deferred Revenue Arrangement [Line Items]          
Contract liability revenue recognized     613 602  
Receivable 87   87   $ 102
Mileage Plan Revenue [Member] | Mileage plan other revenue [Member]          
Deferred Revenue Arrangement [Line Items]          
Contract liability revenue recognized     (67) (52)  
Passenger Revenue [Member]          
Deferred Revenue Arrangement [Line Items]          
Contract liability revenue recognized $ 150 $ 103 $ 717 $ 588  
v3.24.2.u1
REVENUE FROM CONTRACTS WITH CUSTOMERS - Contract Liabilities Activity (Details) - Mileage Plan Revenue [Member] - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Change in Contract with Customer, Liability [Roll Forward]    
Total Deferred Revenue balance at January 1 $ 2,603 $ 2,497
Revenue recognized 613 602
Total Deferred Revenue balance at Sept 30 2,641 2,577
Passenger revenue [Member]    
Change in Contract with Customer, Liability [Roll Forward]    
Revenue recognized (508) (470)
Mileage plan other revenue [Member]    
Change in Contract with Customer, Liability [Roll Forward]    
Revenue recognized $ (67) $ (52)
v3.24.2.u1
FAIR VALUE MEASUREMENTS - FAIR VALUE OF ASSETS AND LIABILITIES (Details) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-Sale, Amortized Cost $ 1,400  
Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets, Fair Value Disclosure 1,409 $ 1,529
Debt Securities, Available-for-sale 1,394 1,510
Level 1 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets, Fair Value Disclosure 444 392
Debt Securities, Available-for-sale 444 392
Level 2 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Assets, Fair Value Disclosure 965 1,137
Debt Securities, Available-for-sale 950 1,118
Fair Value, Inputs, Level 3 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Long-term debt 601  
Fuel hedge contracts [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative instruments, assets 6 11
Fuel hedge contracts [Member] | Level 1 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative instruments, assets 0 0
Fuel hedge contracts [Member] | Level 2 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative instruments, assets 6 11
Interest rate swaps agreements [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative instruments, assets 9 8
Interest rate swaps agreements [Member] | Level 1 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative instruments, assets 0 0
Interest rate swaps agreements [Member] | Level 2 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Derivative instruments, assets 9 8
U.S. government and agency securities [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 438 387
U.S. government and agency securities [Member] | Level 1 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 438 387
U.S. government and agency securities [Member] | Level 2 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 0 0
Equity Funds [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 6 5
Equity Funds [Member] | Level 1 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 6 5
Equity Funds [Member] | Level 2 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 0 0
Foreign government bonds [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 10 10
Foreign government bonds [Member] | Level 1 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 0 0
Foreign government bonds [Member] | Level 2 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 10 10
Asset-backed securities [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 168 192
Asset-backed securities [Member] | Level 1 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 0 0
Asset-backed securities [Member] | Level 2 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 168 192
Mortgage-backed securities [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 91 115
Mortgage-backed securities [Member] | Level 1 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 0 0
Mortgage-backed securities [Member] | Level 2 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 91 115
Corporate notes and bonds [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 638 763
Corporate notes and bonds [Member] | Level 1 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 0 0
Corporate notes and bonds [Member] | Level 2 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 638 763
Municipal securities [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 43 38
Municipal securities [Member] | Level 1 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale 0 0
Municipal securities [Member] | Level 2 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Debt Securities, Available-for-sale $ 43 $ 38
v3.24.2.u1
FAIR VALUE MEASUREMENTS - MATURITIES FOR MARKETABLE SECURITIES (Details)
$ in Millions
Jun. 30, 2024
USD ($)
Cost Basis  
Due in one year or less $ 600
Due after one year through five years 785
Due after five years through 10 years 29
Debt Securities, Available-for-Sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Amortized Cost 13
Debt Securities, Available-for-Sale, Maturity, without Single Maturity Date, Amortized Cost 4
Debt Securities, Available-for-Sale, With Maturities - Cost Basis 1,431
Total 1,400
Fair Value  
Due in one year or less 592
Due after one year through five years 758
Due after five years through 10 years 26
Debt Securities, Available-for-Sale, Maturity, Allocated and Single Maturity Date, Rolling after 10 Years, Fair Value 12
Debt Securities, Available-for-Sale, Maturity, without Single Maturity Date, Fair Value 6
Debt Securities, Available-for-Sale, With Maturities - Fair Value $ 1,394
v3.24.2.u1
FAIR VALUE MEASUREMENTS - LONG-TERM DEBT (Details) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Fair Value, Inputs, Level 3 [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long-term debt $ 601  
Carrying amount [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long-term debt 1,447 $ 1,515
Fair value [Member]    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Long-term debt $ 1,367 $ 1,382
v3.24.2.u1
LONG-TERM DEBT - SCHEDULE OF LONG-TERM DEBT (Details) - USD ($)
$ / shares in Units, $ in Millions
 1 Months Ended 3 Months Ended 6 Months Ended
Jul. 31, 2024
Jun. 30, 2024
Jun. 30, 2024
Jun. 30, 2023
Dec. 31, 2023
Debt Instrument [Line Items]          
Debt Issuance Costs, Net   $ (14) $ (14)   $ (15)
Total   2,672 2,672   2,471
Less current portion   (359) (359)   (289)
Long-term debt, less current portion   $ 2,313 $ 2,313   $ 2,182
Weighted-average fixed-interest rate   3.30% 3.30%   3.40%
Weighted-average variable-interest rate   6.90% 6.90%   6.80%
Long-term debt payments     $ 149 $ 149  
Class of Warrant or Right, Exercise Price of Warrants or Rights   $ 39.06 $ 39.06    
Proceeds from issuance of debt     $ 279 $ 0  
Proceeds from Issuance of Long-term Debt     $ 348    
Debt, Weighted Average Interest Rate   4.70% 4.70%    
Proceeds from Issuance of Long-term Debt     $ 348    
Line of Credit Facility, Maximum Borrowing Capacity   $ 626 626    
Scheduled Debt Payments [Member]          
Debt Instrument [Line Items]          
Long-term debt payments     149    
Fixed rate notes payable due through 2029 [Member]          
Debt Instrument [Line Items]          
Total   68 68   $ 80
US Treasury CARES Act Loan [Member]          
Debt Instrument [Line Items]          
Adjustments to Additional Paid in Capital, Warrant Issued     30    
July 2020 EETC          
Debt Instrument [Line Items]          
Total   779 779   835
Credit Facility 1 [Member] | Secured by certain accounts receivable, spare engines, spare parts and ground service equipment [Member]          
Debt Instrument [Line Items]          
Line of Credit Facility, Maximum Borrowing Capacity   150 150    
PSP Notes Payable through 2031          
Debt Instrument [Line Items]          
Total   600 600   600
Variable rate notes payable due through 2035          
Debt Instrument [Line Items]          
Total   1,239 1,239   $ 971
Proceeds from Issuance of Long-Term Debt, Cash proceeds [Member]          
Debt Instrument [Line Items]          
Proceeds from Issuance of Long-term Debt   280      
Proceeds from Issuance of Long-term Debt   280      
Proceeds from Issuance of Long-Term Debt, Cash proceeds [Member] | Subsequent Event [Member]          
Debt Instrument [Line Items]          
Proceeds from Issuance of Long-term Debt $ 67        
Proceeds from Issuance of Long-term Debt $ 67        
Proceeds from Issuance of Long-Term Debt, Noncash proceeds [Member]          
Debt Instrument [Line Items]          
Proceeds from Issuance of Long-term Debt     68    
Proceeds from Issuance of Long-term Debt     68    
Variable Rate debt with interest rate swap [Member] | Interest rate swaps agreements [Member]          
Debt Instrument [Line Items]          
Derivative, Notional Amount   223 223    
Derivative, Notional Amount   $ 223 $ 223    
v3.24.2.u1
LONG-TERM DEBT LONG-TERM DEBT - FUTURE PAYMENTS (Details)
$ in Millions
Jun. 30, 2024
USD ($)
Long-term Debt, Fiscal Year Maturity [Abstract]  
Remainder of 2021 $ 164
2022 385
2023 342
2024 666
2025 176
Thereafter 953
Total $ 2,686
v3.24.2.u1
LONG-TERM DEBT - LINE OF CREDIT (Details) - USD ($)
$ in Millions
 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Line of Credit Facility [Line Items]    
Proceeds from Issuance of Secured Debt $ 279 $ 0
Line of Credit Facility, Maximum Borrowing Capacity 626  
Line of Credit Facility, Asset Restrictions 500  
Credit Facility 1 [Member] | Secured by certain accounts receivable, spare engines, spare parts and ground service equipment [Member]    
Line of Credit Facility [Line Items]    
Line of Credit Facility, Maximum Borrowing Capacity 150  
Credit Facility 2 [Member] | Secured by aircraft [Member]    
Line of Credit Facility [Line Items]    
Line of Credit Facility, Maximum Borrowing Capacity 400  
Credit Facility 3 [Member] | Secured by aircraft [Member]    
Line of Credit Facility [Line Items]    
Line of Credit Facility, Maximum Borrowing Capacity 76  
US Treasury CARES Act Loan [Member]    
Line of Credit Facility [Line Items]    
Adjustments to Additional Paid in Capital, Warrant Issued $ 30  
v3.24.2.u1
EMPLOYEE BENEFIT PLANS - NET PENSION EXPENSE (Details) - Qualified Defined Benefit [Member] - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]        
Service cost $ 7 $ 7 $ 14 $ 14
Interest cost 27 27 54 54
Expected return on assets 32 29 64 57
Recognized actuarial loss (gain) (4) (6) (9) (12)
Wages and Benefits [Member]        
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]        
Net pension expense 7 7 14 14
Nonoperating Income (Expense) [Member]        
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]        
Net pension expense $ (1) $ 4 $ (1) $ 9
v3.24.2.u1
COMMITMENTS (Details)
$ in Millions
 3 Months Ended
Jun. 30, 2024
USD ($)
aircraft
Unrecorded Unconditional Purchase Obligation [Line Items]  
Committed to Purchase (in Aircraft) | aircraft 187
Firm aircraft commitment  
Unrecorded Unconditional Purchase Obligation [Line Items]  
Committed to Purchase (in Aircraft) | aircraft 78
Aircraft purchase option  
Unrecorded Unconditional Purchase Obligation [Line Items]  
Committed to Purchase (in Aircraft) | aircraft 109
B737 MAX [Member]  
Unrecorded Unconditional Purchase Obligation [Line Items]  
Committed to Purchase (in Aircraft) | aircraft 177
B737 MAX [Member] | Firm aircraft commitment  
Unrecorded Unconditional Purchase Obligation [Line Items]  
Committed to Purchase (in Aircraft) | aircraft 72
B737 MAX [Member] | Aircraft purchase option  
Unrecorded Unconditional Purchase Obligation [Line Items]  
Committed to Purchase (in Aircraft) | aircraft 105
E175 [Member]  
Unrecorded Unconditional Purchase Obligation [Line Items]  
Committed to Purchase (in Aircraft) | aircraft 10
E175 [Member] | Firm aircraft commitment  
Unrecorded Unconditional Purchase Obligation [Line Items]  
Committed to Purchase (in Aircraft) | aircraft 6
E175 [Member] | Aircraft purchase option  
Unrecorded Unconditional Purchase Obligation [Line Items]  
Committed to Purchase (in Aircraft) | aircraft 4
Aircraft-related Commitments [Member]  
Unrecorded Unconditional Purchase Obligation [Line Items]  
Remainder of 2023 $ 864
2024 1,064
2025 1,186
2026 1,100
2027 151
Thereafter 715
Unrecorded Unconditional Purchase Obligation 5,080
CPA and Other [Member]  
Unrecorded Unconditional Purchase Obligation [Line Items]  
Remainder of 2023 119
2024 242
2025 235
2026 231
2027 234
Thereafter 658
Unrecorded Unconditional Purchase Obligation 1,719
Virgin Group trademark license agreement [Member]  
Unrecorded Unconditional Purchase Obligation [Line Items]  
Loss Contingency, Damages Sought, Value $ 8
v3.24.2.u1
SHAREHOLDERS' EQUITY, COMMON STOCK REPURCHASE (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended 94 Months Ended
Jun. 30, 2024
Mar. 31, 2024
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2023
Aug. 31, 2015
Class of Stock [Line Items]                
Stock Repurchased During Period, Value $ 28 $ 21 $ 39 $ 18        
2015 1 Billion Repurchase Program [Member]                
Class of Stock [Line Items]                
Stock repurchase program, authorized amount               $ 1,000
Stock repurchased during period (shares)         1,200,000 1,300,000 12,300,000  
Stock Repurchased During Period, Value         $ 49 $ 57 $ 738  
Share Repurchase Program, Remaining Authorized, Amount $ 262       $ 262      
v3.24.2.u1
SHAREHOLDERS' EQUITY , WARRANT ACTIVITY (Details)
$ / shares in Units, $ in Millions
 6 Months Ended
Jun. 30, 2024
USD ($)
$ / shares
shares
Class of Warrant or Right [Line Items]  
Class of Warrant or Right, Outstanding 1,882,517
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares $ 39.06
US Treasury CARES Act Loan [Member]  
Class of Warrant or Right [Line Items]  
Adjustments to Additional Paid in Capital, Warrant Issued | $ $ 30
US Treasury CARES Act Loan [Member]  
Class of Warrant or Right [Line Items]  
Class of Warrant or Right, Outstanding 427,080
CARES Act PSP [Domain]  
Class of Warrant or Right [Line Items]  
Class of Warrant or Right, Outstanding 1,455,437
v3.24.2.u1
ACCUMULATED OTHER COMPREHENSIVE LOSS (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Mar. 31, 2024
Dec. 31, 2023
Mar. 31, 2023
Dec. 31, 2022
Accumulated Other Comprehensive Income (Loss) [Line Items]                
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax $ 1 $ 6 $ 4 $ 15        
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax 6 (6) 8 8        
AOCI Tax, Attributable to Parent 93 116 93 116 $ 96 $ 97 $ 117 $ 122
Accumulated Other Comprehensive Income (Loss), Net of Tax (287) (365) (287) (365) (294) (299) (365) (388)
Reclassification from AOCI, Current Period, Tax (3) (2) (4) (4)        
Income tax effect 0 1 0 (2)        
Marketable Securities                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
AOCI before Tax, Attributable to Parent (39) (84) (39) (84) (45) (46) (78) (104)
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent 6 (9) 7 11        
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent 0 3 0 9        
AOCI Employee Benefit Plan                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
AOCI before Tax, Attributable to Parent (350) (411) (350) (411) (354) (358) (416) (421)
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent 0 0 0 0        
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent 4 5 8 10        
AOCI - Interest Rate Derivatives                
Accumulated Other Comprehensive Income (Loss) [Line Items]                
AOCI before Tax, Attributable to Parent 9 14 9 14 $ 9 $ 8 $ 12 $ 15
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent 0 2 1 (1)        
Reclassification from AOCI, Current Period, before Tax, Attributable to Parent $ 0 $ 0 $ 0 $ 0        
v3.24.2.u1
OPERATING SEGMENT INFORMATION (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax $ 2,897 $ 2,838 $ 5,129 $ 5,034
Operating expenses        
Operating Expenses, Excluding Fuel 1,960 1,928 3,793 3,645
Economic fuel 615 573 1,180 1,238
Total Operating Expenses 2,575 2,501 4,973 4,883
Nonoperating Income (Expense)        
Interest income 24 22 41 39
Interest expense (36) (28) (71) (56)
Interest capitalized 6 7 12 14
Other—net 0 (7) 0 (16)
Nonoperating Income (Expense) (6) (12) (18) (25)
Costs and Expenses, Total $ 2,575 $ 2,501 $ 4,973 $ 4,883
Pretax Margin, Adjusted 15.80% 18.30% 5.80% 8.00%
Pretax Margin, GAAP 10.90% 11.50% 2.70% 2.50%
Mileage Plan Revenue [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax $ 464 $ 438 $ 876 $ 824
Air Group Adjusted [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 2,897 2,838 5,129 5,034
Operating expenses        
Operating Expenses, Excluding Fuel 1,814 1,742 3,613 3,395
Economic fuel 620 572 1,198 1,217
Total Operating Expenses 2,434 2,314 4,811 4,612
Nonoperating Income (Expense)        
Nonoperating Income (Expense) (6) (6) (18) (19)
Income (loss) before income tax 457 518 300 403
Alaska Mainline [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 2,417 2,434 4,257 4,307
Operating expenses        
Operating Expenses, Excluding Fuel 1,516 1,468 3,030 2,858
Economic fuel 520 490 1,005 1,051
Total Operating Expenses 2,036 1,958 4,035 3,909
Nonoperating Income (Expense)        
Nonoperating Income (Expense) 6 3 3 (3)
Income (loss) before income tax 387 479 225 395
Alaska Regional [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 477 401 867 723
Operating expenses        
Operating Expenses, Excluding Fuel 322 279 621 535
Economic fuel 100 81 193 166
Total Operating Expenses 422 360 814 701
Nonoperating Income (Expense)        
Nonoperating Income (Expense) 0 0 0 0
Income (loss) before income tax 55 41 53 22
Horizon [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 112 92 216 170
Operating expenses        
Operating Expenses, Excluding Fuel 92 87 180 171
Economic fuel 0 0 0 0
Total Operating Expenses 92 87 180 171
Nonoperating Income (Expense)        
Nonoperating Income (Expense) (12) (10) (23) (18)
Income (loss) before income tax 8 (5) 13 (19)
Consolidating and Other [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax (109) (89) (211) (166)
Operating expenses        
Operating Expenses, Excluding Fuel (116) (92) (218) (169)
Economic fuel 0 1 0 0
Total Operating Expenses (116) (91) (218) (169)
Nonoperating Income (Expense)        
Nonoperating Income (Expense) 0 1 2 2
Income (loss) before income tax 7 3 9 5
Special Charges [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 0 0 0 0
Operating expenses        
Operating Expenses, Excluding Fuel 146 186 180 250
Economic fuel (5) 1 (18) 21
Total Operating Expenses 141 187 162 271
Nonoperating Income (Expense)        
Nonoperating Income (Expense) 0 (6) 0 (6)
Income (loss) before income tax (141) (193) (162) (277)
Passenger [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 2,651 2,598 4,655 4,582
Passenger [Member] | Air Group Adjusted [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 2,651 2,598 4,655 4,582
Passenger [Member] | Alaska Mainline [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 2,188 2,209 3,817 3,882
Passenger [Member] | Alaska Regional [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 463 389 838 700
Passenger [Member] | Horizon [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 0 0 0 0
Passenger [Member] | Consolidating and Other [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 0 0 0 0
Passenger [Member] | Special Charges [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 0 0 0 0
Capacity Purchase Agreements [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 0 0 0 0
Capacity Purchase Agreements [Member] | Air Group Adjusted [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 0 0 0 0
Capacity Purchase Agreements [Member] | Alaska Mainline [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 0 0 0 0
Capacity Purchase Agreements [Member] | Alaska Regional [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 0 0 0 0
Capacity Purchase Agreements [Member] | Horizon [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 112 92 216 170
Capacity Purchase Agreements [Member] | Consolidating and Other [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax (112) (92) (216) (170)
Capacity Purchase Agreements [Member] | Special Charges [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 0 0 0 0
Mileage plan other revenue [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 174 170 338 324
Mileage plan other revenue [Member] | Mileage Plan Revenue [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 174 170 338 324
Mileage plan other revenue [Member] | Air Group Adjusted [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 174 170 338 324
Mileage plan other revenue [Member] | Alaska Mainline [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 160 158 309 301
Mileage plan other revenue [Member] | Alaska Regional [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 14 12 29 23
Mileage plan other revenue [Member] | Horizon [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 0 0 0 0
Mileage plan other revenue [Member] | Consolidating and Other [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 0 0 0 0
Mileage plan other revenue [Member] | Special Charges [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 0 0 0 0
Cargo and Freight [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 72 70 136 128
Cargo and Freight [Member] | Air Group Adjusted [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 72 70 136 128
Cargo and Freight [Member] | Alaska Mainline [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 69 67 131 124
Cargo and Freight [Member] | Alaska Regional [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 0 0 0 0
Cargo and Freight [Member] | Horizon [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 0 0 0 0
Cargo and Freight [Member] | Consolidating and Other [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax 3 3 5 4
Cargo and Freight [Member] | Special Charges [Member]        
Operating Revenues        
Revenue from Contract with Customer, Excluding Assessed Tax $ 0 $ 0 $ 0 $ 0
v3.24.2.u1
OPERATING SEGMENT INFORMATION, ASSETS (Details) - USD ($)
$ in Millions
Jun. 30, 2024
Dec. 31, 2023
Total assets $ 15,342 $ 14,613
Alaska Airlines [Member]    
Total assets 20,674 19,937
Horizon [Member]    
Total assets 1,383 1,352
Consolidating and Other [Member]    
Total assets $ (6,715) $ (6,676)
v3.24.2.u1
Unusual or Infrequently Occurring Items (Details) - USD ($)
$ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Unusual or Infrequent Item, or Both [Line Items]        
Special items - operating $ 146 $ 186 $ 180 $ 250
Special items - net non-operating 0 (6) 0 (6)
Fleet transition - impairment [Member]        
Unusual or Infrequent Item, or Both [Line Items]        
Special items - operating 41 186 67 199
Labor agreements        
Unusual or Infrequent Item, or Both [Line Items]        
Special items - operating 30 0 30 51
Integration costs        
Unusual or Infrequent Item, or Both [Line Items]        
Special items - operating 30 0 38 0
Litigation        
Unusual or Infrequent Item, or Both [Line Items]        
Special items - operating $ 45 $ 0 $ 45 $ 0
v3.24.2.u1
Earnings Per Share (Details) - shares
 3 Months Ended 6 Months Ended
Jun. 30, 2024
Jun. 30, 2023
Jun. 30, 2024
Jun. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Incremental Common Shares Attributable to Dilutive Effect of Share-Based Payment Arrangements 1,627,000 1,066,000.000 1,421,000 962,000
Incremental Common Shares Attributable to Dilutive Effect of Call Options and Warrants 346,000 413,000 283,000 428,000
Stock Compensation Plan Member        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 1,100,000 1,700,000 1,900,000 2,100,000
Warrant        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount 200,000 100,000 200,000 100,000
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