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OPERATING SEGMENT INFORMATION | 6 Months Ended
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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
| Mainline |  | Regional |  | Horizon |  | 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 revenue | 160 |  |  | 14 |  |  | — |  |  | — |  |  | 174 |  |  | — |  |  | 174 |
Cargo and other revenue | 69 |  |  | — |  |  | — |  |  | 3 |  |  | 72 |  |  | — |  |  | 72 |
Total Operating Revenue | 2,417 |  |  | 477 |  |  | 112 |  |  | (109) |  |  | 2,897 |  |  | — |  |  | 2,897 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses, excluding fuel | 1,516 |  |  | 322 |  |  | 92 |  |  | (116) |  |  | 1,814 |  |  | 146 |  |  | 1,960 |
Fuel expense | 520 |  |  | 100 |  |  | — |  |  | — |  |  | 620 |  |  | (5) |  |  | 615 |
Total Operating Expenses | 2,036 |  |  | 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 Margin |  |  |  |  |  |  |  |  | 15.8 | % |  |  |  | 10.9 | %
| Three Months Ended June 30, 2023
| Mainline |  | Regional |  | Horizon |  | 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 revenue | 158 |  |  | 12 |  |  | — |  |  | — |  |  | 170 |  |  | — |  |  | 170 |
Cargo and other revenue | 67 |  |  | — |  |  | — |  |  | 3 |  |  | 70 |  |  | — |  |  | 70 |
Total Operating Revenue | 2,434 |  |  | 401 |  |  | 92 |  |  | (89) |  |  | 2,838 |  |  | — |  |  | 2,838 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses, excluding fuel | 1,468 |  |  | 279 |  |  | 87 |  |  | (92) |  |  | 1,742 |  |  | 186 |  |  | 1,928 |
Fuel expense | 490 |  |  | 81 |  |  | — |  |  | 1 |  |  | 572 |  |  | 1 |  |  | 573 |
Total Operating Expenses | 1,958 |  |  | 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 Margin |  |  |  |  |  |  |  |  | 18.3 | % |  |  |  | 11.5 | %
| Six Months Ended June 30, 2024
| Mainline |  | Regional |  | Horizon |  | 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 revenue | 309 |  |  | 29 |  |  | — |  |  | — |  |  | 338 |  |  | — |  |  | 338 |
Cargo and other revenue | 131 |  |  | — |  |  | — |  |  | 5 |  |  | 136 |  |  | — |  |  | 136 |
Total Operating Revenue | 4,257 |  |  | 867 |  |  | 216 |  |  | (211) |  |  | 5,129 |  |  | — |  |  | 5,129 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses, excluding fuel | 3,030 |  |  | 621 |  |  | 180 |  |  | (218) |  |  | 3,613 |  |  | 180 |  |  | 3,793 |
Fuel expense | 1,005 |  |  | 193 |  |  | — |  |  | — |  |  | 1,198 |  |  | (18) |  |  | 1,180 |
Total Operating Expenses | 4,035 |  |  | 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 Margin |  |  |  |  |  |  |  |  | 5.8 | % |  |  |  | 2.7 | %
| Six Months Ended June 30, 2023
| Mainline |  | Regional |  | Horizon |  | 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 revenue | 301 |  |  | 23 |  |  | — |  |  | — |  |  | 324 |  |  | — |  |  | 324 |
Cargo and other revenue | 124 |  |  | — |  |  | — |  |  | 4 |  |  | 128 |  |  | — |  |  | 128 |
Total Operating Revenue | 4,307 |  |  | 723 |  |  | 170 |  |  | (166) |  |  | 5,034 |  |  | — |  |  | 5,034 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses, excluding fuel | 2,858 |  |  | 535 |  |  | 171 |  |  | (169) |  |  | 3,395 |  |  | 250 |  |  | 3,645 |
Fuel expense | 1,051 |  |  | 166 |  |  | — |  |  | — |  |  | 1,217 |  |  | 21 |  |  | 1,238 |
Total Operating Expenses | 3,909 |  |  | 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 Margin |  |  |  |  |  |  |  |  | 8.0 | % |  |  |  | 2.5 | %

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