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OPERATING SEGMENT INFORMATION | 9 Months Ended
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Sep. 30, 2024
Segment Reporting [Abstract] |
OPERATING SEGMENT INFORMATION | OPERATING SEGMENT INFORMATION Alaska Air Group has three operating airlines – Alaska, Hawaiian, 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. Air Group's network and schedules are centrally managed for all its operating airlines and CPA flying. By matching the appropriate fleet type and schedule timing, management seeks to optimize Air Group consolidated revenue and income. Following the acquisition of Hawaiian, the Chief Operating Decision Maker (CODM) began to review financial results for Hawaiian to assess performance and make resource allocation decisions. As a result, the Company determined Hawaiian was an operating and reportable segment beginning in the third quarter of 2024. Air Group has plans to combine Alaska and Hawaiian under a single operating certificate in the near term. At that time, management anticipates the discrete information provided to the CODM specific to each carrier will similarly be combined, and resource allocation decisions and review will be executed at the combined level. Management continues to evaluate and refine the reporting and information provided to the CODM utilized in their review of financial results and resource allocation decisions. Increasingly, the Company is managed as a single component that provides air transportation and loyalty benefits for passengers and cargo services. Managing the business in an integrated manner enables our team to leverage its comprehensive network, route scheduling system, and fleet as a single business to deliver optimized consolidated financial results. Management continues to evaluate changes to internal reporting that may impact the discrete information provided to the CODM to better align with the way the business is managed. These changes may have an impact on the Company's reportable segments once finalized. The CODM reviews financial performance information as part of three reportable operating segments: •Alaska Airlines - includes scheduled air transportation on Alaska's Boeing jet aircraft for passengers and cargo . •Hawaiian Airlines - includes scheduled air transportation on Hawaiian's Boeing and Airbus jet aircraft for passengers and cargo. •Regional - includes Horizon's and other third-party carriers’ scheduled air transportation on E175 jet aircraft for passengers 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. In addition to the reportable segments, the Company has a "Consolidating and Other" column which reflects Air Group parent company activity, Horizon CPA, 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. The "Special Items" column represents expenses classified as special items and mark-to-market fuel hedge accounting adjustments. Operating segment information is as follows:
| Three Months Ended September 30, 2024
(in millions) | Alaska Airlines |  | Hawaiian Airlines |  | Regional |  | Consolidating & Other |  | Air Group Adjusted |  | Special Items |  | Consolidated
Operating Revenue |  |  |  |  |  |  |  |  |  |  |  |  |
Passenger revenue | $ | 2,261 |  |  | $ | 84 |  |  | $ | 476 |  |  | $ | — |  |  | $ | 2,821 |  |  | $ | — |  |  | $ | 2,821 |
Loyalty program other revenue | 151 |  |  | 5 |  |  | 15 |  |  | — |  |  | 171 |  |  | — |  |  | 171 |
Cargo and other revenue | 71 |  |  | 6 |  |  | — |  |  | 3 |  |  | 80 |  |  | — |  |  | 80 |
Total Operating Revenue | 2,483 |  |  | 95 |  |  | 491 |  |  | 3 |  |  | 3,072 |  |  | — |  |  | 3,072 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses, excluding fuel | 1,640 |  |  | 82 |  |  | 325 |  |  | (14) |  |  | 2,033 |  |  | 74 |  |  | 2,107 |
Fuel expense | 510 |  |  | 23 |  |  | 95 |  |  | — |  |  | 628 |  |  | (4) |  |  | 624 |
Total Operating Expenses | 2,150 |  |  | 105 |  |  | 420 |  |  | (14) |  |  | 2,661 |  |  | 70 |  |  | 2,731 |
Non-operating Income (Expense) | 3 |  |  | (4) |  |  | — |  |  | (11) |  |  | (12) |  |  | (1) |  |  | (13) |
Income (Loss) Before Income Tax | $ | 336 |  |  | $ | (14) |  |  | $ | 71 |  |  | $ | 6 |  |  | $ | 399 |  |  | $ | (71) |  |  | $ | 328 |
Pretax Margin |  |  |  |  |  |  |  |  | 13.0 | % |  |  |  | 10.7 | %
| Three Months Ended September 30, 2023
(in millions) | Alaska Airlines |  | Hawaiian Airlines |  | Regional |  | Consolidating & Other |  | Air Group Adjusted |  | Special Items |  | Consolidated
Operating Revenue |  |  |  |  |  |  |  |  |  |  |  |  |
Passenger revenue | $ | 2,201 |  |  | $ | — |  |  | $ | 417 |  |  | $ | — |  |  | $ | 2,618 |  |  | $ | — |  |  | $ | 2,618 |
Loyalty program other revenue | 146 |  |  | — |  |  | 13 |  |  | — |  |  | 159 |  |  | — |  |  | 159 |
Cargo and other revenue | 60 |  |  | — |  |  | — |  |  | 2 |  |  | 62 |  |  | — |  |  | 62 |
Total Operating Revenue | 2,407 |  |  | — |  |  | 430 |  |  | 2 |  |  | 2,839 |  |  | — |  |  | 2,839 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses, excluding fuel | 1,484 |  |  | — |  |  | 297 |  |  | (3) |  |  | 1,778 |  |  | 156 |  |  | 1,934 |
Fuel expense | 621 |  |  | — |  |  | 108 |  |  | — |  |  | 729 |  |  | (35) |  |  | 694 |
Total Operating Expenses | 2,105 |  |  | — |  |  | 405 |  |  | (3) |  |  | 2,507 |  |  | 121 |  |  | 2,628 |
Non-operating Income (Expense) | — |  |  | — |  |  | — |  |  | (10) |  |  | (10) |  |  | (8) |  |  | (18) |
Income (Loss) Before Income Tax | $ | 302 |  |  | $ | — |  |  | $ | 25 |  |  | $ | (5) |  |  | $ | 322 |  |  | $ | (129) |  |  | $ | 193 |
Pretax Margin |  |  |  |  |  |  |  |  | 11.4 | % |  |  |  | 6.8 | %
| Nine Months Ended September 30, 2024
(in millions) | Alaska Airlines |  | Hawaiian Airlines |  | Regional |  | Consolidating & Other |  | Air Group Adjusted |  | Special Items |  | Consolidated
Operating Revenue |  |  |  |  |  |  |  |  |  |  |  |  |
Passenger revenue | $ | 6,078 |  |  | $ | 84 |  |  | $ | 1,314 |  |  | $ | — |  |  | $ | 7,476 |  |  | $ | — |  |  | $ | 7,476 |
Loyalty program other revenue | 460 |  |  | 5 |  |  | 44 |  |  | — |  |  | 509 |  |  | — |  |  | 509 |
Cargo and other revenue | 202 |  |  | 6 |  |  | — |  |  | 8 |  |  | 216 |  |  | — |  |  | 216 |
Total Operating Revenue | 6,740 |  |  | 95 |  |  | 1,358 |  |  | 8 |  |  | 8,201 |  |  | — |  |  | 8,201 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses, excluding fuel | 4,670 |  |  | 82 |  |  | 946 |  |  | (52) |  |  | 5,646 |  |  | 254 |  |  | 5,900 |
Fuel expense | 1,515 |  |  | 23 |  |  | 288 |  |  | — |  |  | 1,826 |  |  | (22) |  |  | 1,804 |
Total Operating Expenses | 6,185 |  |  | 105 |  |  | 1,234 |  |  | (52) |  |  | 7,472 |  |  | 232 |  |  | 7,704 |
Non-operating Income (Expense) | 6 |  |  | (4) |  |  | — |  |  | (32) |  |  | (30) |  |  | (1) |  |  | (31) |
Income (Loss) Before Income Tax | $ | 561 |  |  | $ | (14) |  |  | $ | 124 |  |  | $ | 28 |  |  | $ | 699 |  |  | $ | (233) |  |  | $ | 466 |
Pretax Margin |  |  |  |  |  |  |  |  | 8.5 | % |  |  |  | 5.7 | %
| Nine Months Ended September 30, 2023
(in millions) | Alaska Airlines |  | Hawaiian Airlines |  | Regional |  | Consolidating & Other |  | Air Group Adjusted |  | Special Items |  | Consolidated
Operating Revenue |  |  |  |  |  |  |  |  |  |  |  |  |
Passenger revenue | $ | 6,082 |  |  | $ | — |  |  | $ | 1,118 |  |  | $ | — |  |  | $ | 7,200 |  |  | $ | — |  |  | $ | 7,200 |
Loyalty program other revenue | 447 |  |  | — |  |  | 36 |  |  | — |  |  | 483 |  |  | — |  |  | 483 |
Cargo and other revenue | 184 |  |  | — |  |  | — |  |  | 6 |  |  | 190 |  |  | — |  |  | 190 |
Total Operating Revenue | 6,713 |  |  | — |  |  | 1,154 |  |  | 6 |  |  | 7,873 |  |  | — |  |  | 7,873 |
Operating Expenses |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses, excluding fuel | 4,342 |  |  | — |  |  | 832 |  |  | (1) |  |  | 5,173 |  |  | 406 |  |  | 5,579 |
Fuel expense | 1,672 |  |  | — |  |  | 274 |  |  | — |  |  | 1,946 |  |  | (14) |  |  | 1,932 |
Total Operating Expenses | 6,014 |  |  | — |  |  | 1,106 |  |  | (1) |  |  | 7,119 |  |  | 392 |  |  | 7,511 |
Non-operating Income (Expense) | (3) |  |  | — |  |  | — |  |  | (26) |  |  | (29) |  |  | (14) |  |  | (43) |
Income (Loss) Before Income Tax | $ | 696 |  |  | $ | — |  |  | $ | 48 |  |  | $ | (19) |  |  | $ | 725 |  |  | $ | (406) |  |  | $ | 319 |
Pretax Margin |  |  |  |  |  |  |  |  | 9.2 | % |  |  |  | 4.1 | %

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