Q2 2024 Alaska Air Group Inc Earnings Call Transcript
Key Points
- Alaska Air Group Inc (ALK) reported a record $2.9 billion in revenue for Q2 2024, the highest quarterly result in its history.
- The company achieved a 15.8% adjusted pretax margin, likely leading the industry in profitability.
- A tentative agreement with flight attendants includes a 32% increase in compensation, reflecting a commitment to employee welfare.
- Operational excellence was demonstrated with a 99.5% completion rate each month of the quarter.
- The company is making significant investments in premium seating, which is expected to drive revenue growth.
- The company is facing a $223 million impact from flight 1282 and a fleet grounding incident earlier in the year.
- There is a noted pressure on unit costs, expected to be in the high single digits for the back half of the year.
- The domestic fare environment has moderated, impacting revenue expectations.
- Capacity growth for the full year is expected to be less than 2.5%, lower than initially configured.
- The company is adjusting its full-year EPS guidance downward by $0.25 due to the flight attendant deal and the current domestic environment.
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Good morning, ladies and gentlemen, and welcome to the Alaska Air Group 2024 second quarter earnings call. (Operator Instructions)
I would now like to turn the call over to Alaska Air Group's Vice President of Finance, Planning and Investor Relations Ryan St. John.
Thank you, operator, and good morning. Thank you for joining us for our second quarter 2024 earnings call. Yesterday, we issued our earnings release along with several accompanying slides detailing our results, which are available at investor.alaskaair.com.
On today's call, you'll hear updates from Ben, Andrew, and Shane. Several others of our Management team are also on the line to answer your questions during the Q&A portion of the call. This morning, Air Group reported second quarter GAAP net income of $220 million. Excluding special items and mark-to-market fuel hedge adjustments, Air Group reported adjusted net income of $327
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