Alaska Air Q4 Adjusted EPS $0.43 Beats Guidance; Integration Milestone and $1.2B Cash Flow
Alaska Air reported Q4 adjusted EPS of $0.43, beating its guidance of $0.10 and lifting RASM 0.6% year-over-year on $3.6B revenue. The carrier achieved a single operating certificate with Hawaiian Airlines, generated $1.2B operating cash flow, and announced its largest fleet order including 105 Boeing 737-10 and five 787 aircraft.
1. Q4 Earnings and Revenue Metrics
Alaska Air Group reported GAAP net income of $21 million, or $0.18 per share, for the quarter ended December 31, 2025, compared with $71 million, or $0.55 per share, in the year-ago period. On an adjusted basis—excluding special items and hedge adjustments—the airline earned $50 million, or $0.43 per share, topping the consensus estimate of $0.11. Fourth-quarter revenue totaled $3.6 billion, driving a 0.6% year-over-year increase in unit revenue per available seat mile (RASM) despite a brief government shutdown in November. Cargo revenue surged 22%, loyalty revenue rose 12%, and premium product revenue climbed 7% versus Q4 2024.
2. Cost Control and Operating Margins
Unit costs excluding fuel, freighter costs, and special items (CASMex) increased 1.3% year-over-year, outperforming the prior guided range. Economic fuel expense averaged $2.57 per gallon in Q4, reflecting West Coast refining pressures. The GAAP pretax margin was 0.8%, while the adjusted pretax margin reached 1.8%, marking a sequential improvement supported by disciplined cost management and synergy capture following the integration of Hawaiian Airlines.
3. Integration Milestones and Network Expansion
During the quarter, Alaska and Hawaiian Airlines achieved a single operating certificate, unifying operations under one FAA-approved entity. The company began ticket sales for new international routes from Seattle to London and Rome, with inaugural flights scheduled for spring 2026. Credit card acquisitions hit a record, with nearly 25% of new sign-ups opting for the new premium card introduced in late Q3. The airline also launched six foreign-currency websites, targeting increased point-of-sale outside the United States.
4. Full Year 2025 Results and 2026 Guidance
For full-year 2025, GAAP net income was $100 million, or $0.83 per share, down from $395 million, or $3.08, in 2024. Adjusted net income totaled $293 million, or $2.44 per share, compared to $625 million, or $4.87, a year earlier. Operating cash flow reached $1.2 billion. The airline repurchased 11.3 million shares for $570 million. Looking ahead to 2026, management expects capacity growth of 2% to 3% and full-year adjusted earnings per share in the range of $3.50 to $6.50, contingent on macroeconomic trends and fuel price stability.