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Alaska Air Group reported strong profits tied to premium cabin growth, while simultaneously flagging a financial hit from a recent IT outage that halted fleet operations for several hours.
Premium Success Amid Strong Q2 Results
- For Q2 2025, Alaska delivered adjusted earnings per share of $1.78, exceeding its earlier guidance of $1.15โ$1.65 and Wall Street expectations. Premium cabin revenues rose approximately 5% year-over-year, while cargo posting surged by 34%, showcasing its increasing revenue diversification. Loyalty program cash tar contributions also climbed about 5%.
- The airline is scaling its strategic transformation via the Alaska Accelerate plan, targeting over $1 billion in incremental profit by 2027, powered by Hawaiian Airlines synergies, international expansion, and enhanced premium offerings. It aims to grow premium seat capacity from 26% to 29%.
- The carrier has reinstated its full-year 2025 EPS forecast at over $3.25, though slightly below the $3.41 consensus. Q3 guidance stands at $1.00โ$1.40 per share, incorporating a 10-cent drag due to the IT outage.
IT Outage Disrupts Flights, To Subtract From Earnings
- On July 20, Alaska Airlines and its subsidiary Horizon Air issued a system-wide ground stop, halting all flights for approximately three hours due to a third-party hardware failure at its data centersโnot tied to cybersecurity threats. Flights resumed around 11โฏpm Pacific time.
- The fallout included over 150 flight cancellations, with 7% (66 flights) canceled and 12% (110 flights) delayed as of Monday morning. Cancellations extended into the next day as flights and crews were repositioned.
- Passenger impact: ~15,600 travelers affected; hotel stays, meal vouchers, flexibility for rebookingโeven on other airlinesโare being offered for travel through July 28.
- Alaska estimates a modest low-eight-figure EBIT dragโincluding possible $10โ15โฏmillion in lost revenue, plus crew reposition costs and customer care expenses.
