Alaska Air Group turns its first profit since 2019 unaided by pandemic grants

SEATTLE — Alaska Air Group, parent company of Alaska Airlines and regional carrier Horizon Air, made a third-quarter profit of $194 million, or $1.53 per share, its first profit unsupported by government grants since the end of 2019 and the onset of the COVID-19 pandemic.

A year ago in the same quarter Alaska reported a deep net loss of $431 million, or $3.49 per share.

“We are thrilled to return to profitability this quarter, leading the industry with a 12% pretax profit margin,” CEO Ben Minicucci in a statement Thursday.

Before the pandemic, in the third quarter of 2019, Alaska made a profit of $322 million, or $2.60 per share.

Alaska recorded a profit in the second quarter this year, but only because it received $664 million in government grants and loans through the Payroll Support Program (PSP). Without that, and other one-time items, it would have lost $38 million.

Unlike the other major U.S. airlines, Alaska received no further PSP support during the third quarter. Excluding the benefit of that government support, only Delta managed a third-quarter profit.

Excluding $1.3 billion in government support, Delta reported a net profit of $216 million, a 2.6% pre-tax profit margin.

In contrast, excluding government support and one-time adjustments in the third quarter, Southwest reported a net loss of $135 million, American Airlines a net loss of $641 million, and United a net loss of $349 million.

Alaska’s return to profit from operations came despite a moderate decline in bookings in August and September as COVID case counts rose around the country.

Minicucci called the financial results a “strong foundation for growth in 2022 and beyond.”

Data released Thursday shows Alaska carried 9.8 million passengers in the quarter, compared to 3.6 million in the same period last year and 12.6 million in pre-pandemic 2019.

Most employees have returned from extended leave, so that the airline group now has more than 20,000 working employees, compared to 16,000 a year ago.

Total third-quarter revenue was $2 billion — still down from $2.4 billion in the same quarter of 2019.

Since the trough in business last year, Alaska has been adding planes back into its fleet. Yet the third-quarter fleet capacity, measured as 11.6 million available seat miles, remains significantly lower than the 2019 figure of 17.5 million. (Available seat miles, the standard industry measure of an airline’s fleet size, is the number of seats available multiplied by the number of miles flown.)

The promising financial results are likely to increase calls from the pilots’ union for the company to make concessions and agree to a new labor contract.

Unrest among the pilots has been building as talks with the company failed, and management this month kicked the contract negotiations out to the National Mediation Board.