Alaska Air Group Inc. (ALK) 2024年10-K年度報告「NYSE」.pdf

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1、UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON,DC 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended December 31,2024 ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the

2、 transition period from to Commission File Number 1-8957ALASKA AIR GROUP,INC.Delaware91-1292054(State of Incorporation)(I.R.S.Employer Identification No.)19300 International Boulevard,Seattle,Washington 98188Telephone:(206)392-5040Securities registered pursuant to Section 12(b)of the Act:Title of ea

3、ch classTrading SymbolName of each exchange on which registeredCommon Stock,$0.01 Par ValueALKNew York Stock Exchange Securities registered pursuant to section 12(g)of the Act:NoneIndicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Ye

4、s No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Yes No Indicate by check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of1934 during the pre

5、ceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject tosuch filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submi

6、tted pursuant to Rule405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required tosubmit and post such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-acc

7、elerated filer,a smaller reporting company,or an emerging growth company.See the definitions of“large accelerated filer,”accelerated filer,smaller reporting company,and emerginggrowth company in Rule 12b-2 of the Exchange Act:Large accelerated filer Accelerated filerNon-accelerated filer Smaller rep

8、orting companyEmerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition period for complying withany new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by che

9、ck mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of itsinternal control over financial reporting under Section 404(b)of the Sarbanes-Oxley Act(15 U.S.C 7262(b)by the registered public accountingfirm that prepared or issued its au

10、dit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrant includedin the filing reflect the correction of an error to previously issued financial statements.Indicate by check mark whether any of those error c

11、orrections are restatements that required a recovery analysis of incentive-based compensationreceived by any of the registrants executive officers during the relevant recovery period pursuant to 240.10D-1(b).2025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/

12、alk-20241231.htm1/1442025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm2/144Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act.):Yes No As of January 31,2025,shares of common stock ou

13、tstanding totaled 123,078,168.The aggregate market value of the shares of common stock ofAlaska Air Group,Inc.held by nonaffiliates on June 30,2024,was approximately$5.1 billion(based on the closing price of$40.40 per share onthe New York Stock Exchange on that date).DOCUMENTS INCORPORATED BY REFERE

14、NCEPortions of the Definitive Proxy Statement for the Companys 2025 Annual Meeting of Shareholders are incorporated by reference into Part III ofthis Form 10-K.2025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm3/144ALASKA AIR GROUP,INC.ANNUAL

15、 REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,2024 TABLE OF CONTENTS PART I4ITEM 1.BUSINESS4ITEM 1A.RISK FACTORS22ITEM 1B.UNRESOLVED STAFF COMMENTS32ITEM 1C.CYBERSECURITY32ITEM 2.PROPERTIES33ITEM 3.LEGAL PROCEEDINGS34ITEM 4.MINE SAFETY DISCLOSURES34PART II34ITEM 5.MARKET FOR THE REGISTRANTS CO

16、MMON EQUITY,RELATED STOCKHOLDERMATTERS,AND ISSUER PURCHASES OF EQUITY SECURITIES34ITEM 6.RESERVED36ITEM 7.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS36ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK48ITEM 8.CONSOLIDATED FINANCIAL STATEMENTS

17、AND SUPPLEMENTARY DATA49ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING ANDFINANCIAL DISCLOSURE93ITEM 9A.CONTROLS AND PROCEDURES93ITEM 9B.OTHER INFORMATION97ITEM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS97PART III97ITEM 10.DIRECTORS,EXECUTIVE OFFICERS

18、AND CORPORATE GOVERNANCE97ITEM 11.EXECUTIVE COMPENSATION97ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAND RELATED STOCKHOLDER MATTERS97ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,AND DIRECTORINDEPENDENCE97ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES 97PART IV97

19、ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES97ITEM 16.FORM 10-K SUMMARY102SIGNATURES103 As used in this Form 10-K,the terms“Air Group”,the“Company”,“our”,“we”,and us refer to Alaska Air Group,Inc.and its subsidiaries,unless the context indicates otherwise.Alaska Airlines,Inc.,Hawaiian Holdings

20、,Inc.,and Horizon AirIndustries,Inc.are referred to as“Alaska”,“Hawaiian”,and“Horizon”and together as“our airlines”.CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS In addition to historical information,this Annual Report on Form 10-K contains forward-looking statements within the meaning ofSect

21、ion 27A of the Securities Act of 1933,as amended,Section 21E of the Securities Exchange Act of 1934,as amended,and thePrivate Securities Litigation Reform Act of 1995.Forward-looking statements are those that predict or describe future events ortrends and that do not relate solely to historical matt

22、ers.Forward-looking statements involve risks and uncertainties that couldcause actual results to differ materially from historical experience or the Companys present expectations.2025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm4/14422025/5/

23、19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm5/144You should not place undue reliance on our forward-looking statements because the matters they describe are subject to known andunknown risks,uncertainties and other unpredictable factors,many o

24、f which are beyond our control.Our forward-lookingstatements are based on the information currently available to us and speak only as of the date on which this report was filed withthe SEC.Other than as required by law,we expressly disclaim any obligation to issue any updates or revisions to our for

25、ward-looking statements,even if subsequent events cause our expectations to change regarding the matters discussed in those statements.For a discussion of risks and uncertainties that may cause our forward-looking statements to differ materially,see Item 1A.RiskFactors”within this document.Some of t

26、hese risks include competition;labor costs,relations,and availability;general economicconditions;increases in operating costs,including fuel;uncertainties regarding the ability to successfully integrate the operations ofthe recently completed acquisition of Hawaiian Holdings,Inc.,and the ability to

27、realize anticipated cost savings,synergies,orgrowth from the acquisition;inability to meet cost reduction and other strategic goals;seasonal fluctuations in demand andfinancial results;supply chain risks;events that negatively impact aviation safety and security;and changes in laws and regulationsth

28、at impact our business.Please consider our forward-looking statements in light of those Risk Factors as you read this report.32025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm6/144Table of ContentsPART I ITEM 1.BUSINESSAlaska Air Group is a

29、Delaware corporation incorporated in 1985 that operates three airlines,Alaska Airlines,Hawaiian Airlines,and Horizon Air.Alaska Airlines was organized in 1932 and incorporated in 1937 in the state of Alaska.Hawaiian Airlines wasoriginally incorporated in 1929 in the Territory of Hawaii,and has been

30、a Delaware corporation and wholly-owned subsidiary ofHawaiian Holdings,Inc.since 2005.Horizon Air is a Washington corporation that was incorporated and began service in 1981,andwas acquired by Air Group in 1986.Air Group acquired Virgin America in 2016,then legally merged the entity with Alaska in20

31、18,at which time the airlines operating certificates were also combined.The Company also includes McGee Air Services,anaviation services provider that was established as a wholly-owned subsidiary of Alaska in 2016,and other subsidiaries.Alaska,Hawaiian,and Horizon operate as separate airlines.Alaska

32、 also purchases third-party capacity for regional flying under acapacity purchase agreement(CPA).A summary of each airlines operations is presented below:Alaska-includes scheduled air transportation on Alaskas Boeing 737(B737)aircraft for passengers and cargo from thewestern United States(U.S.)throu

33、ghout North America,Mexico,Costa Rica,Belize,the Bahamas,and Guatemala.Hawaiian-includes scheduled air transportation on Hawaiians Boeing 787-9(B787-9),Boeing 717-200(B717-200),AirbusA330-200(A330-200),Airbus A321neo,and Airbus A330-300F(A330-300F)aircraft for passengers and cargo between theHawaiia

34、n Islands(the Neighbor Island routes),as well as between Hawaii and the continental U.S.,parts of Asia,the SouthPacific,Australia,and New Zealand.Horizon-includes scheduled air transportation on Horizons Embraer 175(E175)aircraft for passengers throughout thewestern region of North America.All capac

35、ity is sold to Alaska under a CPA.Our Company is the fifth largest provider of air transportation in the United States,offering unparalleled guest service,connectivity,and schedules from our hub markets along the West Coast and in Hawaii.With our regional partners,we fly to morethan 140 destinations

36、 throughout North America,Central America,Asia,and across the Pacific.Alaska is a member of theoneworld alliance.With oneworld and other global partners,Alaskas guests have access to more than 900 destinations in 170territories.We have operated in a highly competitive and often challenging industry

37、for more than 90 years.Our airlines toppriority is ensuring the safety of our guests and employees,an area we continually invest in.Our success over many decades isattributable to the prioritization of safety as our number one value,as well as our people,business model,and commitment tosustainable g

38、rowth over the long-term.In 2024,Alaska Air Group acquired Hawaiian Holdings,Inc.Work to integrate the two companies has begun in earnest,and weanticipate reaching a single operating certificate,combining our loyalty programs,moving to a single passenger service system,and pursuing joint collective

39、bargaining agreements for union-represented employees over the next few years.AIR GROUPOur airlines operate different aircraft,which serve different missions,described in more detail below.The majority of our revenueis generated by transporting passengers.We deploy aircraft in ways that we believe w

40、ill best optimize our consolidated revenue andprofitability.The percentage of consolidated revenue by category is presented below:202420232022Passenger revenue91%91%91%Loyalty program other revenue6%6%6%Cargo and other revenue3%3%3%Total100%100%100%42025/5/19 13:45alk-20241231https:/www.sec.gov/Arch

41、ives/edgar/data/766421/000076642125000009/alk-20241231.htm7/144The percentage of consolidated passenger capacity by principal geographic region(as defined by the U.S.Department ofTransportation)is presented below:202420232022Domestic91%94%94%Latin America7%6%6%Pacific2%Total100%100%100%ALASKA AIRLIN

42、ESAlaska Airlines offers passenger service on B737 aircraft from the western U.S.throughout North America,Mexico,Costa Rica,Belize,the Bahamas,and Guatemala.Alaskas largest concentrations of departures are from our hubs in Anchorage,Seattle,Portland,San Francisco,Los Angeles,and San Diego.Alaska car

43、ried 36 million revenue passengers in 2024,up from 35 million in2023.The percentage of Alaska passenger capacity by region and average stage length is presented below:202420232022West Coast21%21%22%Transcon/midcon46%47%46%Hawaii14%14%14%Alaska11%11%11%Latin America8%7%7%Total100%100%100%Average Stag

44、e Length(miles)1,395 1,387 1,347(a)Category represents flying within West Coast markets.Departures from West Coast markets to other regions are captured in other categories.The percentage of Alaska passenger capacity by principal geographic region(as defined by the U.S.Department of Transportation)i

45、s presented below:202420232022Domestic92%93%93%Latin America8%7%7%Total100%100%100%HAWAIIAN AIRLINESHawaiian Airlines offers passenger service on B787-9,A330-200,A321neo,and B717 aircraft between the Hawaiian Islands,aswell as between Hawaii and the continental U.S.,parts of Asia,the South Pacific,A

46、ustralia,and New Zealand.Hawaiians largestconcentration of departures is from Honolulu.Hawaiian carried 3 million revenue passengers in the post-acquisition period fromSeptember 18,2024 through December 31,2024,and 11 million in the full year of 2024.(a)52025/5/19 13:45alk-20241231https:/www.sec.gov

47、/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm8/144The percentage of Hawaiian passenger capacity by principal geographic region(as defined by the U.S.Department ofTransportation)and average stage length is presented below.Capacity flown by Hawaiian for the post-acquisition period of

48、 2024 isshown below,with capacity for the full year of 2024,2023,and 2022 included for comparative purposes.Post-Acquisition2024Full Year 202420232022Domestic76%75%75%85%Pacific24%25%25%15%Total100%100%100%100%Average Stage Length(miles)1,114 1,087 1,008 1,044(a)Represents Hawaiians capacity coverin

49、g the post-acquisition period from September 18,2024 through December 31,2024.(b)Represents Hawaiians capacity in the full year 2024,including the period prior to acquisition by Air Group on September 18,2024.REGIONAL Regional operations include passenger service on E175 aircraft operated by Horizon

50、 and SkyWest under CPAs with Alaska,primarily in the states of Washington,Oregon,California,Alaska,and Idaho.Regional operations carried approximately 10 millionrevenue passengers in 2024,up from 9 million in 2023.Horizon is the largest regional airline in the Pacific Northwest and carriedapproximat

51、ely 52%of Air Groups Regional passengers.The percentage of Regional passenger capacity by region and average stage length is presented below:202420232022West Coast78%76%75%Pacific Northwest8%10%8%Canada2%2%2%Alaska6%5%3%Transcon/midcon5%7%12%Mexico1%Total100%100%100%Average Stage Length(miles)475 47

52、0 488 CARGO AND OTHER REVENUEThe Company provides freight and mail services(cargo)using both freighter aircraft and the bellies of its passenger aircraft.Theacquisition of Hawaiian in 2024 expanded Air Groups cargo service and the combined network is expected to improve schedulequality and profitabi

53、lity moving forward.Alaska has five dedicated cargo aircraft that operate primarily to and within the state of Alaska.The majority of Alaskas cargoservices is provided to commercial businesses and the United States Postal Service.Cargo service performance obligations are metand revenue is recognized

54、 when the shipment arrives at its final destination,or is transferred to a third-party carrier for delivery.Hawaiian provides cargo services as part of its Air Transportation Services Agreement(ATSA)with A,Inc.(Amazon).Under the ATSA,Hawaiian supplies flight crews,performs maintenance and certain ad

55、ministrative functions,and procures aircraftinsurance.Additionally,Hawaiian receives a fixed monthly fee per aircraft,a per flight hour fee,and a per flight cycle fee for eachflight cycle operated,and is reimbursed for certain operating expenses,including fuel,certain maintenance,and insurancepremiu

56、ms.The ATSA provides for Hawaiian to operate up to ten A330-300F aircraft.As of December 31,2024,Hawaiian hastaken delivery of and is operating six A330-300F aircraft.The Company also earns other revenue for lounge memberships,hotel and car commissions,travel insurance,and certain otherimmaterial it

57、ems not intrinsically tied to providing air travel to passengers.Revenue is recognized when these services are renderedand recorded as Cargo and other revenue.LOYALTY PROGRAMSAlaska and Hawaiian maintain separate loyalty programs,each offering members a comprehensive suite of benefits.Air Groupantic

58、ipates combining the two programs into an integrated program in 2025.Prior to combination of the programs,Air Group(a)(b)2025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm9/14462025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data

59、/766421/000076642125000009/alk-20241231.htm10/144implemented the ability to transfer points between the two programs at a 1:1 ratio for no charge.Additionally,elite members ineither program can have their status matched in the other.Alaska members are also eligible to redeem miles for travel on Hawa

60、iian.A description of each airlines program as of December 31,2024 is included below.In 2024,Air Group loyalty program members redeemed miles and companion certificates for over seven million award tickets onour airlines and partner airlines,inclusive of Hawaiian loyalty program redemptions for the

61、post-acquisition period from September18,2024 through December 31,2024.Loyalty program revenue,including that in the Passenger revenue line item in theconsolidated statements of operations,represented approximately 16%of Air Groups total revenue in 2024.Alaska AirlinesAlaska Airlines Mileage Plan me

62、mbers can earn miles by flying on Alaska.Miles are awarded based on distance,not spend,which serves as a competitive advantage over other airlines programs,as miles accumulate faster.Miles can also be earned byflying with one of Alaskas partner airlines,by using Alaskas co-branded credit card,or thr

63、ough other non-airline partners.Milesawarded do not expire and can accumulate until such time a member chooses to redeem.Members can redeem miles earned forflights on Alaska and partner airlines,hotel stays and vacation rentals,and car rentals.For loyalty program members,the program offers multiple

64、tiers of MVP status,including MVP Gold,MVP Gold 75K,and MVPGold 100K,which can be achieved annually by earning qualifying miles.For those achieving MVP tier status,the program offersbenefits,including bonus miles on flown segments,complimentary upgrades,free checked bags,and priority boarding.Member

65、squalifying for higher tiers are offered incremental benefits.As a member of oneworld,Mileage Plan members with tier status areprovided reciprocal status and benefits when flying on other oneworld members.Alaska has an agreement with Bank of America N.A which offers Mileage Plan members in the U.S.t

66、he Alaska Airlines VisaSignature card(Alaskas co-branded credit card).Cardholders receive miles for spend on the card,as well as an annual companionticket that allows members to purchase an additional ticket for$99 plus taxes,with no restrictions or black-out dates,and a freefirst checked bag for up

67、 to seven people traveling on the same itinerary.Alaskas co-branded credit card agreement provides theCompany a material cash remuneration,and is an important source of value for Mileage Plan members.Alaska Airlines also offers a complimentary loyalty program within Mileage Plan for residents of the

68、 state of Alaska.Club 49offers members two free checked bags,last-minute travel discounts,exclusive weekly fare sales,and discounts on cargo shipmentsto,from or within the state of Alaska.Hawaiian AirlinesHawaiianMiles awards miles based on distance,providing generous earning potential on longer hau

69、l routes between the U.S.mainland and international cities and Hawaii.Miles are also earned by flying with one of Hawaiians partner airlines,by usingHawaiians co-branded credit card,or through other non-airline partners.Miles awarded do not expire and can accumulate untilsuch time a member chooses t

70、o redeem.Members can redeem miles earned for flights on Hawaiian or partner airlines,hotel stays,or for other non-airline partner benefits.Pualani Gold and Platinum status levels recognize the airlines most loyal members with additional benefits,including priorityairport experiences,Premier Club acc

71、ess,seat upgrades,and enhanced baggage allowances.Status can be achieved annually byearning qualifying miles or flying a certain number of segments.Hawaiians agreements with Barclays,Bank of Hawaii,and Mastercard are drivers of program engagement and revenue.TheHawaiianMiles program utilizes the Bar

72、clays World Elite Mastercard and the Bank of Hawaii VISA debit card.These productsallow members to accumulate more miles between their trips on Hawaiian,provide material cash remuneration,and are criticalengagement tools for the airline.Hawaiian Airlines also offers a complimentary loyalty program w

73、ithin HawaiianMiles for residents of the state of Hawaii.Huakaiby Hawaiian offers kamaina(Hawaii residents)members a free checked bag,discounts on Neighbor Island travel,and monthlynetwork-wide discounts.AGREEMENTS WITH OTHER AIRLINES2025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/

74、766421/000076642125000009/alk-20241231.htm11/144Alaska and Hawaiian have various types of marketing agreements with other airlines.These agreements fall into three categories:loyalty program,codeshare,and interline.72025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/00007664212

75、5000009/alk-20241231.htm12/144Loyalty program agreements enable our members to accrue miles and/or redeem them for flights on partner airlines.Codeshare agreements allow one or more marketing carriers to sell seats on a single operating carrier that serves passengersunder multiple flight numbers.The

76、 sale of codeshare seats can vary depending on the sale arrangement.For example,in a free-sale arrangement,the marketing carrier sells the operating carriers inventory without any restriction;whereas in a block-spacearrangement,a fixed amount of seats are sold to the marketing carrier by the operati

77、ng carrier.The interchangeability of theflight code between carriers provides a greater selection of flights for customers,along with increased flexibility for mileageaccrual and redemption.Interline agreements allow airlines to jointly offer a competitive,single-fare itinerary to customers travelin

78、g via multiplecarriers to a final destination.An interline itinerary offered by one airline may not necessarily be offered by the other,and thefares collected from passengers are prorated and distributed to interline partners according to preexisting agreements betweenthe carriers.These agreements h

79、elp increase our traffic and revenue by providing a more diverse network and schedule options to our guests.Alaska is a member of the oneworld alliance.Alaskas elite Mileage Plan members receive tier status matching across othermember airlines.Depending on tier status,guests can enjoy a variety of p

80、rivileges,including access to more than 600 internationalfirst and business class lounges,fast track through security,priority baggage benefits,priority check-in desks,upgrades,andpriority boarding.Alliances are an important part of our strategy and enhance our revenue by:offering our guests more tr

81、avel destinations and better mileage credit and redemption opportunities,including elite qualifyingmiles on U.S.and international airline partners;providing a consistent and seamless guest experience whether flying on Alaska or one of our partners;giving us access to more connecting traffic from oth

82、er airlines;and providing members of our partners loyalty programs an opportunity to travel on Alaska and our regional partners whileearning mileage credit in our partners programs.Most of our codeshare relationships are free-sale codeshares,where the marketing carrier sells seats on the operating c

83、arriersflights from the operating carriers inventory,but takes no inventory risk.Our marketing agreements have various terminationdates,and one or more may be in the process of renegotiation at any time.Our codeshare and interline agreements generated 5%ofour total operating revenue for each of the

84、years ended December 31,2024,2023,and 2022.82025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm13/144Alaskas marketing agreements with other airlines are as follows:Codeshare AirlineMileage PlanLoyalty ProgramAgreementAlaska Flight#onFlights O

85、perated byOther AirlineOther Airline Flight#on Flights Operated byAlaska or CPA PartnersAer LingusYesNoNoAir Tahiti NuiYesYesYesAleutian AirwaysYesNoNoAmerican AirlinesYesYesYesBahamasairYesNoNoBritish AirwaysYesYesYesCape AirYesNoNoCathay Pacific AirwaysYesNoYesCondor AirlinesYesYesYesContour Airli

86、nesYesNoNoFiji AirwaysYesNoYesFinnairYesYesYesHainan AirlinesYesNoNoIberiaYesYesYesIcelandairYesYesYesJapan AirlinesYesYesYesKenmore AirYesNoNoKorean AirYesNoYesLATAMYesNoYesMalaysia AirlinesYesNoNoMokulele AirlinesYesNoNoOman AirYesNoNoPorter AirlinesYesNoNoQantas AirwaysYesYesYesQatar AirwaysYesYe

87、sYesRoyal Air MarocYesNoNoRoyal JordanianYesNoNoSingapore AirlinesYesNoYesSouthern Airways ExpressYesNoNoSriLankan AirlinesYesNoNoSTARLUX AirlinesYesNoNo(a)These airlines do not have their own loyalty program.However,Alaskas Mileage Plan members can earn and redeem miles on these airlinesroute syste

88、ms.(b)These airline partnerships are limited to earning miles.Alaskas Mileage Plan members can earn miles when purchasing these airlines flightson .(b)(b)(b)(a)(b)(a)(b)(b)(b)92025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm14/144Hawaiians

89、marketing agreements with other airlines are as follows:Codeshare AirlineHawaiianMilesLoyalty ProgramAgreementHawaiian Flight#onFlights Operated byOther AirlineOther Airline Flight#on Flights Operated byHawaiianAmerican AirlinesNoNoYesChina AirlinesYesYesYesDelta Air LinesNoNoYesJapan AirlinesYesYes

90、YesJetBlueYesYesYesKorean AirYesYesYesPhilippine AirlinesNoNoYesTurkish AirlinesNoNoYesUnited AirlinesNoNoYesVirgin Atlantic AirwaysYesNoNoVirgin AustraliaYesYesNoGENERALThe airline industry is highly competitive and subject to potentially volatile business cycles,resulting from factors such asuncer

91、tain economic conditions,volatile fuel prices,supply chain dependencies,pandemics,a largely unionized work force,theneed to finance large capital expenditures and the related availability of capital,government regulation-including taxes and fees,and potential aircraft incidents.Airlines have high fi

92、xed costs,primarily for wages,aircraft fuel,aircraft ownership,and facilitiesrents.Because expenses of a flight do not vary significantly based on the number of passengers carried,a relatively small change inthe number of passengers or in pricing has a disproportionate effect on an airlines operatin

93、g and financial results.In other words,aminor shortfall in expected revenue levels could cause a disproportionately negative impact to our operating and financial results.Passenger demand and ticket prices are,in large measure,influenced by the general state of the economy,current global economicand

94、 political events,and total available airline seat capacity.SAFETYThe safety and well-being of our employees and guests is the foundation of our work at Alaska Air Group.The Companys primarysafety objective is to identify,monitor,and mitigate safety risks,which we do using our airlines Safety Manage

95、ment Systems(SMS).Our safety principles and safety initiatives are critical to empowering employees to pause the operation any time somethingappears to be unsafe.Safety goals and objectives are regularly reviewed and communicated to employees,and are continuallymeasured to evaluate our progress.Alas

96、ka and Horizon employees are also rewarded for reporting safety concerns and meetingmeasurable safety targets as both our Performance Based Pay(PBP)and Operational Performance Rewards(OPR)programsinclude payouts for achievement to stated goals.As of December 31,2024,Alaska and Horizon operate under

97、one SMS and Hawaiian operates under its own SMS.Air Group hasstarted the process of integrating the two systems as it works towards combining Alaska and Hawaiian under a single operatingcertificate.Air Groups Board of Directors has a Safety Committee that is responsible for oversight of safety-relat

98、ed risk and managementsefforts to ensure the safety of all passengers and employees.The Committee receives regular updates from management throughoutthe year and provides feedback to create and maintain a strong safety culture.FUELOur business and financial results are highly impacted by the price a

99、nd the availability of aircraft fuel.Aircraft fuel expenseincludes raw fuel expense,or the price that we generally pay at the airport,including taxes and fees,plus the impact of our fuelhedge program,including the effect of mark-to-market adjustments to our portfolio as the value of that portfolio i

100、ncreases anddecreases.In addition,management reviews economic fuel costs,which include the impact of settled fuel hedge positions butexcludes mark-to-market adjustments.Management considers economic fuel costs to be the best estimate of the cash cost of fuel.The cost of aircraft fuel is volatile and

101、 outside of our control,and can have a significant and immediate impact on our operatingresults.2025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm15/144102025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000

102、009/alk-20241231.htm16/144Fuel prices are impacted by changes in both the price of crude oil and refining costs,and can vary by geography.Alaska purchasesits fuel primarily based on U.S.West Coast jet fuel prices,while Hawaiian purchases its fuel primarily based on Singapore jet fuelprices.The table

103、 below presents economic fuel cost per gallon for Alaska and Hawaiian.Post-Acquisition2024Full Year 202420232022Alaskan/a$2.74$3.18$3.40 Hawaiian$2.43$2.58$2.89$3.42(a)For Hawaiian,represents costs in the full year 2024,including the period prior to acquisition by Air Group on September 18,2024.The

104、cost composition of our aircraft fuel expense,inclusive of Hawaiian for the post-acquisition period from September 18,2024through December 31,2024,is as follows:202420232022Crude oil67%58%64%Refining margins22%33%35%Other11%9%1%Total100%100%100%Aircraft fuel,including hedging gains and losses(in mil

105、lions)$2,506$2,641$2,668 Percentage of Total Operating Expenses22%26%28%Fuel gallons(000,000)925 824 758(a)Other includes gains and losses on settled fuel hedges,unrealized mark-to-market fuel hedge gains and losses,taxes,and other into-planecosts.Alaska and Hawaiian each have a fuel hedge program,b

106、oth of which use crude oil call options to limit exposure to materialincreases in fuel prices.The call options lessen the financial impact from spikes in crude oil prices,and when prices are below thecall option strike prices,we only forfeit cash previously paid for hedge premiums.Alaskas program wa

107、s suspended in 2023,andhas open positions based in West Texas Intermediate(WTI)crude oil that will settle through the first quarter of 2025.Hawaiiansprogram was temporarily paused as of September 30,2024,and has open positions based in Brent crude oil,that will settle throughthe third quarter of 202

108、5.Sustainable aviation fuel(SAF)is an important part of our long-term strategy to reduce emissions.In 2024,Alaska used limitedquantities of SAF on flights departing from San Francisco International Airport and Los Angeles International Airport.SAF pricesare generally higher than jet fuel prices as t

109、he SAF market is still developing.The demand for SAF within the aviation industrysignificantly exceeds the current available supply.We are evaluating options for obtaining the volume of SAF that we expect willbe necessary to move us toward our long-term carbon-emission goals.These options include pa

110、rtnerships with alternative fuelcompanies and industry groups focused on ways to accelerate innovation in this area.We believe that operating fuel-efficient aircraft and executing on operational best practices are the best strategies to mitigate highfuel prices.Maintaining a young,fuel-efficient fle

111、et helps reduce our fuel consumption rate,as well as the amount of greenhousegases and other pollutants that our aircraft emit.COMPETITIONCompetition in the airline industry can be intense and unpredictable.Our competitors consist primarily of other airlines and,to alesser extent,other forms of tran

112、sportation.Competition can be direct,in the form of another carrier flying the exact non-stoproute,or indirect,where a carrier serves the same two cities non-stop from an alternative airport in that city or via an itineraryrequiring a connection at another airport.Our airlines compete with other U.S

113、.and foreign airlines on nearly all of our domesticand international routes.Our largest competitor is Delta Air Lines Inc.(Delta).Approximately 79%of our capacity to and fromSeattle competes with Delta.In addition to Delta,Southwest Airlines and United Airlines are significant competitors in the sta

114、te ofHawaii and on the West Coast.Our Hawaii,California,transcontinental,and international routes have a higher concentration ofcompetitors when compared to our routes within the Pacific Northwest.We believe that the following competitive factors matter to guests when making an air travel purchase d

115、ecision:(a)(a)2025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm17/144112025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm18/144Fares and ancillary servicesTicket and other fee pricing

116、 is a significant competitive factor in the airline industry.Travelers are able to easily compare faresand identify competitor promotions and discounts.Pricing is driven by a variety of factors including,but not limited to,market-specific capacity,market share per route/geographic area,cost structur

117、e,fare vs.ancillary revenue strategies,anddemand.Airlines often discount fares to drive traffic in new markets or to stimulate traffic when necessary to improve load factors.Historically,markets that faced competition from low-cost and ultra-low-cost carriers were subject to disruptive ticket and fe

118、epricing as the carriers low cost per available seat mile allowed them to serve markets at very low fares.Legacy carriers withexpansive networks and diversified product offerings have experienced greater success attracting more price-consciouscustomers with their basic economy offerings.These factor

119、s can reduce our pricing power and that of the airline industry as awhole.Domestic airline capacity is dominated by four large carriers,representing 78%of total seats.Given the large concentration ofindustry capacity,some carriers in our markets may discount their fares substantially to develop or i

120、ncrease market share.Fares that are substantially below our cost to operate can be harmful if sustained over a long period of time.We will defendour position in our core markets and,if necessary,adjust capacity to better match supply with demand.Our cost discipline andhigh productivity have historic

121、ally enabled us to maintain competitive fares.Routes served,flight schedules,codesharing and interline agreements,and alliancesWe compete with other airlines based on markets served and the frequency of service to those markets.Some airlines havemore extensive route structures than we do,and they of

122、fer significantly more international routes.In order to expandopportunities for our guests,we enter into codeshare and interline agreements with other airlines.These agreements allow us tooffer our guests access to more destinations than we can on our own and to gain exposure in markets we do not se

123、rve.Theagreements also make it more convenient for guests to purchase flights to their final destinations through our airlinesdistribution channels.Alaskas membership in the oneworld alliance provides its guests increased global network utility,and positions the airline tocapture an incremental shar

124、e of global travelers and corporate accounts.Through oneworld,guests can travel to more than 900destinations in 170 territories.Loyalty programsWe compete with other airlines for customer loyalty in order to build long-term relationships with our guests.Our MileagePlan and HawaiianMiles programs off

125、er some of the most valuable benefits in the industry,giving our members the ability toearn and redeem miles when flying with us or our partner carriers.Awarding miles for flights based on distance traveled servesas a competitive advantage when compared to other airlines that award miles based on fa

126、res,as customers can accumulatemiles faster.The programs have multiple tiers of status that offer a variety of benefits including bonus miles,complimentaryupgrades,free checked bags,and priority boarding.Our loyalty programs also offer exclusive benefits to residents in the statesof Alaska and Hawai

127、i through our Club 49 and Huakai programs,which show our gratitude for major communities we serve.Members of our loyalty programs also have access to co-branded credit cards as an additional way to accumulate miles andtake advantage of additional benefits.Additionally,Alaskas Mileage Plan gives gues

128、ts the ability to enjoy privileges on otheroneworld airlines by granting reciprocal status and benefits,which include upgrades,lounge access,and priority boarding.Product and customer serviceWe compete with other airlines in areas of customer service such as on-time performance and guest amenities-i

129、ncluding firstclass and other premium seating,quality of on-board products,aircraft type and comfort.We have increased the number ofpremium seats on Alaska and Horizon aircraft,and intend to make significant investments in cabin retrofits and increasedpremium seat mix in coming years.The acquisition

130、 of Hawaiian introduced lie-flat seats to the Air Group fleet,providingguests the option for added comfort on long haul flights.The Company is also in the process of implementing improvements toour airport facilities that provide an enhanced guest experience,including lobby updates and lounge expans

131、ions.Our employees are a critical element of our reputation.We have a highly engaged workforce that strives to provide genuineand caring service to our guests,both at the airport and onboard.We heavily emphasize our service standards with our2025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edg

132、ar/data/766421/000076642125000009/alk-20241231.htm19/144122025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm20/144employees through training and education programs,and monetary incentives related to operational performance and guestsatisfacti

133、on.Besides competing with other airlines,we compete with ground transportation in our short-haul markets.Our airlines also competewith technology,such as video conferencing and internet-based meeting tools.We expect that the advancement and increasedutilization of these tools will eliminate the need

134、 for some business-related travel.TICKET DISTRIBUTION Our tickets are distributed through multiple channels:Direct to customer:Alaska sells direct at and through the Alaska Airlines app.Hawaiian sells direct and through the Hawaiian Airlines app.Selling direct is our most cost efficient sales channe

135、l.Wealso believe direct sales are preferable from a branding and customer relationship standpoint because we can establish ongoingcommunication with the guest and tailor offers accordingly.As a result,we prioritize efforts that drive more business to ourwebsites.We also have reservation call centers

136、 where guests can book reservations.As of December 31,2024,Alaska and Hawaiian sell tickets through separate Passenger Service Systems(PSS).The airlinesare expected to transition to a single PSS in 2026.Traditional and online travel agencies:Alaska and Hawaiian use travel agencies to sell to guests.

137、Both traditional and onlinetravel agencies typically use Global Distribution Systems to obtain their fare and inventory data from airlines.Bookings madethrough these agencies result in a fee that is charged to our airlines.Many large corporate customers require use of theseagencies.Some of our compe

138、titors rely on this distribution channel to a lesser extent than we do,and,as a result,may havelower ticket distribution costs.In 2024,73%of our total sales were conducted direct to customer with the remaining 27%through traditional and online travelagencies.SEASONALITY AND OTHER FACTORSOur results

139、of operations for any interim period are not necessarily indicative of those for the entire year because our business issubject to seasonal fluctuations.In typical years,our profitability is generally lowest during the first and fourth quarters dueprincipally to fewer departures and passengers.Profi

140、tability typically increases in the second and third quarters as a result ofvacation travel.Some of the negative impacts of seasonality are offset by travel from the West Coast to leisure destinations andexpansion to leisure and business destinations in the mid-continental and eastern U.S.Seasonalit

141、y and operating fluctuations mayhave a significant impact on operating results in an interim or annual period,and are not necessarily indicative of future operatingresults.In a typical year,in addition to passenger loads,factors that could cause our operating results to vary include:pricing initiati

142、ves by us or our competitors;changes in fuel costs;increases in competition at our primary airports;general economic conditions,in both the U.S.and other countries,and resulting changes in both leisure and business passengerdemand;increases or decreases in passenger and volume-driven variable costs;

143、andair space and Air Traffic Control delays,particularly in Seattle and San Francisco.Many of the markets we serve experience inclement weather conditions in the winter,causing increased costs associated withdeicing aircraft,flight cancellations,and accommodating displaced passengers.In certain geog

144、raphies such as the PacificNorthwest,Alaska and Hawaii,we may be more susceptible to adverse weather conditions than some of our competitors who havedifferent network exposures.2025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm21/144132025/5/

145、19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm22/144No material part of Alaska Air Groups or its subsidiaries business is dependent upon a single customer,or upon a few high-volumecustomers.ENVIRONMENTAL INITIATIVESWe have both short and long-te

146、rm goals to reduce fuel consumption,with the long-term aim to reach net zero carbon emissions by2040.Our roadmap for achieving this goal includes the following focus areas:Increasing operational efficiency:We take pride in consistently delivering top-of-industry operational performance.Byhaving a co

147、nsistent,top-of-industry operational performance,we are also able to optimize our fuel efficiency.Alaska andHorizon use Flyways AI,a technology which leverages artificial intelligence to enable more fuel-efficient flight paths.Other initiatives include reducing auxiliary power unit usage and connect

148、ing to ground power,taxiing with just one enginewhere conditions allow,and implementing a new engine wash program.Reducing emissions from our ground service equipment through the acquisition and use of electrified and other lower-emissions equipment is another aspect of improving operational efficie

149、ncy.Currently,not all airports have the necessaryinfrastructure in place to support charging and use of these units to enable their full operational reliability,and we areactively working with our airport partners to make these improvements.Renewing our fleet with more efficient airplanes:Alaska and

150、 Hawaiian have purchase commitments for B737 and B787-9 aircraft.Due to their designs,up-gauged capacity,and engines,the new aircraft are between 20%to 25%more efficienton a seat-by-seat basis than the aircraft they replace.Using SAF:Among available technologies,SAF has the greatest potential for en

151、abling near-term progress towards our netzero emissions goal,as it can be used alongside traditional jet fuel as a drop-in fuel while producing up to 80%lowercarbon emissions on a lifecycle basis.Currently,there are supply constraints in the SAF market,including scope,scale,and cost,which we are dep

152、endent on in order to expand our use of SAF at the quantities necessary to reach our net zerocarbon emissions ambition.We are working with others in the aviation community,companies in the private sector,andgovernments at the federal and state levels towards advancing the scalability of SAF producti

153、on and reducing its cost.We currently offtake SAF from Neste at San Francisco International Airport and from Shell Aviation at Los AngelesInternational Airport.Alaska and Hawaiian have additional agreements to purchase SAF to be delivered in the comingyears.Alaskas Fueled Up for the Future program e

154、nables collaboration with business travel customers to address theirbusiness travel emissions while supporting the development of the SAF market.In addition to corporate customerspurchasing Scope 3 SAF credits to support the cost of these fuels,Alaska offers an opportunity within the booking path fo

155、rindividual guests to understand their travel-related emissions and to support SAF.Investing in new technologies:Our net zero ambitions require technologies not yet fully developed or available at thescale required to decarbonize our industry.In these areas,we are focused on doing our part to aid in

156、 their development andgrowth as well as galvanizing support from both public and private sectors through public policy and capital investment.To enable these technologies and accelerate our path to net zero carbon emissions,among other business needs,weestablished an investment arm in 2021,called Al

157、aska Star Ventures(ASV).Through ASV,we have partnered withcompanies focused on new aircraft technologies.These include ZeroAvia,a company developing hydrogen-electricpowertrain technology for regional aircraft,and JetZero,a company developing a blended wing body using existingengine technology while

158、 delivering up to 50%better fuel efficiency.ASV has also invested in Twelve,a power-to-liquidSAF provider utilizing recaptured carbon dioxide as feedstock to bring its E-Jet,a low carbon jet fuel produced fromrecaptured carbon dioxide,water,and renewable energy,into commercial use.Harnessing credibl

159、e carbon offset and carbon removal technologies:While our preference is for in-sector carbonreductions,the timeline for development and maturation of SAF markets and emerging aircraft technologies is difficult topredict,and we expect it is likely that both nature-based and engineered carbon removals

160、 will play some role in meetingour net zero ambition.We have partnered with industry experts to develop criteria for assessing credible,high-qualitycarbon offsets and carbon removal technologies.The Company does not have material investments in any carbon offsetsor carbon removal technology.We will

161、continue to evaluate various strategies,including these technologies,as we refineour plans to achieving net zero.Since 2020,we have included a fuel efficiency metric in our Performance-Based Pay program for Alaska and Horizon employees,as we believe it is important to embed these critical targets in

162、to the incentives that align all of our employees.2025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm23/144142025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm24/144CORPORATE RESPONSIBI

163、LITY GOVERNANCEThe Governance,Nominating,and Corporate Responsibility Committee of the Board of Directors regularly reviews performanceon publicly reported fuel efficiency goals and climate-related issues.The Board has a dedicated Climate Working Group to overseemanagements climate strategy and path

164、 to net zero.This working group comprises three members from the board who bring deepexpertise in energy,aviation,finance,and governance.The Audit Committee of the Board of Directors oversees Air Groupsfinancial reporting process,including disclosures on corporate responsibility matters within the C

165、ompanys financial statements.The Companys Executive Committee is responsible for overseeing the progress toward our climate goals and providing input onAir Groups climate strategy.HUMAN CAPITALOUR PEOPLEOur business is labor intensive.As of December 31,2024,we employed 33,941 active employees(20,269

166、 at Alaska,7,362 atHawaiian,3,400 at Horizon,and 2,910 at McGee Air Services).Of those employees,89%are full-time and 11%are part-time.Wages and benefits,including variable incentive pay,represented approximately 46%of our total non-fuel operating expenses in2024 and 44%in 2023.In 2024,we hired over

167、 2,800 employees to support our growth and operations.Aligning our employees goals with the Companysgoals is critical in achieving success.During the year,Alaska and Horizon employees participated in the PBP and OPR programs,which reward employees across all work groups based on metrics related to p

168、rofitability,safety,sustainability,guest satisfaction,completion rate,and on-time rate.Hawaiian employees also participate in a profit sharing and bonus program,which rewardsemployees based on metrics related to profitability,unit costs,guest satisfaction,employee sentiment,and operational performan

169、ce.Alaska and Horizon employees earned$325 million under these incentive programs during the year.COLLECTIVE BARGAININGMost major airlines,including Alaska,Hawaiian,and Horizon,have employee groups that are covered by collective bargainingagreements(CBA).Airlines with unionized workforces generally

170、have higher labor costs than carriers without unionizedworkforces.Those with unionized workforces may not have the ability to adjust labor costs downward quickly in response to newcompetition or slowing demand.At December 31,2024,labor unions represented 85%of Alaskas,82%of Hawaiians,42%ofHorizons,a

171、nd 87%of McGee Air Services employees.Alaska and Hawaiian are working towards joint collective bargaining agreements(JCBA)for workgroups represented by the sameunions.At December 31,2024,Transition and Process Agreements are in place for certain workgroups,which define the processfor negotiating JCB

172、As and set forth interim agreements until a JCBA is reached.Our relations with U.S.labor organizations representing Alaska,Hawaiian,and Horizon employees are governed by the RailwayLabor Act(RLA).Under the RLA,collective bargaining agreements do not expire,but instead become amendable as of a stated

173、date.If either party wishes to modify the terms of any such agreement,it must notify the other party in the manner prescribed bythe RLA and/or described in the agreement.After receipt of such notice,the parties must meet for direct negotiations,and if noagreement is reached,either party may request

174、the National Mediation Board to initiate a process including mediation,arbitration,and a potential“cooling off”period that must be followed before either party may engage in self-help.Certain employees locatedoutside the U.S.are also represented by unions or local representative groups.152025/5/19 1

175、3:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm25/144Alaskas union contracts at December 31,2024 were as follows:UnionEmployee GroupNumber ofEmployeesContract StatusAir Line Pilots Association,International(ALPA)Pilots3,401 Amendable 3/2/2027Associat

176、ion of Flight Attendants(AFA)Flight attendants6,927 Amendable 12/17/2022International Association ofMachinists and Aerospace Workers(IAM)Ramp service and stockclerks854 Amendable 9/27/2026IAMClerical,office andpassenger service4,691 Amendable 9/27/2026Aircraft Mechanics Fraternal Association(AMFA)Te

177、chnicians and related1,060 Amendable 10/17/2028Transport Workers Union of America(TWU)Dispatchers113 Amendable 3/24/2027(a)In January 2025,Alaska reached a tentative agreement with its flight attendants,represented by the AFA,for an updated collective bargainingagreement.Voting on the tentative agre

178、ement will be completed in the first quarter of 2025.Hawaiians union contracts at December 31,2024 were as follows:UnionEmployee GroupNumber ofEmployeesContract StatusALPAPilots1,155 Amendable 3/2/2027AFAFlight attendants2,181 Amendable 4/2/2025IAMTechnicians and related910 Amendable 2/15/2027IAMCle

179、rical1,723 Amendable 2/15/2027TWUDispatchers69 Amendable 4/21/2027Horizons union contracts at December 31,2024 were as follows:UnionEmployee GroupNumber ofEmployeesContract StatusInternational Brotherhood of Teamsters(IBT)Pilots642 Amendable 12/31/2024AFAFlight attendants561 Amendable 4/30/2024AMFAM

180、echanics and relatedclassifications174 Amendable 5/10/2024TWUDispatchers22 Amendable 1/29/2026(a)Negotiations with IBT,AFA,and AMFA for updated collective bargaining agreements are ongoing as of the date of this filing.McGee Air Services union contract at December 31,2024 was as follows:UnionEmploye

181、e GroupNumber ofEmployeesContract StatusIAMFleet and ramp service2,543 Amendable 7/19/2025CARE AND BELONGINGWe remain steadfast in our commitment to recruit,retain,and promote the best talent.This is part of our commitment to Do theRight Thing by our guests,employees,and communities,and to create a

182、culture in which employees can do their best work,andbest serve the breadth of our customer base.We believe that all who depend on Alaska Air Group deserve respect regardless ofrace,ethnicity,ability,age,gender,sexual orientation,or gender identity.We are committed to treating every person equally o

183、nand off our aircraft.We will continue to foster a workplace where our employees feel safe,cared for,and trust that they belong.(a)(a)(a)(a)162025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm26/144EMPLOYEE TRAININGThe Alaska Air Group compan

184、ies invest in employee programs and training that aid advancement throughout the enterprise.OurPathways Program provides a clear and direct path for Horizon pilots,flight attendants,technicians,and dispatchers to progress toAlaska.Our Leader Academy,which launched in 2022,helps supervisors and manag

185、ers further develop their leadership andcommunication skills.Providing meaningful advancement opportunities to employees throughout Air Group is important,and wecontinue to evaluate new programs which support our people and advance our long-term strategic goals.COMMUNITY INVOLVEMENTWe are dedicated

186、to actively supporting the communities we serve.In 2024,Air Group companies donated$15 million in cash andin-kind travel to approximately 1,300 charitable organizations,and our employees volunteered more than 45,000 hours ofcommunity service related to youth and education,medical research,and transp

187、ortation.Air Group also encourages its guests toplay a role in supporting these communities.During the year,Alaska Mileage Plan members donated more than 50 million milesthrough Alaskas Care Miles program.The Alaska Airlines Foundation provides grants to nonprofits that offer educational and career-

188、development programs to youngpeople.Organizations are invited to apply bi-annually for grants ranging from$5,000 to$20,000,with preference given toorganizations that can demonstrate partnership and long-term program sustainability.Since inception in 1999,the Foundation hasdonated more than$4 million

189、 in grants,including more than$500,000 in 2024.Hawaiian supports various nonprofit partners and relief efforts by facilitating travel,carrying critical cargo,and making both cashand mileage donations.Hawaiian also seeks to broaden opportunities for students to consider Hawaiian as an employer by for

190、mingeducational partnerships with schools,establishing scholarship programs,and hosting Aviation Exposure onsite events with theDepartment of Education.172025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm27/144EXECUTIVE OFFICERS The executive

191、 officers of Alaska Air Group,Inc.and its airline subsidiaries who have significant decision-making responsibilities,their positions,and their respective ages are as follows:NamePositionAgeAir Groupor SubsidiaryOfficer SinceBenito MinicucciPresident and Chief Executive Officer of Alaska Air Group,In

192、c.and AlaskaAirlines,Inc.582004Shane R.TackettExecutive Vice President Finance and Chief Financial Officer of Alaska AirGroup,Inc.and Alaska Airlines,Inc.462011Kyle B.LevineSenior Vice President Legal,General Counsel and Corporate Secretary ofAlaska Air Group,Inc.,Alaska Airlines,Inc.and Horizon Air

193、 Industries,Inc.,and Chief Ethics and Compliance Officer of Alaska Air Group,Inc.532016Jason M.BerryExecutive Vice President Cargo of Alaska Air Group,Inc.and President ofHorizon Air Industries,Inc.472023Joseph A.SpraguePresident and Chief Executive Officer of Hawaiian Airlines,Inc.and HawaiianHoldi

194、ngs,Inc.and Executive Vice President Hawaii Pacific of Alaska Airlines,Inc.562019Andrew R.HarrisonExecutive Vice President and Chief Commercial Officer of Alaska Airlines,Inc.552008Constance E.vonMuehlenExecutive Vice President and Chief Operating Officer of Alaska Airlines,Inc.572018Andrea L.Schnei

195、derSenior Vice President People of Alaska Airlines,Inc.592003Diana Birkett RakowSenior Vice President Public Affairs and Sustainability of Alaska Airlines,Inc.472017 Mr.Minicucci was elected President and Chief Executive Officer(CEO)of Alaska Air Group,Inc.in March 2021 and President ofAlaska Airlin

196、es,Inc.in May 2016.He leads Air Groups Management Executive Committee,and was elected to the Alaska AirGroup,Inc.Board of Directors in May 2020.He joined Alaska Airlines,Inc.in May 2004 and has served in several roles includingExecutive Vice President Operations from December 2008 to May 2016 and Ch

197、ief Operating Officer from December 2008 toNovember 2019.He was Chief Executive Officer of Virgin America,Inc.from December 2016 to July 2018,when Virgin America,Inc.was merged into Alaska Airlines,Inc.Mr.Tackett was elected Executive Vice President Finance and Chief Financial Officer of Alaska Air

198、Group,Inc.and AlaskaAirlines,Inc.in March 2020,and is a member of Air Groups Management Executive Committee.He joined Alaska Airlines,Inc.in December 2000 and has served in several roles including Managing Director Financial Planning and Analysis from December2008 to August 2011,Vice President Labor

199、 Relations from August 2011 to February 2015,Vice President Revenue Managementfrom February 2015 to August 2017,Senior Vice President Revenue and E-commerce from August 2017 to September 2018,andExecutive Vice President Planning and Strategy from September 2018 to March 2020.Mr.Levine was elected Se

200、nior Vice President Legal in January 2020,General Counsel and Corporate Secretary of Alaska AirGroup,Inc.and Alaska Airlines,Inc.in August 2017 and Horizon Air Industries,Inc.in January 2020,and Chief Ethics andCompliance Officer in January 2016.He is a member of Air Groups Management Executive Comm

201、ittee.He joined AlaskaAirlines,Inc.in February 2006 and has served in several roles including Senior Attorney from February 2006 to July 2009,Associate General Counsel and Managing Director Commercial Law and General Litigation from July 2009 to February 2011,182025/5/19 13:45alk-20241231https:/www.

202、sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm28/144Deputy General Counsel and Managing Director Legal from February 2011 to January 2016,Vice President Legal from January2016 to January 2020.Mr.Berry was elected Executive Vice President Cargo of Alaska Air Group,Inc.in Septe

203、mber 2024,and has been President ofHorizon Air Industries,Inc.since November 2023.He is a member of Air Groups Management Executive Committee.He joinedAlaska Airlines,Inc.in June 2013 and has served in several roles including Director Cargo Operations and Compliance from June2013 to September 2015,M

204、anaging Director Cargo from September 2015 to June 2019,and President of Alaska Airlines,Inc.swholly owned subsidiary McGee Air Services from January 2019 to December 2020.He was Vice President Cargo of Air Canadafrom January 2021 to February 2023 and returned to Alaska Air Group,Inc.as Senior Vice

205、President Operations of Horizon AirIndustries,Inc.from February 2023 to October 2023.Mr.Sprague was elected President and Chief Executive Officer of Hawaiian Airlines,Inc.and Hawaiian Holdings,Inc.inSeptember 2024,and Executive Vice President Hawaii Pacific of Alaska Airlines,Inc.in December 2024.He

206、 is a member of AirGroups Management Executive Committee.He has served in several roles,including Vice President of Alaska Air Cargo fromApril 2008 to March 2010,Vice President Marketing of Alaska Airlines,Inc.from March 2010 to April 2014,Senior Vice PresidentExternal Relations of Alaska Airlines,I

207、nc.from May 2014 to September 2017,President of Horizon Air Industries,Inc.fromNovember 2019 to October 2023,Sr.Advisor to the CEO of Alaska Airlines,Inc.from November 2023 to December 2023,andRegional President Hawaii and Pacific of Alaska Airlines,Inc.from December 2023 to December 2024.Mr.Harriso

208、n was elected Executive Vice President and Chief Commercial Officer of Alaska Airlines,Inc.in August 2015 and is amember of Air Groups Management Executive Committee.He joined Alaska Airlines,Inc.in November 2003 and has served inseveral roles including Managing Director Internal Audit from November

209、 2003 to February 2006,Managing Director FinancePlanning and Analysis from February 2006 to February 2007,Managing Director Network Planning and Financial Planning andAnalysis from February 2007 to March 2008,Managing Director Planning from March 2008 to December 2008,Vice President ofPlanning and R

210、evenue Management from December 2008 to May 2014,Senior Vice President of Planning and RevenueManagement from May 2014 to February 2015,and Executive Vice President and Chief Revenue Officer from February 2015 toAugust 2015.Ms.von Muehlen was elected Executive Vice President and Chief Operating Offi

211、cer of Alaska Airlines,Inc.in April 2021 and is amember of Air Groups Management Executive Committee.She joined Alaska Airlines,Inc.in July 2011 and has served in severalroles including Managing Director Airframe,Engine,Components Maintenance Repair and Overhaul of Alaska Airlines,Inc.fromDecember 2

212、012 to January 2018,Chief Operating Officer of Horizon Air Industries,Inc.from January 2018 to January 2019,andSenior Vice President Maintenance and Engineering of Alaska Airlines,Inc.from January 2019 to April 2021.Ms.Schneider was elected Senior Vice President People at Alaska Airlines,Inc.in June

213、 2019 and is a member of Air GroupsManagement Executive Committee.She joined Alaska Airlines,Inc.in March 1989 and has served in several roles includingSenior Vice President Inflight Services and Station Operations from September 1998 to July 2003,Senior Vice President CustomerService of Horizon Air

214、 Industries,Inc.from July 2003 to March 2009,Senior Vice President People and Customer Service ofHorizon Air Industries,Inc.from March 2009 to August 2011,Vice President of Inflight Services from August 2011 to January2017,Vice President Inflight Services and Call Center Services from January 2017 t

215、o August 2017,and Vice President of Peoplefrom August 2017 to June 2019.Ms.Birkett Rakow was elected Senior Vice President Public Affairs and Sustainability of Alaska Airlines,Inc.in November 2021and is a member of Air Groups Executive Management Executive Committee.She joined Alaska Airlines,Inc.in

216、 September 2017and has served as Vice President External Relations from September 2017 to February 2021 and Vice President Public Affairs andSustainability from February 2021 to November 2021.REGULATION GENERAL The airline industry is highly regulated,most notably by the federal government.The Depar

217、tment of Transportation(DOT),theTransportation Security Administration(TSA),and the FAA exercise significant regulatory authority over air carriers.DOT:A U.S.airline is required to hold a certificate of public convenience and necessity issued by the DOT in order to providepassenger and cargo air tra

218、nsportation in the country.Subject to certain individual airport capacity,noise and other restrictions,this certificate permits an air carrier to operate between any two points in the U.S.Certificates do not expire,but may berevoked for failure to comply with federal aviation statutes,regulations,or

219、ders or the terms of the certificates.2025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm29/144192025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm30/144While airlines are permitted to

220、establish their own fares without government regulation,the DOT has jurisdiction over theapproval of international codeshare agreements,marketing alliance agreements between major U.S.carriers,international andsome domestic route authorities,Essential Air Service market subsidies,carrier liability f

221、or personal or property damage,andcertain airport rates and charges disputes.International treaties may also contain restrictions or requirements for flying outsideof the U.S.and impose different carrier liability limits than those applicable to domestic flights.The DOT has been active inreviewing a

222、irlines operational performance and in implementing a variety of consumer protection regulations and directives,covering subjects such as advertising,passenger communications,denied boarding compensation,tarmac delay response,ticket refunds,family seating requirements,fee disclosures for ancillary s

223、ervices,and accommodations for passengers withdisabilities.In 2024,the DOT issued a final rule mandating refunds to passengers in certain situations and a final rule requiringdisclosure of certain ancillary fees.However,in August 2024,the U.S.Court of Appeals for the Fifth Circuit granted a motionfo

224、r a stay of the ancillary fee rule.Airlines are subject to enforcement actions that are brought by the DOT for allegedviolations of consumer protection and other economic regulations.We are not aware of any regulatory investigations orenforcement proceedings that could either materially affect our f

225、inancial position or impact our authority to operate.FAA:The FAA,through Federal Aviation Regulations(FARs),generally regulates all aspects of airline operations,includingestablishing personnel,maintenance and flight operation standards.U.S.airlines are required to hold a valid air carrieroperating

226、certificate issued by the FAA.Pursuant to these regulations,we have established,and the FAA has approved,ouroperations specifications and a maintenance program for each type of aircraft we operate.Each maintenance program providesfor the ongoing maintenance of the relevant aircraft type,ranging from

227、 frequent routine inspections to major overhauls.Periodically,the FAA issues Airworthiness Directives(ADs)that must be incorporated into our aircraft maintenance programand operations.All airlines are subject to enforcement actions that are brought by the FAA from time to time for allegedviolations

228、of FARs or ADs.At this time,we are not aware of any enforcement proceedings that could either materially affectour financial position or impact our authority to operate.TSA:Airlines serving the U.S.must operate a TSA-approved Aircraft Operator Standard Security Program(AOSSP),andcomply with TSA Secu

229、rity Directives(SDs)and regulations.Under TSA authority,we are required to collect a September 11Security Fee of$5.60 per one-way trip from passengers and remit that sum to the government to fund aviation securitymeasures.Airlines are subject to enforcement actions that are brought by the TSA for al

230、leged violations of the AOSSP,SDs orsecurity regulations.We are not aware of any enforcement proceedings that could either materially affect our financial positionor impact our authority to operate.The Department of Justice(DOJ)and DOT have jurisdiction over airline competition matters.The U.S.Posta

231、l Service hasjurisdiction over certain aspects of mail transportation services.Labor relations are regulated under the RLA.To the extent wecontinue to fly to foreign countries and pursue alliances with international carriers,we may be subject to certain regulations offoreign agencies and internation

232、al treaties.We are also subject to the oversight of the Occupational Safety and Health Administration(OSHA)concerning employee safetyand health matters.The OSHA and other federal agencies have been authorized to create and enforce regulations that have animpact on our operations.In addition to these

233、 federal activities,various states have been delegated certain authorities under thesefederal statutes.Many state and local governments have adopted employee safety and health laws and regulations.We maintain oursafety and health programs in order to meet or exceed these requirements.ENVIRONMENTAL W

234、e are also subject to various laws and government regulations concerning environmental matters,both domestically andinternationally.Domestic regulations that have an impact to our operations include the Airport Noise and Capacity Act of 1990,theClean Air Act,Resource Conservation and Recovery Act,Cl

235、ean Water Act,Safe Drinking Water Act,the ComprehensiveEnvironmental Response and Compensation Liability Act,the National Environmental Policy Act(including EnvironmentalJustice),Emergency Planning and Community Right-to-Know Act and the Toxic Substances Control Act.Many state and localenvironmental

236、 regulations exceed these federal regulations.The Airport Noise and Capacity Act recognizes the rights of airport operators with noise problems to implement local noiseabatement programs so long as they do not interfere unreasonably with interstate or foreign commerce or the national airtransportati

237、on system.Authorities in several cities have established aircraft noise reduction programs,including the imposition ofnighttime curfews.We believe we have sufficient scheduling flexibility to accommodate local noise restrictions.202025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766

238、421/000076642125000009/alk-20241231.htm31/1442025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm32/144The domestic U.S.airline industry committed to carbon neutral growth starting in 2020 for both domestic and international growth.The mechanis

239、m to comply with this commitment internationally is through the Carbon Offsetting and Reduction Scheme forInternational Aviation(CORSIA),which is a global,market-based measure that allows for eligible emissions offsets or the use ofCORSIA-eligible sustainable aviation fuel to mitigate the growth emi

240、ssions.The program is regulated by the FAA who thenaffirms compliance to the International Civil Aviation Organization.The FAA has approved both Alaska,Hawaiian,and Horizonsmonitoring,verification,and reporting plans.As a result of the COVID-19 pandemic,the CORSIA growth baseline year was modified a

241、nd set to 85%of 2019 carbon dioxideemissions.This does not have a direct impact on domestic flights,however the U.S.Environmental Protection Agency(EPA)finalized a rule in 2020 on aircraft emission standards which aligns with the international agreements.Additional emissionsreporting requirements an

242、d potential requirements to decarbonize both aircraft and ground equipment could have a significantimpact on our industry.The state of California has enacted rules that will expand required disclosures discussing the impact of environmental change;agencies within the federal government have proposed

243、 similar rules that are not yet finalized.Costs associated with compliancecould be significant.Except for these rules,we do not currently anticipate adverse financial impacts from specific existing orpending environmental regulation or reporting requirements,new regulations,related to our existing o

244、r past operations,orcompliance issues that could harm our financial condition,results of operations,or cash flows in future periods.INSURANCEWe carry insurance of types customary in the airline industry and in amounts deemed adequate to protect our interests and propertyand to comply both with feder

245、al regulations and certain credit and lease agreements.The insurance policies principally providecoverage for airline hull,spares and comprehensive legal liability,war and allied perils,and workers compensation.In addition,we currently carry a cyber insurance policy in the event of security breaches

246、 from malicious parties.We believe that our emphasis on safety and our state-of-the-art flight deck technology help control the cost of our insurance.WHERE YOU CAN FIND MORE INFORMATION Our filings with the Securities and Exchange Commission,including our annual report on Form 10-K,quarterly reports

247、 on Form10-Q,current reports on Form 8-K,and amendments to those reports are available on our website at ,free ofcharge,as soon as reasonably practicable after these reports are electronically filed with,or furnished to,the SEC.The informationcontained on our website is not a part of this annual rep

248、ort on Form 10-K.GLOSSARY OF TERMSAircraft Utilization-block hours per day;this represents the average number of hours per day our aircraft are in transitAircraft Stage Length-represents the average miles flown per aircraft departureASMs-available seat miles,or“capacity”;represents total seats avail

249、able across the fleet multiplied by the number of miles flownCASM-operating costs per ASM;represents all operating expenses including fuel,freighter costs,and special itemsCASMex-operating costs excluding fuel,freighter costs,and special items per ASM,or“unit cost”Debt-to-capitalization ratio-repres

250、ents adjusted debt(long-term debt plus capitalized operating and finance lease liabilities)divided by total equity plus adjusted debtDiluted Earnings per Share-represents earnings per share(EPS)using fully diluted shares outstandingDiluted Shares-represents the total number of shares that would be o

251、utstanding if all possible sources of conversion,such asstock options,were exercisedEconomic Fuel-best estimate of the cash cost of fuel,net of the impact of our fuel-hedging program and excluding operationsunder the Air Transportation Service Agreement(ATSA)with Amazon2025/5/19 13:45alk-20241231htt

252、ps:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm33/144212025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm34/144Freighter Costs-operating expenses directly attributable to the operation of Alaskas B737 freighter

253、aircraft and Hawaiians A330-300 freighter aircraft exclusively performing cargo missionsLoad Factor-RPMs as a percentage of ASMs;represents the number of available seats that were filled with revenue passengersPRASM-passenger revenue per ASM,or“passenger unit revenue”RASM-operating revenue per ASMs,

254、or“unit revenue”;operating revenue includes all passenger revenue,freight&mail,loyaltyprogram revenue,and other ancillary revenue;represents the average total revenue for flying one seat one mileRPMs-revenue passenger miles,or“traffic”;represents the number of seats that were filled with revenue pas

255、sengers;onepassenger traveling one mile is one RPMYield-passenger revenue per RPM;represents the average passenger revenue for flying one passenger one mileITEM 1A.RISK FACTORS If any of the following occurs,our business,financial condition,and results of operations could be harmed.The trading price

256、 of ourcommon stock could also decline.We operate in a continually changing business environment.In this environment,new risks mayemerge,and already identified risks may vary significantly in terms of impact and likelihood of occurrence.Management cannotpredict such developments,nor can it assess th

257、e impact,if any,on our business of such new risk factors or of events described inany forward-looking statements.We have adopted an enterprise-wide risk analysis and oversight program designed to identify the various risks faced by theorganization,assign responsibility for managing those risks to in

258、dividual executives,and align these risks with Board oversight.These enterprise-wide risks align to the risk factors discussed below.SAFETY,COMPLIANCE,AND OPERATIONAL EXCELLENCEOur reputation and financial results could be harmed in the event of an airline accident or incident.An accident or inciden

259、t involving one of our aircraft or an aircraft operated by one of our commercial partners or CPA carrierscould involve loss of life and result in a loss of confidence in our Company by the flying public and/or aviation authorities.Wecould experience significant claims from injured passengers,bystand

260、ers and surviving relatives,as well as costs for the repair orreplacement of a damaged aircraft and temporary or permanent loss from service.We maintain liability insurance in amounts andof the type generally consistent with industry practice,as do our commercial partners and CPA carriers.However,th

261、e amount ofsuch coverage may not be adequate to fully cover all claims,and we may be forced to bear substantial economic losses from suchan event.Substantial claims resulting from an accident in excess of our related insurance coverage would harm our business andfinancial results.Moreover,any aircra

262、ft accident or incident,even if it is fully insured or does not involve one of our aircraft,couldcause a public perception that our airlines or the aircraft we or our partners fly are less safe or reliable than other transportationalternatives.This would harm our business.Our operations are often af

263、fected by factors beyond our control,including delays,cancellations,and other conditions,whichcould harm our business,financial condition,and results of operations.As is the case for all airlines,our operations often are affected by delays,cancellations and other conditions caused by factorslargely

264、beyond our control.Factors that might impact our operations include:congestion,construction,space constraints at airports,and/or air traffic control problems,all of which many restrict flow;lack of adequate staffing or other resources within critical third parties;adverse weather conditions and natu

265、ral disasters;2025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm35/144lack of operational approval(e.g.new routes,aircraft deliveries,etc.);222025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-2024

266、1231.htm36/144contagious illness and fear of contagion;increased security measures or breaches in security;changes in international treaties concerning air rights;international or domestic conflicts or terrorist activity;random acts of violence on our aircraft or at airports;interference by moderniz

267、ed telecommunications equipment with aircraft navigation technology;disruption,failure,or inadequacy of systems or infrastructure under the control of third parties,including government entities;andother changes in business conditions.Due to the concentration of our flights in the Pacific Northwest,

268、Alaska,and Hawaii,we believe a large portion of our operation ismore susceptible to adverse weather conditions and natural disasters than other carriers with networks that cover a largergeographic area.A general reduction in airline passenger traffic as a result of any of the above-mentioned factors

269、 could harm ourbusiness,financial condition,and results of operations.We rely on vendors and third parties for certain critical activities and sourcing,which could expose us to disruptions in ouroperation or unexpected cost increases.We rely on vendors for a variety of services and functions critica

270、l to our business,including airframe and engine maintenance,regional flying,ground handling,fueling,computer reservation system hosting,telecommunication systems,informationtechnology infrastructure and services,and deicing,among others.We also rely on government-controlled systems such as airtraffi

271、c control technology that could malfunction for reasons out of our control.Our use of outside vendors increases our exposure to several risks.Even though we strive to formalize agreements with thesevendors that define expected service levels,we may not have the ability to influence change with all v

272、endors.In the event that oneor more vendors go into bankruptcy,ceases operation,or fails to perform as promised,for reasons such as supply chain delays,orworkforce shortages,replacement services may not be readily available at competitive rates,or at all.If one of our vendors fails toperform adequat

273、ely,we may experience increased costs,delays,maintenance issues,safety issues,or negative public perception ofour airline.Vendor bankruptcies,unionization,regulatory compliance issues,or significant changes in the competitive marketplaceamong suppliers could adversely affect vendor services or force

274、 us to renegotiate existing agreements on less favorable terms.These events could result in disruptions in our operations or increases in our cost structure.Impacts of climate change,including physical and transition risks,as well as market responses,may have a material adverseresult on our operatio

275、ns and financial position.Concerns regarding climate change,including the impacts of a gradual increase in global temperatures leading to more severeweather conditions,continue to rise.Increased frequency or duration of extreme weather conditions could cause significant andprolonged impacts to our o

276、peration,disrupt our supply chain,and influence consumer travel decisions.These disruptions mayresult in increased operating costs and lost revenue should we be unable to operate our published schedules.Additionally,we havemade commitments to reduce our greenhouse gas emissions which may require us

277、to make significant investments in emerging andyet unproven technologies.Should these technologies not prove ready,not gain approval,or not be sufficiently available for use inour operation,our results of operations may be adversely impacted,and we may be required to direct new investments to differ

278、enttechnologies.Public interest in U.S.airlines response to climate change has continued to grow.Failure to address the concerns ofour guests and our shareholders may lead to a reduction in demand for our services,including both leisure and business travel,infavor of competitors that customers perce

279、ive to be more sustainable.This could adversely impact our financial position,our resultsof operations,or our stock price.The airline industry continues to face potential security concerns and related costs.2025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/a

280、lk-20241231.htm37/144Terrorist attacks,the fear of such attacks or other hostilities involving the U.S.could have a significant negative effect on the airlineindustry,including us,and could:232025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm

281、38/144 significantly reduce passenger traffic and yields as a result of a dramatic drop in demand for air travel;significantly increase security and insurance costs;make war risk or other insurance unavailable or extremely expensive;increase fuel costs and the volatility of fuel prices;increase cost

282、s from airport shutdowns,flight cancellations,and delays resulting from security breaches and perceived safetythreats;and result in a grounding of commercial air traffic by the FAA.The occurrence of any of these events would harm our business,financial condition,and results of operations.COMPETITION

283、 AND STRATEGYThe airline industry is highly competitive and susceptible to price discounting and changes in capacity,which could have amaterial adverse effect on our business.If we cannot successfully compete in the marketplace,our business,financialcondition,and operating results will be materially

284、 adversely affected.The U.S.airline industry is characterized by substantial competition.Airlines compete for market share through pricing,capacity(supply),route systems and markets served,merchandising,and products and services offered to guests.We have significantcapacity overlap with competitors,

285、particularly in our key West Coast and Hawaiian markets.This dynamic may be exacerbated bycompetition among airlines to attract passengers during periods of economic recovery.The resulting increased competition in bothdomestic and international markets may have a material adverse effect on our resul

286、ts of operations,financial condition,or liquidityif we are unable to attract and retain guests.We strive toward maintaining and improving our competitive cost structure by setting aggressive unit cost-reduction goals.This isan important part of our business strategy of offering the best value to our

287、 guests through low fares while achieving acceptableprofit margins and return on capital.If we are unable to maintain our cost advantage over the long-term and achieve sustainedtargeted returns on invested capital,we will likely not be able to grow our business in the future or weather industry down

288、turns.Therefore,our financial results may suffer.The airline industry may undergo further consolidation or restructuring.In addition,regulatory,policy,and legal developmentscould impact the extent to which airlines can merge,or form and maintain marketing alliances and joint ventures with otherairli

289、nes,particularly U.S.carriers.These factors could have a material adverse effect on our business,financial condition,andresults of operations.We continue to face strong competition,mainly from other U.S.carriers.In many instances,our competitors have been able togrow and increase their competitive i

290、nfluence by merging with other airlines,as Alaska did with Virgin America in 2016 andHawaiian Holdings,Inc.in 2024.Some competitors have also benefited from the ability to reduce their cost structures through theU.S.bankruptcy process and restructuring laws.Competitors have also improved their compe

291、titive positions by entering marketingalliances and/or joint ventures with other airlines.Certain airline joint ventures promote competition by allowing airlines tocoordinate routes,pool revenues and costs,and enjoy other mutual benefits that can be extended to consumers,achieving many ofthe benefit

292、s of consolidation.In recent years,the U.S.antitrust authorities have been increasingly reluctant to approve airline mergers,cooperative marketingarrangements,and joint ventures.The emergence of merger-friendly antitrust policy at the federal level,and the possibility that thispolicy may be short-li

293、ved,might prompt other entities to act on opportunities that could have a material adverse effect on ourbusiness,financial condition,and results of operations.242025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm39/144Our concentration in cert

294、ain markets could cause us to be disproportionately impacted by adverse changes in circumstances inthose locations.Our strategy involves a high concentration of our business in key West Coast markets.A significant portion of our flights occur toand from our stations in Seattle,Portland,and the Bay A

295、rea.In addition to these markets,the acquisition of Hawaiian Holdings,Inc.in 2024 significantly increases the concentration of our operation in Hawaii,with Honolulu now representing Air Groupssecond largest hub.We believe that concentrating our service offerings in this way allows us to maximize our

296、 investment in personnel,aircraft andground facilities,as well as to gain greater advantage from sales and marketing efforts in those regions.As a result,we remainhighly dependent on our key markets.Our business could be harmed by any circumstances causing a reduction in demand for airtransportation

297、 in our key markets.An increase in competition in our key markets could also cause us to reduce fares or take othercompetitive measures that,if sustained,could harm our business,financial condition,and results of operations.We are dependent on a limited number of suppliers for aircraft and parts.Ala

298、ska is dependent on Boeing as its sole supplier for mainline aircraft and many aircraft parts.Horizon is dependent on Embraer.Each carrier is dependent on sole suppliers for aircraft engines for each aircraft type.Hawaiian is similarly dependent on a limitednumber of suppliers for its aircraft,aircr

299、aft engines,and many aircraft parts.As a result,we are vulnerable to issues associated withthe supply of those aircraft and parts including design or manufacturing defects,mechanical problems,contractual performance bythe manufacturers,or adverse perception by the public about safety that would resu

300、lt in customer avoidance or actions by the FAA.Should we be unable to resolve known issues with certain aircraft or engine suppliers,it may result in the inability to operate ouraircraft for extended periods.Additionally,if effects of ongoing supply chain constraints cause our limited vendors to hav

301、eperformance problems,reduced or ceased operations,bankruptcies,workforce shortages,or other events causing them to be unableto fulfill their commitments to us,our operations and business could be materially adversely affected.Should these suppliers be unable to manufacture,obtain certification for,

302、and deliver new aircraft,we may not be able to grow ourairlines fleet at intended rates,which could impact our financial position.Boeing has significant production constraints for theB737 and B787-9 aircraft,as well as regulatory delays for certain B737 aircraft.Recently,Boeing was impacted by an em

303、ployeestrike which temporarily halted production of B737 aircraft.These challenges have impacted and will continue to impact the timingof deliveries.If we are unable to receive aircraft in a timely manner,our growth plans could be negatively impacted.Given Alaskasand Hawaiians size relative to its c

304、ompetitors,these challenges may have a disproportionate impact on Alaska and Hawaiian.Additionally,further consolidation among aircraft and aircraft parts manufacturers could further limit the number of suppliers.Thiscould result in production instability in the locations in which the aircraft and i

305、ts parts are manufactured or an inability to operateour aircraft.We rely on partner airlines for codeshare and loyalty program marketing arrangements.Our airlines are parties to marketing agreements with a number of domestic and international air carriers,or“partners,”includingan expanded relationsh

306、ip with American and other oneworld carriers.These agreements provide that certain flight segmentsoperated by us are held out as partner“codeshare”flights and that certain partner flights are held out for sale as codeshare flights.In addition,the agreements generally provide that members of our airl

307、ines loyalty programs can earn credit on or redeem credit forpartner flights and vice versa.We receive revenue from flights sold under codeshare and from interline arrangements.The loss of asignificant partner through bankruptcy,consolidation,or otherwise,could have a negative effect on our revenue

308、or theattractiveness of our loyalty programs,which we believe is a source of competitive advantage.Additionally,we rely on partners toprovide available space for credit redemption on their aircraft.Should partners not make available enough inventory within theircabins for our members,the attractiven

309、ess of our program may be decreased.Alaskas membership in the oneworld global alliance may limit options to bring non-oneworld carrier partners into AlaskasMileage Plan program.Further,maintaining an alliance with another U.S.airline may expose us to additional regulatory scrutiny.Failure to appropr

310、iately manage these partnerships and alliances could negatively impact future growth plans and our financialposition.We routinely engage in analysis and discussions regarding our own strategic position,including alliances,codeshare arrangements,interline arrangements,and loyalty program enhancements

311、,and will continue to pursue these commercial activities.If other airlinesparticipate in consolidation or reorganization,those airlines may significantly improve their cost2025/5/19 13:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm40/144252025/5/19 13

312、:45alk-20241231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm41/144structures or revenue generation capabilities,thereby potentially making them stronger competitors of ours and potentiallyimpairing our ability to realize expected benefits from our own strategic re

313、lationships.As we evolve our brand we will engage in strategic initiatives that may not be favorably received by all of our guests.We continue to focus on strategic initiatives designed to increase our brand appeal to a diverse and evolving demographic of airlinetravelers.These efforts could include

314、 significant enhancements to our in-airport and on-board environments,increasing our directcustomer relationships through improvements to our purchasing portals(digital and mobile),and management of our customerloyalty program.In pursuit of these efforts,we may negatively affect our reputation with

315、some of our existing customer base.The Companys reputation could be harmed if it is exposed to significant negative publicity.We operate in a highly visible industry that has significant exposure to social media and other media channels.Negative publicity,including as a result of misconduct by our g

316、uests or employees,failures by our suppliers and other vendors,failure to achieve ourstated goals,or other circumstances,can spread rapidly through such channels.Should the Company not respond in a timely andappropriate manner to address negative publicity,the Companys reputation may be significantl

317、y harmed.Such harm could have anegative impact on our operating results.FINANCIAL CONDITIONWe have a significant amount of debt and fixed obligations.These obligations could lead to liquidity restraints and have amaterial adverse effect on our financial position.Additionally,increases in interest ra

318、tes may mean that future borrowings aremore costly for the Company,which could harm our future financial results.We carry,and will continue to carry for the foreseeable future,a substantial amount of debt and aircraft lease commitments.Although we aim to keep our leverage low,due to our high fixed c

319、osts,including aircraft lease commitments and debt service,adecrease in revenue could result in a disproportionately greater decrease in earnings.Similarly,a material increase in marketinterest rates could mean future borrowings are more costly for the Company.Our outstanding long-term debt and othe

320、r fixed obligations could have important consequences.For example,they could limit ourability to obtain additional financing to fund our future capital expenditures or working capital;require us to dedicate a materialportion of our operating cash flow to fund lease payments and interest payments on

321、indebtedness,thereby reducing funds availablefor other purposes;or limit our ability to withstand competitive pressures and reduce our flexibility in responding to changingbusiness and economic conditions.Further,should we incur incremental obligations,issuers may require future debt agreements toco

322、ntain more restrictive covenants or require additional collateral beyond historical market terms which may further restrict ourability to successfully access capital.Although we have historically been able to generate sufficient cash flow from our operations to pay our debt and other fixedobligation

323、s when they become due,we cannot ensure we will be able to do so in the future.If we fail to do so,our business couldbe harmed.Our business,financial condition,and results of operations are substantially exposed to the volatility of jet fuel prices.Significant increases in jet fuel costs or signific

324、ant disruptions in the supply of jet fuel would harm our business.Fuel costs constitute a significant portion of our total operating expenses.Future increases in the price of jet fuel may harm ourbusiness,financial condition,and results of operations unless we are able to increase fares and fees or

325、add ancillary services toattempt to recover increasing fuel costs.The price of jet fuel can be dependent on geography and may have a disproportionateimpact on our operating results due to our concentration on the West Coast.We are unable to predict the future supply of jet fuel,which may be impacted

326、 by various factors,including but not limited togeopolitical conflict,economic sanctions against oil-producing countries,natural disasters,or staffing and equipment shortages inthe oil industry.Any of these factors could adversely impact our operations and financial results.262025/5/19 13:45alk-2024

327、1231https:/www.sec.gov/Archives/edgar/data/766421/000076642125000009/alk-20241231.htm42/144Economic uncertainty,including a recession,would likely impact demand for our product and could harm our financialcondition and results of operations.The airline industry,which is subject to relatively high fi

328、xed costs and highly variable and unpredictable demand,is particularlysensitive to changes in economic conditions.We are dependent on consumer confidence,as well as the health of the U.S.economyand economies of other countries in which we operate.Unfavorable economic conditions have historically res

329、ulted in reducedconsumer spending and led to decreases in both leisure and business travel.For some consumers,leisure travel is a discretionaryexpense,and shorter distance travelers,in particular,have the option to replace air travel with surface travel.Businesses are able toforgo air travel by usin

330、g communication alternatives such as video conferencing or may be more likely to purchase less expensivetickets to reduce costs,which can result in a decrease in average revenue per seat.Unfavorable economic conditions also hamperthe ability of airlines to raise fares to counteract increased fuel,la

331、bor,and other costs.Additionally,reduced consumer spendingwould adversely impact revenue and cash flows from our co-branded credit card agreements.Unfavorable or even uncertaineconomic conditions could negatively affect our financial condition and results of operations.Our financial condition or res

332、ults of operations may be negatively affected by increases in expenses related to the airports inwhich we operate.Almost all commercial service airports are owned and/or operated by units of local or state governments.Airlines are largelydependent on these governmental entities to provide adequate a

333、irport facilities and capacity at an affordable cost.Many airportshave increased their rates and charges to air carriers to reflect higher costs of security,updates to infrastructure,and other expenses.Additional laws,regulations,taxes,airport rates,and airport charges may be occasionally proposed that could significantly increasethe cost of airline operations or reduce the demand for air travel.A