Seattle Times business reporter
Alaska Air Group felt the financial toll of lower travel demand in 2025, reporting a steep drop in profits but beating its own expectations for the final quarter of the year.
Ryan St. John, Alaska’s vice president of investor relations, said the full-year financial hit was mostly due to macroeconomic factors that were out of the airline’s control. He pointed specifically to tariffs, which threatened to raise prices for consumers across the board and weakened enthusiasm for travel.
A 43-day government shutdown and resulting mandate to cut flights in November, as well as an IT outage that grounded Alaska’s fleet in October, also played a role in the year-over-year drop. But St. John said “those were smaller in the grand scheme of things.”
Alaska Air Group – which includes Alaska Airlines, Hawaiian Airlines, regional carrier Horizon Air and ground support company McGee Air Services – reported net income of $100 million, or 83 cents earnings per share, for all of 2025, according to financial results released Thursday.
That’s compared with net income of $395 million, or $3.08 earnings per share, in 2024.
Factoring in tax changes and other special items, Alaska reported adjusted net income of $293 million, or $2.44 earnings per share, in 2025, down from adjusted net income of $625 million, or $4.87 earnings per share, in 2024.
Alaska Air profits drop amid tariffs, economic concern
A government shutdown, IT outage and high fuel prices lowered Alaska’s profits in the fourth quarter. A year of tariffs and economic uncertainty lowered the airline’s earnings for all of 2025, executives said Thursday.
Alaska and other carriers first saw a “clear drop-off” in demand in late February, St. John said in an interview Thursday. That decline dragged into the summer travel season, as consumers grappled with economic uncertainty.
Demand picked up again in late July and continued through the holidays, with a blip in the fall when the U.S. government shut down. But after the government reopened and flights resumed as normal, bookings also bounced back, St. John said.
The shutdown, IT outage and increased fuel prices on the West Coast led Alaska to lower its financial guidance for the fourth quarter in December, dropping its expected adjusted earnings per share from 40 cents to 10 cents.
The carrier beat that expectation, largely because fuel prices were more favorable than anticipated, St. John said.
In the fourth quarter, Alaska reported net income of $21 million, or 18 cents per share, compared with net income of $71 million, or 55 cents per share, in the same quarter in 2024.
Adjusting for special items, Alaska reported net income of $50 million, or 43 cents earnings per share, in the fourth quarter last year, compared with $125 million, or 97 cents earnings per share, in the last quarter of 2024.
Corporate travel was up 9% year-over-year, Alaska said, and revenue increased in three major buckets: premium revenue increased 7%, cargo revenue increased 22% and loyalty revenue increased 12%.
Alaska spent much of last year integrating Hawaiian Airlines into its operations, after finalizing the $1.9 billion acquisition in Sept. 2024. It received a joint operating certificate from the Federal Aviation Administration, launched a combined loyalty program, introduced a premium credit card and announced five new intercontinental routes from Seattle, making use of Hawaiian’s fleet of widebody planes.
“We finished the year strong as a company,” St. John said. “Now that we’ve gotten a lot of the big milestones … out of the way, we can get back to spending more of our energy focusing on running a really strong airline. December was a little preview of getting back to that.”
In January, the airline announced its largest aircraft order ever, placing an order for 105 Boeing 737 MAXs and five 787 Dreamliners.
So far, demand remains strong in 2026, St. John said, adding that Alaska has seen “some of the highest booking days in our history” in the last few weeks.
“We controlled everything we could control last year,” he said. “As we start the year here, hopefully some of these things that are not always in our control are trending in the right direction.”
Still, Alaska expects a loss of 50 cents to $1.50 per share in the first quarter of the year. For the full year, it expects adjusted earnings per share of $3.50 to $6.50.
Lauren Rosenblatt: 206-464-2927 or lrosenblatt@seattletimes.com. Lauren Rosenblatt is a Seattle Times business reporter covering Boeing and the aerospace industry.