ALK NYSE Russell 1000 Earnings call

Alaska Air Group, Inc. (ALK) · Q2 2026 results and valuation

Share price: $41.03 · 2026-11-11

ALASKA AIR GROUP, INC. provides scheduled air transportation of passengers and cargo across North America, Latin America, Asia, and the Pacific. The company operates several airlines, including Alaska Airlines, Hawaiian Airlines, and Horizon Air, and provides aviation services through its subsidiary McGee Air Services. Source: 10-K annual report (2026-02-12)

Results Q2 2026 vs Q1 2026 · previous quarter · published 22 Jul 2026 and 21 Apr 2026

Net loss narrowed on the previous quarter. Management sounded about as positive as a typical company call, in its script and in answers to analysts.

1 · Numbers

Loss narrowed

Net income vs Q1 2026

Outlook given

Net income -76.0M vs -193.0M

Revenue +23.2%

Why Against the same quarter last year (turned to a loss), net income fell because revenue growth of 10% was offset by a 6.5% increase in unit cost excluding fuel and a 3-point drag from historic Hawaii rainstorms on unit revenue.

2 · How management spoke

Typical

Less upbeat than 53% of company calls

Answers to analysts: restrained, in line with the script.

Similar to last call.

3 · What stood out

Alaska Air Group returned to profitability in June with a double-digit pretax margin despite fuel prices rising nearly 70% year over year.

Valuation

Is Alaska Air Group, Inc. undervalued?

Reverse DCF. Free cash flow from the last full fiscal year (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.

At 13.9% growth a year (3-year revenue growth), the model's fair value is $228.91 a share — the stock trades 82% below it. Today's price assumes −3.1% growth a year.

Current price

$41.03

close of 2026-11-11

Market implies growth of i

-3.1% for 10 yrs

Fair value / share

$228.91

Buy below

$171.68

Price vs fair value

Undervalued 82%

Price vs buy-below price

Undervalued 76%

Management expects

Growth +2.5% · from the Q2 2026 report: “ALK expects Q3 capacity to grow approximately 2% to 3% with all growth being intercontinental.”

A guidance figure for growth, usually one year ahead, not a 10-year free-cash-flow rate.

FCF growth / yr i Discount rate i Terminal growth i Margin of safety i

Official channels

The company's own website and social media accounts.

Read between the lines

Figure

Revenues for managed corporate travel increased over 40% as of July, impacting the company's revenue drivers for the quarter.

Source quote
“I will tell you right now, sitting in July, our revenues are up over 40% for managed corporate travel.”
Figure

ALK returned to profitability in June with a double-digit pretax margin due to improved unit revenue and unit costs despite fuel prices rising nearly 70% year over year.

Source quote
“Unit revenue strengthened unit cost improved, and we returned to profitability in June with a double digit pretax margin despite fuel prices up nearly 70% year over year.”
Figure

Second-quarter revenue grew to $4.1 billion, a 10% year-over-year increase on capacity that grew 1%.

Source quote
“In the second quarter, revenue grew to $4.1 billion a 10% increase year over year on capacity that grew 1%.”
Figure

Premium revenue rose to 35% of total revenue, an increase of 1.5 points this quarter.

Source quote
“Premium revenue now represents 35% of total revenue up 1.5 points this quarter.”
Figure

ALK added 4 additional 38 hundred freighters deployed across Hawaii and Alaska following a restructuring of its Amazon flying under a more profitable contract.

Source quote
“After restructuring our Amazon flying under a more profitable contract, we are now moving into the next phase of growth, adding 4 additional 38 hundred freighters deployed across Hawaii and Alaska.”

4 more

Figure

Forward corporate bookings rose to 37%, up from 30% in Q2, reflecting the improved domestic and international relevance of the expanded network.

Source quote
“Forward corporate bookings are up 37%, 7 points higher than the 30% achieved in Q2, reinforcing the improved domestic and international relevance of our expanded network.”
Guidance

ALK expects Q3 capacity to grow approximately 2% to 3% with all growth being intercontinental.
Guidance

System unit revenues are expected to improve sequentially from Q2 into the third quarter, reaching low double digits year over year.
Guidance

The company expects nonfuel unit costs to step down to low to mid single digits in the back half of the year as the cost plan remains on track.

Tone

How upbeat the language was, compared with other companiesi. Dot: Q2 2026. Ring: Q1 2026.

Prepared remarks Typical (was cautious)

Answers to analysts Restrained (was typical)

Script and answers carried a similar tone, so the script's message held up under questioning.

Sentences that drove the tone

“The second quarter marked the beginning of what I would describe as the full commercial activation of Alaska Accelerate and what I expect will be a strong ramping of revenue...”

“An inflection back to profitability and strong unit revenue growth.”

“And we see substantial opportunity to grow share internationally with our fair share in the premium cabin already improving after just recently turning on our ability to sell in the...”

Full figures

USD · SEC EDGAR XBRL (10-Q, period end 2026-06-30)

Metric	Q2 2026period end 2026-06-30	Q1 2026period end 2026-03-31	Change	Q2 2025	YoY
Revenue	4.07B	3.30B	+23.2%	3.70B	+9.7%
Operating income	-168.0M	-279.0M	Loss narrowed	277.0M	Turned loss
Net income	-76.0M	-193.0M	Loss narrowed	172.0M	Turned loss
EPS	-0.68	-1.69	Loss narrowed	1.42	Turned loss
P/E	12-mo loss	75.1	—	20.3	—

Topics

Most discussed now

New All the key levers post PSS that are coming into play to strengthen Alaska Air's position and the economics of that...
New Dwayne, the variable incentive pay is a combination of performance based pay program, which is the majority of that line.
New I it Alaska Air thought it was just time to bring everyone in to give you an update.
The work Alaska Air is doing today is strengthening its foundation improving its competitiveness, and positioning us to deliver meaningful…
While there was no way around the overwhelming fuel headwind, Alaska Air saw an extremely positive earnings trajectory throughout the…

Faded since Q1 2026

Fading Alaska Air reported an adjusted net loss of $192 million.
Fading From a demand and revenue perspective, performance in the first quarter was resilient despite the volatile macro backdrop and material...
Fading Together, these impacts reduced first quarter unit revenues by nearly one point, with effects continuing into April and May.
Fading Total Q1 revenues reached $3.3 billion, up 5% year over year on capacity growth of just 1.7%.

Latest announcements

Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.

2026-10-20 Results of operations; Regulation FD disclosure · SEC 8-K
2026-09-29 Regulation FD disclosure · SEC 8-K
Alaska Air Group has captured roughly two-thirds of its $1 billion incremental profit target, which includes $500 million in merger synergies, and plans to expand to at least 15 intercontinental destinations by 2030.
2026-07-21 Results of operations; Regulation FD disclosure · SEC 8-K
Alaska Air Group reported second quarter 2026 revenue of $4.1 billion, representing a 10% increase year-over-year on capacity growth of 1%.
2026-06-17 Director or officer change; Regulation FD disclosure · SEC 8-K
The Board approved an increase in Mr. Tackett's annual base salary from $659,813 to $692,804 and a long-term incentive award target of $3,000,000 following his election as president.
2026-06-03 Director or officer change; Regulation FD disclosure · SEC 8-K
Alaska Air Group, Inc. appointed G. Michael Sievert to its board of directors on June 1, 2026, with a prorated annual cash retainer of $85,320.
2026-05-14 Shareholder vote results · SEC 8-K · routine
2026-05-12 Material agreement; New financial obligation · SEC 8-K
On May 12, 2026, AS Mileage Plan IP Ltd. entered into an agreement to incur a new incremental class of $500 million in senior secured term loans.
2026-05-07 Other events · SEC 8-K
Alaska Air Group priced a private offering of $500 million in 6.5% senior notes due 2031 and expects to incur an additional $500 million in senior secured term loans.

Balance sheet & ownership

From SEC filings; short interest is FINRA data via Yahoo. Collected 2026-10-12.

Cash & runway

Cash & equivalents

$1.06B

2026-06-30

Short-term investments

$1.60B

total $2.66B

Implied runway

—

operating cash flow positive over the TTM window

Dilution

weighted-average basic shares, per quarter. Change: -6.5% YoY, -2.8% QoQ.

Quarter	Shares
Q3 2024	126.2M
Q1 2025	123.1M
Q2 2025	118.8M
Q3 2025	115.3M
Q1 2026	114.3M
Q2 2026	111.1M

Shares outstanding: 111.6M (2026-07-31)

Insider transactions

Form 4 open-market trades (codes S/P), trailing 12 months. Coverage: newest 50 of 56 filings; 50 filings parsed.

Sold by insiders

52.2K shares

$2.9M · 5 transactions

Bought by insiders

25.0K shares

$1.0M · 1 transactions

Net direction

net selling

Catalyst calendar

management-stated targets — from the latest earnings call; plans, not promises.

by 2027

remainder of the fleet expected to be equipped with Starlink Wi-Fi

Source quote
“With 1 third of our fleet, now equipped and remainder expected by 2027, we are excited to be delivering a best in class onboard experience.”
beginning in 2028

plan to retire the 717 fleet

Source quote
“Yesterday, we announced our plan to retire the 717 fleet beginning in 2028 and transition Neighbor Island flying to more modern fuel efficient Boeing 737s.”
upcoming Investor Day on September 29

discussion of what is ahead for Air Group

Source quote
“We will discuss this and more about what is ahead for Air Group at our upcoming Investor Day on September 29 here in Seattle.”
early 27

service to begin for 4 Boeing 737-800 freighters

Source quote
“We expect service to begin in early 27, and these aircraft will not only strengthen our reliable service for the communities we serve, but also create new revenue opportunities.”
Q3

capacity growth of approximately 2% to 3%

Source quote
“We expect Q3 capacity to grow approximately 2% to 3%.”