Shares of Alaska Air Group, Inc. (ALK) were trading over 5% higher in Tuesday’s pre-market session after the firm unveiled its three-year strategic plan, “Alaska Accelerate,” intended to deliver a billion dollars in incremental profit following its merger with Hawaiian Airlines.
The announcement comes hours before the airline’s 2024 investor day scheduled for 1:00 p.m. ET, its first since the merger with Hawaiian, where it is expected to discuss further details regarding the program.
The firm’s new financial targets for 2027 include a billion dollars in incremental profits, earnings per share of at least $10, double-digit pretax profit margins of 11-13%, no margin dilution in the first year following the merger, and synergy estimates doubled to at least $500 million.
Alaska Air will also begin offering new non-stop flights on A330 aircraft to key Asian leisure and business markets in 2025, connecting Seattle to Tokyo Narita in Japan and Seoul Incheon in South Korea.
In May 2025, it will commence a daily non-stop Seattle-Tokyo Narita service, while the non-stop Seattle-Seoul Incheon service is scheduled to begin in Oct. 2025.
The company will also launch a premium credit card “built for the global traveler, including an innovative Global Companion Award Certificate, 3x miles on all eligible foreign and dining purchases.”
For 2025, the airline expects capacity to grow by 2% to 3% and earnings per share of at least $5.75. The firm also anticipates capital expenditure of $1.4 billion to $1.5 billion and sees share repurchases of approximately $250 million.
Alaska Airlines’ chief commercial officer Andrew Harrison said the firm expects unprecedented revenue growth at Alaska over the next three years.
“We’re focused on strengthening the commercial levers that drive the greatest guest satisfaction and, ultimately, preference. Our guests will benefit from more premium seats, an enhanced loyalty program with even more ways to earn and redeem miles, and new global destinations to the places they most want to go,” he said in a prepared statement before the investor day conference.
Following the announcement, retail sentiment on Stocktwits jumped into the ‘extremely bullish’ territory (84/100) compared to ‘bullish’ a week ago. The move was accompanied by high retail chatter.
ALK’s Sentiment Meter and Message Volume as of 6:58 a.m. ET on Dec. 10, 2024 | Source: Stocktwits
Alaska Air Group shares have gained over 41% year-to-date, outperforming major U.S. benchmark indices.
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