Alaska Airlines lost $166 million in the first quarter of 2025 but is confident it will weather the impact of tariffs and economic uncertainty as it looks to launch new trans-Pacific nonstop routes later this year.
SeaTac-based Alaska Air Group, with newly absorbed Hawaiian Airlines, reported quarterly revenue of $3.1 billion, according to financial results filed Wednesday.
That’s up 41% from $2.23 billion in the first three months of 2024, before the airline merged with Hawaiian and when it was reeling from the impacts of the Alaska flight where a fuselage panel blew out of the plane.
Alaska expected to lose some money in the first quarter this year but the net loss of $1.35 per share — up from a loss of $1.05 per share in the first quarter last year — is slightly more than the company had expected.
Much of that loss was due to new trade and immigration policies that have put the global economy in limbo. In April, President Donald Trump enacted a 10% blanket tariff on most imports and a 145% tax on goods coming from China. Beijing, in response, enacted its own 125% tariff on imports from the United States.
While those tariffs don’t impact Alaska Airlines in the same way they would impact a retailer who relies on products from overseas, the levies could lower travel demand as the cost of other goods goes up and consumers are more cautious with their spending. Several countries, including Canada and the United Kingdom, have recently issued travel guidance related to scrutiny at border crossings and immigration law violations.
Alaska is optimistic that it’s prepared to weather the storm, even if the economy does slowdown in the near-term.
“We feel like we’re set up for whatever comes our way,” Ryan St. John, Alaska’s vice president of finance, planning and investor relations, said in an interview Tuesday ahead of the earnings release.
Aside from the “softening” macro environment, St. John said the elements of its business that Alaska can control are “going very well” and “costs are on track.”
He was referring to a range of initiatives, from a new loyalty program set up to capture customers following its merger with Hawaiian Airlines in September to expanding premium cabins to a new credit card, which saw sign-ups increase 25% year-over-year in the first quarter.
Alaska hasn’t seen direct impacts from the ongoing tariffs battle in terms of costs but has seen differences in bookings, depending on the market, St. John said. Planes are full, but seats may have been sold at lower fares than they would have otherwise.
“I think there is a certain portion of the population sitting back and waiting to see what is happening with the economy,” St. John said.
Alaska expected it would lose money in the first quarter this year because travel usually slows down then.
This year, a lot of the challenges are coming from the Hawaiian network. Unrelated to the new tariffs, the demand for flights from Asia to Hawaii has been depressed for some time because of the weakness of currencies like the Yen, St. John said.
But the economic uncertainty hasn’t stopped all interest in international travel. Bookings on Alaska’s new Seattle-to-Tokyo nonstop flight, launching May 12, have been in line with expectations.
That’s especially important for Alaska right now, as it’s making a big bet on international travel across the Pacific with its $1.9 billion merger with Hawaiian Airlines.
The acquisition will expand Alaska’s fleet to include widebody planes flying longer distances and tapping into new markets. It plans to introduce at least 12 nonstop global destinations with long-haul widebody aircraft from Seattle by 2030.
St. John said it’s too early to know if the tariffs will impact consumer’s travel patterns long term.
“We said we’re going to roll out this international travel through 2030, so there’s quite a lot of time. We’re still very bullish about it,” he said. “It’s still the right move long term.”
As part of the merger, Alaska will integrate widebody planes from Boeing’s European rival Airbus into its fleet. That means Alaska could theoretically have to pay tariffs on those imported planes, but it doesn’t have any Airbus aircraft on order, St. John said.
It does expect to receive seven 737 planes and one 787 plane from Boeing this quarter, along with two Embraer 175 jets. St. John said again it’s too soon to know if those deliveries would be impacted by the tariffs but, he said, “up until this point, Boeing’s been delivering on schedule.”
Alaska spent $40 million in costs associated with the Hawaiian acquisition this quarter.
Contract negotiations with the two companies’ workforces, which will operate under a single contract, are ongoing. In February, Alaska’s flight attendants overwhelmingly approved a contract after two years of negotiations. Hawaiian flight attendants voted last week to extend their labor agreement.
United Airlines maintained its full-year revenue forecast but released a second prediction if the U.S. does slip into a recession. Delta withdrew its full-year guidance entirely and told investors it would scale back on planned growth.
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