Alaska Air Group, Inc. Investor Day 2026

Good afternoon, and welcome to Alaska Air Group's 2026 Investor Day. On behalf of everyone at Alaska, Hawaiian, Horizon Air, and McGee Air Services, thank you for joining us today, whether you're here in Seattle or listening in on the webcast. The last time we spoke to you in 2024, we introduced Alaska Accelerate, a plan designed to restore our earnings power, strengthen our competitive position, and unlock the full potential of our company following the acquisition of Hawaiian Airlines. We will provide you an update on where we are in that journey, but today is also about the next chapter. This morning, we shared a series of announcements that represent the next phase of our transformation and position us for the years ahead.

Throughout the presentation today, you'll hear directly from members of our executive leadership team as they discuss how we're creating durable earnings growth, strengthening our competitive advantages, and building a company capable of generating sustained value for both guests and shareholders. We'll have approximately 75 minutes of prepared remarks, followed by a short break, and then a question and answer session. For those joining via the webcast, we'll continue broadcasting through Q&A, and a replay of today's event will be available afterwards on our investor relations website. Now, before we begin, I'd like to remind everyone that our comments today will include forward-looking statements regarding future performance and actual results may differ materially. Information regarding risk factors is available in our SEC filings. We'll also discuss certain non-GAAP financial measures, reconciliations for which can be found in today's materials and our SEC filings. With that, let's begin. We going to bring the heat.

Thank you for being here. Before we begin, let's acknowledge what many of you may be thinking. With fuel prices high and significant volatility in our industry, the idea might be this is not the best idea to have an investor day. Maybe some of you are thinking that today. We think it's the exact opposite, because investor days shouldn't be about explaining the last quarter or even the next quarter. They should be about explaining the future. The environment we're operating today won't be the environment we're operating in a year from now or even three years from now. What matters is whether we're building a company that is stronger, more resilient, and better positioned to create value through every cycle. That's why we believe this is exactly the right time to have this conversation.

Today is about who Alaska is becoming, the capabilities we've built, the opportunities ahead, and why we're so confident in the future of our company. Over the next hour, you'll hear from our amazing leaders about how we're building Seattle into a global gateway, strengthening Atmos, expanding our cargo platform, and creating new sources of earnings. Before we talk about where we're going, I want to spend a few minutes talking about how we got here. Because the future we're building didn't begin with Hawaiian Airlines, and it didn't begin with Alaska Accelerate. It began years ago with a simple realization. That in this industry, if you don't shape your future, someone else will shape it for you.

That's really the story we want to tell this afternoon. For decades, Alaska succeeded with a business model grounded in safe and reliable operations, remarkable care, structural cost advantages, and balance sheet discipline. Those strengths made us one of the industry's most profitable airlines for much of the last 20 years, and they remain core of who we are today. By almost every measure, we were winning. But we've learned something over the years. Success can be a dangerous thing. It can convince you that yesterday's model will win tomorrow's game. That's exactly the trap we wanted to avoid. Some of our thinking began with Virgin America. In 2016, we acquired Virgin to strengthen our position in California and expand our presence across the West Coast.

The acquisition made us a stronger airline, but it also taught us important lessons about network breadth, brand strength, and the power of customer loyalty. Those lessons stayed with us. We completed the Virgin integration, and were beginning to regain our footing when the pandemic upended the entire industry. That disruption gave us an opportunity to step back and ask some fundamental questions. What continued to differentiate Alaska? Where was our model becoming more vulnerable? What did we need to do to build, to compete, and win over the long term? At the same time, the industry was evolving. Premium experiences mattered more, global connectivity mattered more, loyalty programs mattered more. Success was increasingly being driven by three things: scale, relevance, and loyalty. Connecting guests to more places, delivering products and experiences that mattered more, and turning loyalty into an even greater competitive advantage.

We could see the limitations of our own position. We had a strong West Coast network, but our Seattle hub couldn't directly connect our guests to the world. We faced increasing competitive pressure in Hawaii, and the full potential of our loyalty platform was constrained by the reach of our network. We had a choice. Continue doing what we had done historically or evolve. Our choice was simple, disrupt ourselves or wait for the industry to do it to us. We chose to act. We acted because we could see where the industry was going. We knew what Alaska needed to become. That decision became Alaska Accelerate. As we developed Alaska Accelerate, we became very clear about what the future required. A broader network, a stronger commercial platform, deeper customer engagement, and a more diversified earnings base. That's what led us to Hawaiian.

We want to be very clear about something. Hawaiian did not create this new strategy. The strategy already existed. Hawaiian accelerated it. It strengthened our position in Hawaii, it expanded our network and international reach, it added wide-body capability, it strengthened our cargo platform, and it gave us the ability to build Seattle into a true global gateway much faster than we could have done organically. The Virgin experience also influenced how we thought about brands. We learned that brands matter because customers build strong emotional connections with them. When we looked at Hawaiian, we saw one of the strongest brands in aviation, deeply rooted to Hawaii, its culture, its people, its residents, and visitors. We wanted to preserve that and build on it. That led us to our dual brand strategy. Two powerful brands, one company, one connected network, and one powerful loyalty ecosystem.

One of the biggest advantages of bringing these airlines together is Atmos. Atmos has already established itself as an industry-leading loyalty program. It consistently punches above its weight and gives us a powerful platform to deepen engagement across both brands. Hawaiian makes that platform even stronger. We brought these companies together because we believe the combination could create something stronger than either airline could achieve on its own, and our conviction in that strategy continues to grow. Alaska Accelerate is built around four straightforward ambitions: connect our guests to the world, be Hawaii's trusted airline, deliver a remarkable travel experience, and diversify our future. That framework hasn't changed. What has changed is the size of the opportunity in front of us and the capabilities we now have to pursue it. We've got greater reach, stronger brands, more growth opportunities, and more ways to create durable earnings over time.

The goal was to build a stronger company. Here's the part we're most proud of. We did exactly what we said we were going to do. We created a transformational plan for our airline, and we delivered. We've completed some of the most complex operational work our industry undertakes, the kind of work that often only gets noticed when something goes wrong. We've delivered those milestones seamlessly. What I'm really proud of is on time and all the while our industry-leading operational performance. As you know, my background in ops, we had industry-leading operational performance, strong guest satisfaction, and record employee engagement. We've brought the airlines together, established one operating platform, unified loyalty, and launched a global gateway.

We're also roughly two-thirds of the way toward the $1 billion of incremental profit we committed to and are on track to remain the rest the full amount in 2027. Now, we know the question many of you are asking. If all this progress is real, why haven't the results fully reflected it yet? It's a fair question. External headwinds have masked some of the underlying earnings power we're building, and candidly, the results haven't yet been where we want them to be. But the things we control are moving in the right direction. You'll see the evidence throughout today's presentation, and we're not asking you to believe in a PowerPoint strategy. We're showing you the milestones we've delivered, the capabilities we've built, and the commercial initiatives that are beginning to contribute. Today represents an important transition point. The first phase of Alaska Accelerate was about building the foundation.

That work is complete. We're now entering the activation phase. This is where premium products contribute at scale, where international routes mature, where Atmos continues to grow, where cargo becomes more meaningful, and where our network, fleet, and commercial investments increasingly show up in our results. The heavy lifting is behind us. The value creation is in front of us. That first chapter was about building, this next chapter is about harvesting. Most importantly, we'll have multiple growth engines working together, reinforcing one another. That combination will expand our controllable margins, raise our earnings floor, and create a more diversified stream of free cash flow across economic cycles. It's our path back to 11%-13% pre-tax margins and sustained earnings power above $10 per share. We're building a company with more ways to win, more durable competitive advantages, and greater resilience than Alaska has ever had.