Alaska Airlines plans new nonstop flights to Japan, Korea

alaska airline group expects profits to increase by $1 billion by 2027 and plans to ride the wave of luxury travel demand to get there.

Alaska Airlines completed its $1.9 billion acquisition of Hawaiian Airlines in September, less than a year after inking a deal that gave it access to trans-Pacific routes and wide-body aircraft from Hawaiian and other carriers. boeing 787 Dreamliner and Airbus A330. The two brands operate separately.

Alaska Airlines will begin non-stop service between its home base of Seattle-Tacoma International Airport and Tokyo’s Narita International Airport in May with Hawaiian Airlines’ Airbus A330-200s, and will begin direct service between Seattle and Seoul, South Korea’s Incheon International Airport in October. Alaska Airlines announced that it will operate the flight. Tickets for the new Tokyo flight go on sale on Tuesday, with fares for the latter route going on sale in early 2025.

Alaska Airlines plans to use wide-body aircraft to serve at least a dozen international destinations from Seattle by 2030 and restructure the airline.

The company announced Tuesday that it had approved a $1 billion share buyback.

Alaska also expects pre-tax margins to be between 11% and 13% in 2027 and earnings per share of more than $10. In October, the company expected 2024 earnings to be between $3.50 and $4.50 per share, including Hawaiian’s results. The company raised its fourth-quarter earnings forecast to 40 to 50 cents per share, up from the previous estimate of 20 to 40 cents.

Alaska shares have risen nearly 40% since the beginning of the year, outpacing the S&P 500’s 27% rise through Monday’s close. The company’s stock rose about 16% in morning trading on Tuesday after announcing its long-term plan, hitting a three-year high.

The carrier will also launch a new “premium” credit card in collaboration with its partners. bank of americathe latest co-branded deal aimed at bringing in revenue from customers even when they’re not on a plane.

Alaska Airlines values ​​the premium seating it offers across its fleet. Chief Financial Officer Shane Tackett told CNBC that the airline is particularly considering optional upgrades on Hawaiian Airlines’ Airbus A330s, as more customers are looking for more space and comfort while traveling. He said he would be willing to pay for it.

“If you look at the last couple of years, most of the revenue growth has been in demand areas, and I think that’s probably going to continue,” Tackett said. “We have a very good basic main cabin product… but more people want the opportunity to fly in premium economy and first class, and we need to meet that demand.”

Tackett said more seats than ever in first class and premium economy are being purchased outright by customers, rather than being filled with free upgrades.

seattle rival delta airlinesThe carrier’s 24% domestic passenger market share is second only to Seattle’s 55% in Alaska, but it is also watching changes in demand for its first class seats. However, Delta Air Lines has a larger share of international passenger traffic from the airport.

Alaska Airlines announced plans to open a new lounge at San Diego International Airport. Delta Air Lines announced Wednesday that it will open a Delta One Lounge in Boston exclusively for customers traveling in its top cabins. This is the third location to open this year, after openings in New York and Los Angeles.

Meanwhile, Tackett told CNBC he expects further changes to Boeing’s deliveries to Alaska.

In January, a nearly new Boeing 737 Max 9 in Alaska had a door plug blown off after it left the factory without a key bolt installed. The near disaster and increased quality inspections have delayed Boeing’s production and deliveries to airline customers such as Alaska. united and southwest.

“I think they’re making progress. It’s not going to happen in a week. It’s going to take time,” Tackett said of Boeing, adding that new CEO Kelly Ortberg is working with the aircraft maker. He said he was entrusted with stabilizing the situation. “We are in a position where we have to focus on getting people to understand that quality is most important. For us, quality is much more important than ratings.”

Boeing is scheduled to announce November aircraft orders and deliveries at 11 a.m. Tuesday, but the tally is expected to be affected by the nearly two-month-long machinists’ strike that has halted production of most of Boeing’s planes.

Boeing announced Tuesday that it has restarted production of the 737 at its facility in Renton, Wash., and said production at its Everett, Wash., plant would begin within days.