Alaska Airlines is set to introduce new nonstop flights to Japan
Alaska Air Group expects to boost profits by $1 billion by 2027, aiming to capitalize on growing demand for high-end travel.
In September, Alaska completed its $1.9 billion acquisition of Hawaiian Airlines, shortly after securing a deal that opened up routes to Asia and Europe with wide-body aircraft such as the Boeing 787 Dreamliner and Airbus A330. While the two airlines continue to operate separately, Alaska has outlined plans for global expansion to compete with larger rivals like Delta Air Lines, which is facing increased competition from United Airlines for premium customers.
Alaska’s first move is to launch nonstop flights between Seattle-Tacoma International Airport, its home hub, and Tokyo’s Narita International Airport in May, using Hawaiian’s Airbus A330-200s. The airline will also introduce nonstop service between Seattle and Seoul’s Incheon International Airport in South Korea next October. Tickets for the Tokyo flights go on sale Tuesday, with fares for the Seoul route available in early 2025. By 2030, Alaska plans to serve at least 12 international destinations from Seattle using wide-body planes, reshaping its operations from a focus on West Coast routes to a more global reach.
In addition, Alaska announced a $1 billion share buyback and forecast pretax margins of 11% to 13% by 2027, with per-share earnings surpassing $10. The airline expects 2024 earnings of $3.50 to $4.50 per share, including Hawaiian’s results, and raised its fourth-quarter earnings forecast to 40 to 50 cents per share, up from a previous range of 20 to 40 cents.
Alaska’s shares surged over 13% to close at $61.29, the highest in more than three years, and have risen nearly 57% this year, outperforming the S&P 500. The airline is evaluating its premium seat offerings across its fleet, with Chief Financial Officer Shane Tackett noting that there is growing demand for more space and comfort, especially on Hawaiian’s Airbus A330s. He highlighted that an increasing number of customers are opting to purchase premium economy and first-class seats rather than relying on upgrades.
Delta, Alaska’s primary competitor in Seattle, has also seen a rise in demand for first-class seats. While Alaska dominates the domestic market with a 55% share at Seattle-Tacoma, Delta holds a larger share of international passengers. Alaska is also planning to open a new lounge at San Diego International Airport, while Delta recently announced the opening of its Delta One Lounge in Boston, its third such facility this year.
The airline is also launching a new premium credit card in partnership with Bank of America, aimed at generating revenue from customers even when they are not flying. The card will carry an annual fee of $395. Tackett also mentioned that Alaska is working with Boeing to address recent quality control issues that have affected aircraft deliveries, particularly after a near-miss incident involving a Boeing 737 Max 9 in January. Boeing’s production has been slowed due to these challenges, including a machinist strike that halted most aircraft production. However, Boeing has resumed 737 production and is expected to begin wide-body aircraft production at its Everett, Washington, facility in the coming days.