Alaska Airlines plans new nonstop flights to Japan, Korea in $1 billion postmerger profit push

Alaska Airlines completed its $1.9 billion acquisition of Hawaiian Airlines in September, just a few months after the two companies signed a merger agreement. The deal allowed Alaska to expand its network into the Pacific region and acquire wide-body aircraft, including the Boeing 787 Dreamliner. Despite the merger, both brands continue operating separately under their respective names.

New International Routes Announced
On Tuesday, Alaska Airlines announced new international routes from its main hub, Seattle-Tacoma International Airport. Starting in May, the airline will launch flights to Tokyo’s Narita International Airport using Hawaiian’s Airbus A330-200s. In October 2024, flights will begin to Seoul’s Incheon International Airport. Tickets for the Tokyo route are already available, while bookings for Seoul will open in early 2025.

By 2030, Alaska intends to offer at least 12 international destinations from Seattle using wide-body aircraft.

Financial Expectations
In 2027, Alaska expects pretax margins of 11% to 13%, with per-share earnings surpassing $10. For 2024, earnings are forecasted to be between $3.50 and $4.50 per share, including Hawaiian Airlines’ results.

New Premium Services and Fleet Expansion
The airline is introducing a new premium credit card in partnership with Bank of America, enhancing its revenue from premium customers. Shane Tackett, Alaska’s Chief Financial Officer, emphasized the growing demand for first-class and premium seating, particularly on domestic routes from Seattle-Tacoma International Airport.

“We think there’s a very solid market for premium products. More people are willing to spend extra for first-class and premium economy seats,” Tackett told CNBC. He added that even during times of reduced demand, premium seating continues to sell well.

Alaska also plans to expand its fleet with new Boeing 737 Max 9s, with deliveries expected soon. However, Boeing's production has faced delays due to supply chain issues and a machinist strike, potentially affecting delivery schedules.

Lounge Expansion and Customer Experience
Alaska is focusing on enhancing customer experience by expanding its airport lounges. The airline recently opened a premium lounge at New York's JFK Airport and has similar projects planned for Boston, Los Angeles, San Diego, and Seattle.

“We're working hard to ensure travelers enjoy a high-quality experience at every stage of their journey,” Tackett noted, emphasizing that the premium travel experience remains a priority despite market challenges.

With a strong focus on fleet expansion, premium services, and global connectivity, Alaska Airlines aims to strengthen its market position and enhance customer satisfaction through long-term strategic investments.