Dive Brief:
- An array of premium services helped boost Alaska Air Group’s bottom line, executives said on a Q4 2024 earnings call Thursday. The carrier reported record revenue of $11.7 billion for the year, up 13% year over year, according to the earnings report.
- Total premium cabin revenues increased by 10% year over year in 2024, according to Andrew Harrison, chief revenue officer and chief commercial officer.
- The airline continues to see strong demand for elevated experiences. “We expect premium to outperform main cabin product in 2025,” Harrison said during the call.
Dive Insight:
Despite beginning the year with the grounding of a third of its flights, Alaska ended 2024 on a high note with record revenue and the acquisition of Hawaiian Airlines in September.
As it looks to deepen its value to customers, the airline is offering more premium experiences.
“We’re focused on meeting all of our guests' needs, including expanding our premium products and experiences at every phase of the travel journey,” said Ben Minicucci, president and CEO of Alaska Air Group.
Alaska isn’t the only airline vying for customers willing to pay more for better experiences. Delta Air Lines, American Airlines and Southwest Airlines are updating their offerings, rolling out more luxury lounges and selling seats with more leg room.
Alaska is expanding its premium seating and completed 19 aircraft modifications to date, Harrison said. It plans to have 79 aircrafts retrofitted and in the air for the busy summer travel season.
Guests are showing increasing loyalty to airlines that provide better and more premium services throughout their journey, according to CFO Shane Tackett.
The airline’s loyalty program also brought in revenue.
“Our loyalty programs generated $2.1 billion in cash remuneration in 2024, with exceptionally strong fourth quarter results from promotions along with several exciting announcements that continue to create more value and choice for our guests,” Harrison said.
That included a new premium credit card the airline announced in mid-December that will launch this summer. The “strong initial demand” gives the airline confidence that it will “expand our loyalty footprint outside of our current geographies of strength,” Harrison said.
Hawaiian Airlines also rolled out Huaka’i by Hawaiian, a free loyalty program that offers Hawaii residents exclusive travel benefits.
“In the two months since launching this program, we've registered over 150,000 members,” Harrison said.
