Alaska Air Group, Inc.

What does it do?

Alaska Air Group flies people and cargo around the US, and to parts of Canada, Mexico, and Central America. Think of it as the dominant airline on the West Coast — if you've flown between Seattle, Portland, or San Francisco, you've probably seen their teal-tailed planes. In 2024, they completed a major acquisition of Hawaiian Airlines, which now runs as a separate segment under the same parent company. So today, Alaska Air is essentially two airlines under one roof, serving both the mainland US and the Pacific island routes Hawaii is famous for.

How does it make money?

Alaska Air makes the vast majority of its money selling plane tickets — both directly to travelers and through corporate travel contracts. On top of fares, they earn meaningful revenue from their co-branded credit card partnership with Bank of America, where they get paid every time someone earns or redeems Alaska miles. The Hawaiian Airlines segment adds Pacific routes including US mainland-to-Hawaii flights, which tend to carry premium pricing due to limited competition. With $14.2B in revenue against a net income of just $0.1B, margins are razor-thin right now, which is typical post-merger as integration costs eat into profits.

Why do investors care?

The core investment case is that the Hawaiian Airlines merger creates a uniquely powerful West Coast-to-Pacific network that neither company could build alone — and that the combined airline will eventually run more efficiently than two separate ones. If Alaska can cut duplicate costs, fill more seats on Hawaiian's routes, and cross-sell loyalty programs, profits could grow significantly without needing much more revenue. Investors also like that Alaska has historically been one of the better-run US airlines, known for keeping costs low and customer satisfaction high. The big 'what has to go right' is that merger integration stays on track and fuel prices don't spike.