Alaska Air Group Inc at Goldman Sachs Industrials and Materials Conference Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : <_ALACRA_META_ABSTRACT>So Shane, you guys put out an AK earlier this morning calling out various transitory impacts, some Alaska specific, some industrywide, LA crack spreads, IT outage, government shutdown impact. If you'll humor me, I just wanted to (laughter) dig in on each of those, get the short-term ones out of the way. So this morning I've been feeling quite a few investor questions on the language in your [AK] around the shape of this government impact, investors focus on the language that you said you're almost back (laughter) some of your peers saying they are back. Can we just go through the replay of what you saw, how far off are (technical difficulty) we, maybe not that far at all. That'd be great. Shane Tackett - Alaska Air Group Inc - Chief Financial Officer, Executive Vice President - Finance Great, I appreciate the question. I'm going to do focus groups with investors before we do AK (laughter). Language in the future to make sure that it hits exactly how we intended it to hit. We actually wrote that, meaning for it to come across as relatively bullish. And I think it's been read a little bit as bearish and so I appreciate you letting me sort of set the record straight. So going into the cancellations that were part of the government shutdown which didn't start right immediately upon the government shutdown but ultimately were a feature of it. We actually had been experiencing or seeing bookings and revenue look as good on a year-over-year basis as it had all year and we've been waiting for that trend to return as you guys know sort of mid-February, the big fall off, especially in domestic sort of industry revenues had been starting to creep their way back up through August and September and October and had continued on that positive trend back towards closer to the levels LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 04, 2025 / 6:30PM, ALK.N - Alaska Air Group Inc at Goldman Sachs Industrials and Materials Conference we had seen exiting last year and entering this year and were as good as they had been on a year-over-year basis right before we had to start executing the flight cancellations and then like everybody else booking sort of hollowed out and went negative on a year-over-year basis for the duration of the cancellation portion of the shutdown, and then they came back relatively quickly and continue to improve every day that we look at revenues, they're just not quite back to that level the day before we had to start canceling, but they're still better than 95% of the days that we have observed this year to date on a year-over-year basis and so. As we sit here, they may actually be back fully to what they were the day before the cancellation started, so it's really been a strong response and recovery of booking trends and revenue trends coming out of the shutdown and in fact, we last week came in stronger than we had expected had you asked us a week ago so. I think everything looks to be on the right trend line to us, and it looks like we're going to exit the year with a good base of strong demand going into next year.

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : Okay, and then as we roll into the first quarter, are you as booked as you would expect it to be? Is the pricing level on those bookings similar? Like, I guess long way of asking are 1Q bookings looking as you would have expected to be impact.

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : Okay, great. On the IT, this is another one that's come up in my investor conversations recently. Just give us a little more detail on what happened. I've been personally getting questions on is this related to the merger? Is it or it's just a fluke and some bad luck.

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : All right, great. All right, final one on the headwinds for we move to some tailwind discussion. On the refinery fire, are you back to paying pre-fire prices at the pump and maybe just a little bit of a longer-term one, are there any longer-term solutions to help solve for some of the volatility issues we're seeing on the West Coast just with all of the refining capacity that's come out?

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : Okay, great. Let's talk positive now. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 04, 2025 / 6:30PM, ALK.N - Alaska Air Group Inc at Goldman Sachs Industrials and Materials Conference You launched the new premium co-brand card a couple months ago that drove material acceleration and cash accumulation in September. You were estimating back at Investor Day roughly a year ago that would drive $40 million in incremental profits by 2027. Can you speak to how that's tracking versus goal? Some pretty impressive numbers. I'm assuming it's doing (laughter) better than you're initially expecting, but would love to know more.

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : Maybe next year (laughter).

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : Okay, another thing that to me seems to be going better than planned is the performance on the Hawaiian assets. So if I think back to a year ago, I think the thought process was that entity would probably lose around $200 million this year. I checked back at least on a GAAP basis nine months ended, you're closer to break even. I know the fourth quarter isn't the best for North American carriers, although I think, decently strong for someone with a beach destination. So can you just speak to how the Hawaiian assets have gone this year versus your expectation and what's been better. LSEG STREETEVENTS | www.lseg.com | Contact Us consent of LSEG. 'LSEG' and the LSEG logo are registered trademarks of LSEG and its affiliated companies. DECEMBER 04, 2025 / 6:30PM, ALK.N - Alaska Air Group Inc at Goldman Sachs Industrials and Materials Conference

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : Okay, that's great. Maybe shifting to cost side ledger into next year, based on your delivery schedule, we're forecasting that suites up low-single digit. In my model I've got ASMs up 3%. Realize, we don't have '26 guidance yet, but on that level of growth, layering in the ramp and cost energies is low-single-digit unit cost inflation on the table, what are some of the key puts and takes we should have in mind?

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : Maybe just one follow-up on the fleet mix part of your response. I know this year there was some outside regional flying just based on some of the cuts you had to make close in on the mainline side which was the pressure on (inaudible). Is that an issue that continues into next year or should we see -- we should see a better mainline versus regional mix or (multiple speakers) Perspective?

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : Okay, great. Another on the tailwind side, I want to drill down for a moment on cost synergies tied to the merger. So I know there's a $200-million target that's net of labor cost of synergies which I think in the original filing was $60 million. So if we just put new labor contracts aside for a moment, those are lumpy what are the biggest buckets of the cost synergies and what are like the gating factors to each of those buckets being able to kick in? I think we just might have hit one of them with a single operating certificate. Would love to hear how head count optimization post single operating certificate plays a factor into next year.

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : Okay, got it. Maybe switching to fleet, you had just gotten back to single fleet type post Virgin America acquisition when you announced the Hawaiian transaction might have give you a little bit of trouble over that, but obviously with the international network you need a wide body fleet. Once you already have one sub-fleet, is it just a very different discussion than what you were thinking post Virgin acquisition and then or other opportunities on the domestic fleet to be right size? I know the 717s are a little bit long in the tooth like this how are we thinking about fleet over the next couple years.

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : I always love the detail personally, but (laughter) they were bringing a higher level for the next one. It's been over a year since the Hawaiian merger closed. Would love to hear more on what surprised you, what's gone better, maybe what didn't go as well, and are there some areas that are just larger opportunities than you would have been able to tell before the books closed.

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : Got it. And maybe just quickly you named a few things you're excited about like if you had a top three. I won't hold you to three if you want to do four or five, but (laughter) if you had a top punch list for like what you think the biggest tailwinds of '26 are what would you say?

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : Even before my final question, I have to say I'm really surprised that you're surprised you could fill a room with airline geeks because don't you get cornered at every cocktail party you go to ever? (multiple speakers)

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : It's aspirational, right?

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : Okay, final question, we talked about what the setbacks have been ad nauseam earlier this year, Alaska specific industry. How has this changed your view, if at all, on the $10 2027 EPS target? View hasn't changed. What gives you the confidence?

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : And I guess to be fair, the $10 didn't include any buybacks, so you're already 50% through the program.

Question: Catherine O'Brien - Goldman Sachs Group Inc - Analyst : All right, well, on that upbeat and hopeful note for the future, we'll call it a day. Thanks so much, Shane.