SEATTLE- On July 17, Alaska Airlines (AS) announced that it will retrofit the 737 fleet with first class and other premium seats alongside the second quarter financial reports for 2024.
Ben Minicucci-led carrier will add 1.3 million premium seats per year with this new retrofit program to its main fleet.
Alaska Airlines First Class and Premium Seating
Alaska Airlines will expand First Class and Premium Class seating on over 200 aircraft starting September 2024. In early 2024, Alaska retrofitted its regional fleet, adding 400,000 Premium Class seats to E175 aircraft.
The 737-800 fleet will increase First Class seats from 12 to 16, keeping 30 Premium Class seats. Conversions begin in early 2025, finishing by the summer of 2026. The 737-900ER fleet will maintain 16 First Class seats but increase Premium Class from 24 to 30 seats. This process starts in the fall of 2024 and ends in the summer of 2025.
The 737-9 MAX fleet will keep 16 First Class seats and increase Premium Class from 24 to 30 seats, with conversions from spring 2025 to summer 2026.
Alaska Airlines partnered with RECARO to enhance First Class seats. New features include a calf rest, seatback device holder, 6-way headrest with neck support, and USB-C charging. Main Cabin and Premium Class on 737-800 aircraft will get device holders with cup holders, USB-C charging, and 6-way headrests.
The 737-900ER fleet will undergo an interior refresh while increasing Premium Class. The MAX9 aircraft will also convert six Main Cabin seats to Premium Class. These changes aim to meet the growing demand for premium seating and improve passenger comfort across Alaska Airlines’ fleet.
What Drives AS to Retrofit Cabins?
Alaska Airlines increases First Class and Premium Class seats to meet rising customer demand. This change makes seat upgrades more accessible for both business and leisure travelers.
Premium Cabin’s performance indicates a structural shift towards premium products. First Class revenues rose 8% and Premium Class revenues increased 6% in the latest quarter. First Class load factor reached 71%, up 4.3 points. This marks significant progress from previous paid load factors of 40% for mainline and all-coach regional fleets.
Despite adding premium seats, Boeing aircraft will maintain four lavatories, ensuring convenient restroom access for all passengers regardless of seating class.
SeaTac-headquartered carrier now allows passengers to upgrade to First or Premium Class up to 50 minutes before departure.
Alaska Airlines Q2 Results
Alaska Air Group reported its financial results for the second quarter ending June 30, 2024. The company achieved record quarterly revenue and a 15.8% adjusted pretax margin. CEO Ben Minicucci attributes this success to Alaska’s premium product and performance.
It’s clear that premium airlines are rising above the rest of the industry, and Alaska’s product and performance put us in that top tier, with a strong long-term outlook to grow and compete. That’s how we brought in record quarterly revenue and achieved a 15.8% adjusted pretax margin that should lead the industry. Thank you to our 23,000 employees for being safe, operating well, and taking care of our guests through our biggest summer travel season ever.”
The airline’s net income under GAAP for Q2 2024 was $220 million, or $1.71 per share. This compares to $240 million, or $1.86 per share, in Q2 2023. Excluding special items and fuel hedge accounting adjustments, net income was $327 million, or $2.55 per share, down from $387 million, or $3.00 per share, in Q2 2023.
Alaska Air Group repurchased 663,177 shares of common stock for about $28 million in Q2 2024. Total repurchases reached $49 million for the first half of 2024. The company generated $580 million in operating cash flow for Q2.
As of June 30, 2024, Alaska Air Group held $2.5 billion in unrestricted cash and marketable securities. The company’s debt-to-capitalization ratio stood at 45%, within its target range of 40% to 50%.
Fleet and Operations
Alaska Airlines reached a tentative agreement with mainline flight attendants, recognizing their contributions. Voting on this agreement will conclude by mid-August 2024.
The airline certified substantial compliance with the U.S. Department of Justice’s second request regarding the proposed Hawaiian Airlines acquisition. Alaska Airlines maintains open communication with the DOJ during the review process.
In Q2 2024, Alaska Airlines achieved a 99.5% completion rate, among the industry’s highest. The company received six 737-9 aircraft and three 737-8 aircraft, bringing the fleet total to 70 737-9s and four 737-8s. Horizon Air added one E175 aircraft, totaling 44 in its fleet.
Also Read: Alaska Airlines Orders New Boeing 737 MAX 10 and More – Aviation A2Z
Alaska Air Cargo added a second 737-800 freighter and expanded service to Los Angeles with twice-weekly flights. The airline purchased a 600,000-square-foot facility in Renton, Washington for training programs and operational teams, set to open in 2025 after renovations.
At San Francisco International Airport, Alaska Airlines moved to Harvey Milk Terminal 1, improving guest experience with advanced technology and partner proximity. The airline reintroduced hot meals in the Main Cabin and began expanding its lounge at Ted Stevens Anchorage International Airport (ANC), doubling seating capacity and enhancing amenities.
Routes and Recognition
Alaska Airlines announced 20 new nonstop routes for winter travel, including service to Vail, Colorado, La Paz, and Monterrey, Mexico. The airline will start seasonal daily service from Portland to New Orleans in January 2025, marking its 55th nonstop destination from Portland.
The company expanded its partnership with British Airways (BA), allowing customers to book nonstop flights between London and multiple U.S. cities directly through Alaska Airlines’ website and app.
WalletHub named Alaska Airlines Mileage Plan the best U.S. airline frequent flier program for 2024. Forbes ranked Alaska Airlines highest among U.S. airlines on its Best Employers for Diversity list. The American Customer Satisfaction Index awarded Alaska Airlines the highest satisfaction score for 2024 among all U.S. airlines.
According to the U.S. Department of Transportation, Alaska Airlines received the fewest customer complaints per 100,000 passengers of any U.S. airline in 2023. The airline performed 75% better than the industry average and 35% better than the second-ranked airline.
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