OPERATING SEGMENT INFORMATION

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Operating Segment Information

OPERATING SEGMENT INFORMATION

Alaska Air Group has two operating airlines—Alaska and Horizon. Each is regulated by the U.S. Department of Transportation’s Federal Aviation Administration. Alaska has CPAs for regional capacity with Horizon and SkyWest, under which Alaska receives all passenger revenue.

Under GAAP, operating segments are defined as components of a business for which there is discrete financial information that is regularly assessed by the Chief Operating Decision Maker (CODM) in making resource allocation decisions. Financial performance for the operating airlines and CPAs is managed and reviewed by the Company's CODM as part of three reportable operating segments:

•Mainline - includes scheduled air transportation on Alaska's Boeing jet aircraft for passengers and cargo throughout the U.S., and in parts of Canada, Mexico, Costa Rica, Belize, Guatemala, and the Bahamas.

•Regional - includes Horizon's and other third-party carriers’ scheduled air transportation for passengers across a shorter distance network within the U.S., Canada, and Mexico under a CPA. This segment includes the actual revenue and expenses associated with regional flying, as well as an allocation of corporate overhead incurred by Air Group on behalf of the regional operations.

•Horizon - includes the capacity sold to Alaska under a CPA. Expenses include those typically borne by regional airlines such as crew costs, ownership costs and maintenance costs.

The CODM makes resource allocation decisions for these reporting segments based on flight profitability data, aircraft type, route economics and other financial information.

The "Consolidating and Other" column reflects parent company activity, McGee Air Services, consolidating entries and other immaterial business units of the company. The “Air Group Adjusted” column represents a non-GAAP measure that is used by

the Company CODM to evaluate performance and allocate resources. Adjustments are further explained below in reconciling to consolidated GAAP results.

Operating segment information is as follows (in millions):

	Year Ended December 31, 2023
	Mainline		Regional		Horizon		Consolidating & Other(a)		Air Group Adjusted(b)			Special Items(c)		Consolidated
Operating Revenue
Passenger revenue	$	8,097	$	1,429	$	—	$	—	$	9,526		$	—	$	9,526
CPA revenue	—		—		374		(374)		—			—		—
Mileage Plan other revenue	599		49		—		—		648			—		648
Cargo and other revenue	244		—		—		8		252			—		252
Total Operating Revenue	8,940		1,478		374		(366)		10,426			—		10,426
Operating Expenses
Operating expenses, excluding fuel	5,841		1,121		344		(358)		6,948			443		7,391
Fuel expense	2,264		379		—		—		2,643			(2)		2,641
Total Operating Expenses	8,105		1,500		344		(358)		9,591			441		10,032
Non-operating Income (Expense)	(15)		—		(41)		3		(53)			(18)		(71)
Income (Loss) Before Income Tax	$	820	$	(22)	$	(11)	$	(5)	$	782		$	(459)	$	323
Pretax Margin									7.5		%			3.1		%

	Year Ended December 31, 2022
	Mainline		Regional		Horizon		Consolidating & Other(a)		Air Group Adjusted(b)			Special Items(c)		Consolidated
Operating Revenue
Passenger revenue	$	7,454	$	1,354	$	—	$	—	$	8,808		$	—	$	8,808
CPA revenue	—		—		359		(359)		—			—		—
Mileage Plan other revenue	538		52		—		—		590			—		590
Cargo and other revenue	244		—		—		4		248			—		248
Total Operating Revenue	8,236		1,406		359		(355)		9,646			—		9,646
Operating Expenses
Operating expenses, excluding fuel	5,216		1,085		383		(356)		6,328			580		6,908
Fuel expense	2,195		397		—		—		2,592			76		2,668
Total Operating Expenses	7,411		1,482		383		(356)		8,920			656		9,576
Non-operating Income (Expense)	30		—		(22)		1		9			—		9
Income (Loss) Before Income Tax	$	855	$	(76)	$	(46)	$	2	$	735		$	(656)	$	79
Pretax Margin									7.6		%			0.8		%

	Year Ended December 31, 2021
	Mainline		Regional		Horizon		Consolidating & Other(a)		Air Group Adjusted(b)			Special Items(c)		Consolidated
Operating Revenue
Passenger revenue	$	4,411	$	1,088	$	—	$	—	$	5,499		$	—	$	5,499
CPA revenue	—		—		406		(406)		—			—		—
Mileage Plan other revenue	402		59		—		—		461			—		461
Cargo and other revenue	212		—		—		4		216			—		216
Total Operating Revenue	5,025		1,147		406		(402)		6,176			—		6,176
Operating Expenses
Operating expenses, excluding fuel	4,101		1,096		373		(433)		5,137			(925)		4,212
Fuel expense	1,065		261		—		—		1,326			(47)		1,279
Total Operating Expenses	5,166		1,357		373		(433)		6,463			(972)		5,491
Non-operating Income (Expense)	(38)		—		(21)		3		(56)			—		(56)
Income (Loss) Before Income Tax	$	(179)	$	(210)	$	12	$	34	$	(343)		$	972	$	629
Pretax Margin									(5.6)		%			10.2		%

(a) Includes consolidating entries, Air Group parent company, McGee Air Services, and other immaterial business units.

(b) The Air Group Adjusted column represents the financial information that is reviewed by management to assess performance of operations and determine capital allocations and excludes certain charges.

(c) Includes special items and mark-to-market fuel-hedge accounting adjustments.

	2023		2022		2021
Depreciation and amortization:
Mainline	$	403	$	351	$	323
Horizon	48		64		71
Consolidated	$	451	$	415	$	394
Capital expenditures:
Mainline	$	1,473	$	1,544	$	236
Horizon(a)	200		127		56
Consolidated	$	1,673	$	1,671	$	292
Total assets at end of period:
Mainline	$	19,937	$	19,733
Horizon	1,352		1,157
Consolidating & Other	(6,676)		(6,704)
Consolidated	$	14,613	$	14,186