American Airlines Dives, Alaska Climbs On Q4 Earnings Reports

American Airlines (AAL) and Alaska Airlines (ALK) reported their fourth-quarter and full-year 2024 earnings, with contrasting results that sent their stocks in opposite directions. While American Airlines topped Q4 views, it missed its outlook for the full year, leading to a decline in its stock price. In contrast, Alaska Airlines exceeded its guidance for adjusted earnings per share in both the fourth quarter and full year, driving its stock price higher. This article explores the key factors contributing to the divergence in stock performance between these two airlines and the strategic initiatives that drove Alaska Air Group's success in 2024.



American Airlines reported record fourth-quarter and full-year revenue of $13.7 billion and $54.2 billion, respectively. However, its full-year adjusted earnings per share missed the high end of its previously reported guidance. The company also announced an exclusive 10-year co-branded credit card partnership with Citi, which is expected to unlock even more value for AAdvantage® co-branded and Citi-branded cardmembers. Despite these positive developments, American Airlines' stock price fell following its earnings report, as investors focused on the missed full-year guidance and the company's ongoing debt reduction efforts.

Alaska Airlines, on the other hand, reported record full-year revenue of $11.7 billion and exceeded its guidance for adjusted earnings per share in both the fourth quarter and full year. The company also announced the repurchase of approximately $250 million in outstanding shares in the fourth quarter, indicating a strong financial position. Additionally, Alaska Airlines announced record performance-based pay, totaling six weeks pay for most Alaska and Horizon employees. These positive developments drove Alaska Airlines' stock price higher following its earnings report.



The divergent stock performance between American Airlines and Alaska Airlines can be attributed to several key factors. First, Alaska Airlines' strong operational and financial performance in 2024 was driven by strategic initiatives such as the acquisition of Hawaiian Airlines, effective capacity management, revenue improvement, cost control, operational reliability, and the Alaska Accelerate strategy. These initiatives allowed Alaska Air Group to expand its network, increase revenue, and improve margins, contributing to its strong financial performance.

In contrast, American Airlines' stock price decline can be attributed to its missed full-year guidance, ongoing debt reduction efforts, and the market's focus on the company's financial outlook. While American Airlines reported strong revenue growth and operational performance, investors seemed more concerned with the company's ability to meet its financial targets and reduce its debt levels.



The acquisition of Hawaiian Airlines played a significant role in Alaska Air Group's financial performance and growth prospects in 2024. The acquisition allowed the company to expand its network, increase revenue, and unlock $1 billion in incremental pretax profit over the next three years. The acquisition of Hawaiian Airlines was a key part of Alaska Air Group's "Alaska Accelerate" strategy, which focused on building scale, relevance, and loyalty to connect guests to the world with a remarkable travel experience rooted in safety, care, and performance.

In conclusion, the divergent stock performance between American Airlines and Alaska Airlines following their Q4 earnings reports can be attributed to several key factors, including their respective financial performance, strategic initiatives, and market sentiment. While American Airlines reported strong revenue growth and operational performance, investors focused on the company's missed full-year guidance and ongoing debt reduction efforts. In contrast, Alaska Airlines' strong operational and financial performance, driven by strategic initiatives such as the acquisition of Hawaiian Airlines and the Alaska Accelerate strategy, contributed to its positive stock price performance. As investors continue to evaluate the financial outlook of these airlines, the strategic initiatives and operational performance of Alaska Air Group may continue to drive its stock price higher, while American Airlines focuses on meeting its financial targets and reducing its debt levels.