ALK

Alaska Air Group put up sharply higher revenue in FY2025 — up 21.3% to $14.2B — reflecting a much larger network and scale than a year earlier. But the growth came at a steep cost to profitability: operating income fell 46.8% to $303M and net income collapsed 74.7% to just $100M, leaving razor-thin margins of 2.1% operating and 0.7% net and a 2.4% ROE. The combination of surging revenue and falling profit is the signature of a major integration that has expanded the top line while loading in costs that have yet to convert into synergy-driven earnings.

The airline model's structural challenges are on full display. Depreciation rose 36.4% to $795M as the fleet and asset base grew, long-term debt increased to $4.77B, and cash fell 47.8% to $627M, with current liabilities ($6.59B) well above current assets ($3.27B). That said, the business still generated $1.25B of operating cash flow, and management returned capital aggressively — $570M of buybacks (up 82.7%), cutting shares 6.9% — signaling confidence that earnings power will recover as integration costs roll off.