Alaska Air Group, Inc.

Good morning, ladies and gentlemen, and welcome to the Alaska Air Group 2026 third quarter earnings call. At this time, all participants have been placed on mute to prevent background noise. Today's call is being recorded and will be accessible for future playback at alaskaair.com. After our speaker's remarks, we will conduct a question and answer session for analysts. I would now like to turn the call over to Alaska Air Group's Vice President of Finance, Planning, and Investor Relations, Ryan St. John.

Thank you, operator, and good morning. Thanks for joining us today to discuss our third quarter 2026 earnings results. Yesterday, we issued our earnings release, detailing our results, which are available at investor.alaskaair.com. Today, you'll hear updates from Ben, Andrew, and Shane. Several others of our management team are also on the line to answer your questions during the Q&A portion of the call. Air Group reported a third quarter gap net loss of $147 million, or $1.32 loss per share. Excluding special items and the impact of a revised tax rate, adjusted net income was $40 million and adjusted earnings per share was $0.36. As a reminder, forward-looking statements about future performance may differ materially from our actual results. Information on risk factors that could affect our business can be found within our SEC filings. We will also refer to certain non-GAAP financial measures, such as adjusted earnings and unit costs excluding fuel. and as usual, we've provided a reconciliation between the most directly comparable GAAP and non-GAAP measures in today's earnings release. Over to you, Ben.

Thanks, Ryan, and good morning, everyone. Just a few weeks ago, we laid out the next chapter for Alaska Air Group and our path to becoming a larger, more diversified and more resilient business. Our third quarter results reinforce our confidence in that strategy. Despite unprecedented fuel prices, are adding $1.8 billion in costs this year and pressuring our profitability. Demand remains healthy, revenue performed in line with our expectations, and we continue to execute across our initiatives in premium, loyalty, cargo, and international, all helping to drive a seven-point RASM to CASMX spread for the quarter, up from two points in Q2. We continue to see strong momentum across the four strategic growth areas we highlighted at our investor day. We said the first chapter of Alaska Accelerate was about building the foundation and the next chapter was about harvesting the value from it. That transition is underway. The investments we've made over the last several years are driving greater scale, deepening our relevance with guests, and strengthening loyalty across our geographies. Diversified revenues now represent 54% of our total mix, up four points from last year and one point from last quarter. As this mix continues to grow, our earnings will become less dependent on fuel and more resilient. Premium demand remains robust, with revenues reaching more than 36% of our total mix, up three points year over year. That reflects the strength of our products and our growing relevance across the West Coast and beyond as we build toward our 40% target by 2030. Our international franchise in Seattle is growing rapidly. We're excited to announce that next spring we'll launch year-round service from Seattle to Osaka, Japan and Papeete, Tahiti. That brings our nonstop international routes out of Seattle to nine as we build toward 15 and our goal of becoming Seattle's number one long-haul international carrier by 2030. And we see even more opportunity ahead as we prepare to file with the DOT to join the Atlantic and Pacific joint international businesses in the coming weeks. Loyalty program cash grew 21%, another strong indication that the investments we're making are driving greater relevance and deeper loyalty with our guests. And lastly, cargo revenue grew 9%. We're optimistic about growing this business to a more meaningful level as we deploy our new 737 freighters in Alaska and Hawaii next year and work toward renewing our partnership with Amazon with better economics and expanded service. Our focus remains on the things we can control and as we're demonstrating, those things continue to move in the right direction. We know we can do better than the results we're producing today. That's precisely why we're focused on the areas of the business we believe will drive higher and more resilient earnings over time. Premium, International, Loyalty, and Cargo are the path forward, and increasingly, we'll see the investments we've made over the last several years translate into tangible results across the business. And we're doing it with a team that is engaged, energized, and excited about the future. I want to thank our employees for their continued commitment to our guests and to one another. Their dedication makes everything we're accomplishing possible, and it gives me tremendous confidence in the opportunities ahead. And as we look to our next chapter, we're excited to welcome Amoresh Siva, our new Chief Information Technology Officer. He brings deep experience and strong leadership to the role, and I know he'll be an important partner as we continue to build the capabilities that will support Air Group's future. We have a lot of work ahead of us, but I'm confident in our strategy and in this team. Now, it's about execution and delivering the results. Andrew, over to you.