ALASKA AIR GROUP, INC.ALK

ALASKA AIR GROUP, INC. Debt Disclosure

10-KFiled Feb 12, 20263 min read
DEBT
 
Debt obligations on the consolidated balance sheet:
(in millions)
20252024
Fixed-rate notes payable due through 2037$115 $56 
Fixed-rate PSP notes payable due through 2031630 688 
Fixed-rate EETCs payable due through 2027715 864 
Fixed-rate Japanese Yen denominated notes payable due through 203151 88 
Variable-rate Japanese Yen denominated notes payable through 2033149 — 
Variable-rate PSP notes payable due through 203062 — 
Variable-rate notes payable due through 20371,639 1,283 
Loyalty financing, variable-rate term loan facility due through 2031743 750 
Loyalty financing, fixed-rate notes due through 20311,250 1,250 
Less debt issuance costs and other(45)(46)
Total debt5,309 4,933 
Less current portion
540 442 
Long-term debt, less current portion$4,769 $4,491 
Weighted-average fixed-interest rate3.9 %3.9 %
Weighted-average variable-interest rate5.2 %6.3 %

Approximately $651 million of the Company's total variable-rate notes payable are effectively fixed via interest rate swaps at December 31, 2025, resulting in an effective weighted-average interest rate for the full debt portfolio of 4.6%.

In 2025, the Company incurred debt of $885 million from multiple lenders and sources including $816 million secured by aircraft, and $69 million incurred as part of an agreement to finance certain E175 deliveries. Debt from this agreement is reflected as a non-cash transaction within the supplemental disclosures in the consolidated statements of cash flows. In 2025, the Company made scheduled debt payments of $452 million and prepayments of $67 million.

In 2025, interest rates on certain PSP debt were adjusted from a fixed-rate to a variable-rate, in accordance with the terms of the loan agreement. Additionally, the Company, through a wholly-owned subsidiary, amended its variable rate term loan facility, secured by assets associated with the Atmos Rewards program. The amendment provides for a repricing of the loan under the facility.

Subsequent to year-end, the Company incurred additional fixed-rate debt of $111 million due through 2038 and issued prepayment notices to prepay $102 million of variable rate debt.
Debt maturity

At December 31, 2025, long-term debt principal payments for the next five years and thereafter are as follows:
(in millions)
Total(a)
2026$554 
2027766 
2028330 
2029878 
2030268 
Thereafter2,580 
  Total principal payments$5,376 
(a) The Company recognized the long-term debt assumed in the Hawaiian acquisition at fair value as of the acquisition date. As a result, the amount in the consolidated balance sheets will not equal the total balance of remaining principal payments presented in this table.

Bank lines of credit
 
Alaska has a revolving credit facility for $850 million, expiring in September 2029, which is secured by a combination of Alaska and Hawaiian aircraft, slots, gates, routes, and other eligible assets. The facility has a variable interest rate based on SOFR plus a specified margin. As of December 31, 2025, the Company had no outstanding borrowing under this facility.

Alaska has a second credit facility for $106 million, expiring in June 2027, which is secured by aircraft. Alaska has secured letters of credit against this facility.

Covenants

Certain debt agreements and credit facilities contain customary financial covenants, including compliance with certain debt service coverage ratios and minimum liquidity requirements. The Company and its subsidiaries were in compliance with these covenants as of December 31, 2025.

Historical Timeline

Fiscal YearFiled
2025Feb 12, 2026Showing above
2017Feb 15, 2018
2016Feb 28, 2017

About Debt Disclosures

Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.

Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.

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