Good morning and welcome to Alaska Air Group's annual meeting of shareholders. I would now like to introduce Board Chair Patricia Bedient and Alaska Air Group President and CEO Ben Minicucci.
Good morning, everyone, and welcome to Alaska Air Group's 2025 annual shareholder meeting. On behalf of the Board, I want to start the meeting by acknowledging all of you for your continued investment in our company. Thank you. We are a little over six months since we closed the acquisition of Hawaiian Airlines, and I could not be prouder of the progress this management team has made to bring the two airlines together. While integration work proceeds, the Board will continue its oversight of execution risks and progress towards synergy targets. I can say that on behalf of the Board, we have never been more excited and optimistic about the future of our companies. Ben will walk you through the foundation for our vision, Alaska Accelerate, which was rolled out at our Investor Day in December. After Ben's business update, we will come to you live with the business portion of the meeting.
We've set aside time to answer questions that are of interest to our investors. If you are a shareholder, you can submit your questions at any time on our virtual meeting website. We'll address as many questions as possible during the webcast. If we don't get to your question, please send it to the email address listed in the proxy statement. Now, before I hand it over to Ben, I want to take a moment to acknowledge Ken Thompson. After more than 25 years of dedicated service on the Alaska Air Group Board, Ken retires with a legacy of unwavering commitment, steady leadership, and a deep connection to the company's values. With strong ties to the state of Alaska and a distinguished career in the oil and gas industry, he brought invaluable insight and steadfast dedication to Air Group's success.
His thoughtful guidance, calm presence, and relentless pursuit of excellence have made a lasting impact on the airline, its employees, and the communities it serves. As we embark on this new chapter, we thank him for his remarkable contributions and enduring commitment to Alaska Air Group. Ken, we wish you and Pat the very best. Over to you, Ben.
Thank you, Patty. I'd also like to extend my thanks to Ken as he steps down. He has been a trusted advisor and supporter of the management team, offering wisdom and perspective that have helped guide us through many critical moments in our history. Notably, he was among the first members of the Safety Committee we formed after the loss of Flight 261 in 2000 and was an unwavering board proponent of our commitment to safety in the following years. His deep understanding of the company's values, coupled with his strategic mindset, has been instrumental in shaping key decisions that have strengthened our company. We will miss you, Ken. On to our business update. As Patty mentioned, this is an exciting and transformational time for Alaska Air Group.
We welcomed Hawaiian Airlines into our company in September, bringing with it a tremendous opportunity to combine the strengths of Alaska and Hawaiian, creating an outcome greater than the sum of its parts and a stronger airline to compete into the future. It is a unique chance to drive greater scale, relevance, and loyalty in the years ahead, what I believe are the core aspects it takes to succeed long-term in this ever-changing industry. We have a clear vision, what we call Alaska Accelerate: connect our guests to the world with a remarkable travel experience rooted in safety, care, and performance. It is a billion dollars in incremental pre-tax profit that we are geared to unlock over the next three years through a combination of commercial initiatives and at least $500 million in synergies.
It will return us to our target of 11%-13% adjusted pre-tax margins and pave the way to delivering $10 of EPS by 2027. Importantly, this transformation does not require wholesale change. We are not turning away from the fundamental strengths built over the past ten decades that have driven our success. We are keeping those. We are harnessing them and expanding on them to create an even more resilient business. Before we get to that, I want to note it is no coincidence that our 2024 performance underscored the strength of our existing business model. 2024 was a year that marked tremendous change for our company. From the unfathomable start with Flight 1282, our operation, our people, and our resilience were tested, but we stayed strong.
I would like to recognize our people for their unwavering efforts to restore our operation, care for our guests, and deliver another strong year of performance despite all the challenges. We generated a top-three adjusted pre-tax margin of just over 7%, grew our adjusted earnings per share 7.5% despite closing our acquisition of Hawaiian Airlines in September, and our revenue reached a record $11.7 billion. The strength of our balance sheet remains intact even after raising $2 billion in the capital markets for the acquisition, with net leverage at 2.4 x, and with line of sight to deleveraging back towards 1.5 x over the next 12 months-18 months. This is a testament to the fundamental strengths of our company cultivated over many years: our culture of safety and operational excellence, remarkable care and service, disciplined costs, and a strong balance sheet.
These have supported our success and continue to drive our future, which is all of this and more. That future is an exciting one. There are four primary ways we'll achieve our vision. First, we connect our guests to the world. As we unlock the power of our combined network and wide-body aircraft, we're launching an international gateway from Seattle and recognizing the power of a leading market position in Honolulu, a top 25 U.S. hub. Second, be Hawaii's trusted airline. By leveraging the tremendous brand equity of Hawaiian Airlines, a combined ability to serve 90% of destinations from Hawaii, a more robust loyalty program, and continued inter-island flying, we're committed to serving and caring for Hawaii's communities just as we are in the state of Alaska. Three, delivering a remarkable travel experience.
We continue to invest in the full end-to-end experience, from booking through our app to modernizing our airports, adding lounges, premium seating, and onboard amenities to create valuable experiences for all our guests. Lastly, diversify our future. Whether this is investing in innovation and sustainability, unlocking new technologies to improve efficiency, or further diversifying our revenue streams through partnerships in our cargo business, we are securing our future in new and more resilient ways. To close, we have a bright future ahead of us here at Air Group and confidence in our long-term vision. We're progressing well on our goals. We're on track to launch our new single loyalty platform this summer and achieve a single operating certificate later this year before moving toward a single reservation system in early 2026.
Our mindset, as it always has been, is to set ambitious goals and work hard to deliver them. In this combination with Hawaiian Airlines, we are again setting our sights on an ambitious future, and we're ready to execute on those targets to drive the next evolution for Air Group and continued success in this industry. Thank you again for your continued support and investment in our company.
Chair, Patricia Bedient.
Thank you, Operator. I will now introduce our director nominees. This year, there are ten director nominees, and each has agreed to serve a one-year term. All are present for today's meeting, and their biographies appear in the proxy statement. Besides myself, this year's nominees are James Beer, who has been a director since 2017. He chairs our Innovation Committee and serves on the Audit Committee. Ray Conner, who has been a director since 2018. Ray chairs the Compensation and Leadership Development Committee and serves on the Safety Committee. Dan Elwell, who has been a director since 2021 and serves on the Safety and Innovation Committees. Kathleen Hogan, who has been a director since 2019. Kathleen chairs the Governance, Nominating, and Corporate Responsibility Committee and serves on the Compensation and Leadership Development Committee.
Adrienne Lofton, who has been a director since 2021, serves on the Innovation and Compensation and Development Committees. Ben Minicucci, our CEO. Ben has held various leadership roles at Alaska Airlines for the last 20 years and has been on the board since 2020. Helvi Sandvik, who has been a director since 2013, chairs the Safety Committee and sits on the Compensation and Leadership Development Committee. Pete Shimer, a director nominee who, upon election, would serve on the Audit and Safety Committees. Finally, Eric Yeaman, who has been a director since 2012. Eric chairs the Audit Committee and also serves on the Governance, Nominating, and Corporate Responsibility Committee. Serving as a director of Alaska Air Group is demanding, and these people consistently rise to the challenge of the role.
It is a privilege to have people of this caliber and diversity serving our company, and we're honored to have them all here. Lewis Collins of KPMG is the company's independent public accountant. He is also present at today's meeting. Mr. Collins is available to respond to any questions you may have for KPMG regarding the company's financial statements. I will now call the meeting to order. Our General Counsel and Corporate Secretary, Kyle Levine, will take us through the business portion of the meeting and rule on any questions concerning the conduct and order of the meeting.
Thank you, Patty. This year, shareholders have been asked to vote on eight proposals. All shareholders entitled to vote at this meeting were sent notice that proxy materials were available online and by hard copy upon request. After a preliminary count, more than 102 million shares, or over 83% of eligible shares, are represented, which gives us a quorum. As soon as all the proposals in the proxy statement have been presented, we will take the vote. Shareholders who have already voted by proxy do not need to vote again except to change your vote. Registered shareholders and those with a legal proxy can vote during this meeting by checking on the Vote Here icon. As Patty mentioned, we will address questions of general interest to our shareholders following the vote. If you have any questions regarding today's proposals, please submit them online now as we describe them.
Today's voting will conclude, and the polls will close at 8:30 A.M. Pacific Daylight Time. We will report the preliminary results at the end of today's program. The first proposal is the election of ten directors. Patty introduced the board's nominees, whose names and qualifications are set out in the company's proxy statement. Each of the directors elected today will serve a one-year term ending with the 2026 annual meeting. The second proposal is an advisory vote regarding the compensation of the company's named executive officers. While this vote is advisory in nature, the Compensation and Leadership Development Committee will take the results into consideration when deciding future executive compensation arrangements. The third proposal is the ratification of KPMG as the company's independent accountants for 2025.
The fourth proposal is approval of amendments to the company's amended and restated Certificate of Incorporation to comply with foreign ownership limitations imposed on U.S. carriers by federal law. The fifth proposal is approval of amendments to the Certificate of Incorporation to provide for exculpation of certain officers and to remove obsolete provisions. The sixth proposal is the approval of amendments to the company's 2016 Performance Incentive Plan . The seventh proposal is the approval of amendments to the company's Employee Stock Purchase Plan . The eighth proposal is a shareholder proposal by John Chevedden to amend the company's Clawback Policy . To ensure we keep our meeting on track and have adequate time for questions at the end of our call, we are limiting the time for each proposal to two minutes. We will let you know as the two-minute mark approaches so you have time to wrap up your remarks.
If you go much beyond the two minutes, we will need to place your line on mute so that we continue moving the meeting along. Thank you in advance for your understanding. Mr. Chevedden has requested the opportunity to present his proposal to shareholders directly. Moderator, please open the line for him. Welcome, John. Please begin when you are ready.
Mr. Chevedden, your line is now open. Please go ahead.
Hello, this is John Chevedden. Proposal eight, improve Clawback Policy for unearned executive pay. Shareholders ask the board of directors to amend the company policy on recoupment of incentive pay to apply to each named executive officer and to state that conduct or negligence, not merely misconduct, shall trigger mandatory application of the policy. Also, the board shall report to shareholders in each annual meeting proxy the results of any deliberation regarding the policy, including the board's reason for applying or not applying the policy. This improved Clawback Policy shall at least be included in the governance guidelines of the company and be easily accessible on the company website. A number of companies claimed that they had already adopted this 2025 shareholder proposal and asked the Securities and Exchange Commission to validate their claim of adoption. The Securities and Exchange Commission refused in every instance.
Wells Fargo offers a prime example of why Alaska Air needs a stronger policy. After congressional hearings, Wells Fargo agreed to pay $185 million to resolve claims of fraudulent sales practices. The Wells Fargo board then moved to claw back $136 million from top executives. Wells Fargo, unfortunately, concluded that a top executive had only turned a blind eye to the practice of opening fraudulent accounts and thus failed any attempt at clawback and left $136 million on the table. This proposal alerts Alaska Air shareholders that Alaska Air executives can now be rewarded when they are negligent. This is the wrong incentive for Alaska Air executives at a time when the best incentives for Alaska Air executives should be supported. Please vote yes, improve Clawback Policy for unearned executive pay. Proposal eight.
Thank you, Mr. Chevedden. The company opposes Mr. Chevedden shareholder proposal for the reasons set forth in our proxy statement. We have received no questions directly related to the proposals, so this concludes the presentation of matters to be voted on.
Thanks, Kyle. That concludes the business portion of our meeting, which is now officially adjourned. Kyle, I'll hand it over to you for the question and answer portion of the meeting.
All right. Thank you, Patty. We had one pre-submitted question and have allotted about 10 minutes for questions from our shareholders. If you have a question that is of general interest to shareholders, please submit it now online. While shareholders submit their questions, I'd like to introduce our Assistant Corporate Secretary, Ali Wittenberger, who will help present the questions we receive. Ali, could you please read the pre-submitted questions and any live questions from our shareholders?
Thanks, Kyle. Patty, this first question is for you. A shareholder asked, when will Alaska Air Group reinstate dividends?
Thank you for the question. Air Group has a long history of balanced capital allocation, which allows us to grow and create value for our business, our people, and our shareholders. At the present time, we see the most opportunity in repurchasing shares as a way to return value to our shareholders, and we are currently executing repurchases under our existing $1 billion share repurchase authorization. However, we will continue to evaluate restating dividends when restating dividends make sense for Air Group. Next question.
Great. Thank you, Patty. This next one was live for you, Ben. How did tariffs impact the price of U.S.-built aircraft?
At this point, no. We are receiving delivery of, I believe the number is 17 MAX airplanes and 3 787s this year, and we do not anticipate or expect any impact to tariffs.
Okay. Wonderful. This last question we have, Diana, is for you. Given the changing legal and regulatory environments, would Alaska Air Group be willing to reconsider its net-zero target?
We do have a longer-term net-zero target, but right now we're most focused on two things. First is achieving our 2025 goals, including a goal related to fuel efficiency. We are the number one most fuel-efficient premium airline in the U.S., and we intend to retain that position, driving fuel savings, which correlate with emission savings through initiatives across our company. We are also in the process of setting goals for 2030 to be published early next year.
Thank you, Diana. We have no further questions.
Okay. That concludes the Q&A portion of today's meeting. The votes have been tabulated, and the preliminary results indicate that the ten directors introduced earlier have each been elected to one-year terms on the board of directors, with each director receiving the approval of at least 93% of the shares present. Proposal two, the advisory vote on the compensation of the company's named executive officers, received the approval of approximately 97% of the shares present and entitled to vote. Proposal three, ratification of the company's independent accountants, has passed, receiving the approval of approximately 98% of the shares present and entitled to vote. Proposal four, amendments to the company's Certificate of Incorporation to comply with foreign ownership limitations, has passed, receiving the approval of approximately 99% of the shares present and entitled to vote.
Proposal five, amendments to the company's Certificate of Incorporation to provide for exculpation of certain officers has passed, receiving the approval of approximately 93% of the shares present and entitled to vote. Proposal six, approval of amendments to the company's 2016 Performance Incentive Plan has passed, receiving the approval of approximately 94% of the shares present and entitled to vote. Proposal seven, approval of amendments to the company's Employee Stock Purchase Plan has passed, receiving the approval of approximately 99% of the shares present and entitled to vote. Proposal eight, the stockholder proposal to amend the company's Clawback Policy has failed, receiving approval of only 4% of the shares present and entitled to vote. The final voting results will be filed with the SEC on Form 8-K within the next few business days and will be available at alaskaair.com.
A recording of this meeting will also be available for replay on our website at alaskaair.com under the Investor Relations tab. Thanks, everyone, for joining us today.
Thank you. The Alaska Air Group Annual Shareholder Meeting has concluded. Thank you for attending. You may now leave the virtual meeting.