Shane Tackett, the airline's CFO, believes this move will enable Alaska Airlines to become a single-fleet operator by 2024. However, this acceleration is expected to cost the airline between $300 million and $350 million in exceptional fleet transition expenses until year-end.
Tackett mentioned that the airline is in the final stages of discussions with multiple parties, including lessors, financial institutions, and other airlines, to sell its 10 Airbus A321s. The aim is to finalize the deal by Q2's end, with Tackett expressing confidence in the transaction's financial viability compared to maintaining the planes until their lease terms expire. Additionally, he stated that the agreement is structured to generate positive net present value and cash flow.
In Q1 2023, Alaska Airlines took delivery of six 737 MAX 9 planes, raising its 737-9 fleet count to 43 units. The company also acquired two 737 MAX 9s directly from Air Lease's order book. In January 2023, the airline retired its A320 and De Havilland of Canada Dash 8-400 fleets. Alaska Airlines reported a GAAP net loss of $142 million in Q1 2023, compared to a $143 million loss in the same period in 2022.
Nonetheless, total operating revenue increased by 31% year on year to $2.2 billion, while operating expenses rose by 27% to $2.4 billion. Alaska Airlines anticipates a 6-9% capacity increase in Q2 2023 compared to the same quarter in 2022, with CASM ex-fuel expected to rise by 1-3%. Tackett noted that the Q1 year-over-year comparison benefited from $35 million of lease return costs rolling off, which would not be the case for Q2.
Between December 31, 2022, and March 31, 2023, the airline's total debt decreased by $96 million to $2.1 billion, including $268 million of current debt. During the same period, total operating lease liabilities grew by $41 million to $1.7 billion. The company's total debt reached $3.7 billion, with $2.4 billion in unrestricted cash and marketable securities as of March 31, 2023, resulting in adjusted net debt of $1.3 billion.
In Q1, Alaska Airlines resumed its share repurchase program, buying back $18 million of common stock. The airline plans to repurchase at least $100 million worth of shares in 2023.
