CNBC’s Phil LeBeau with Alaska Airlines CEO Ben Minicucci, join 'The Exchange' to discuss Q2 earnings, the recent IT outage and booking demand.

Alaska Airlines reported strong second quarter results, exceeding expectations on both revenue and profit, with a notable contribution from its Hawaiian Airlines operation. Despite this, the company issued lighter third quarter guidance, partly due to a recent IT outage that impacted earnings and ongoing investigations into its cause.

CEO Ben Minicucci expressed optimism about the remainder of the year, citing improved booking trends and yields since late June. He acknowledged the recent disruption caused by the IT outage and emphasized the company's commitment to strengthening its IT infrastructure. Minicucci also noted a recent increase in corporate travel and expects the second half of the year to outperform the first.

Alaska Airlines: We expect a better second-half of the year

American down 9% after lower than expected guidance for the full year, citing consumer weakness, and Alaska lower as well by nearly 5% after third quarter guidance came in light after the bell. The company beat on both the top and bottom lines, however. Here to discuss in a CNBC exclusive is Alaska Air CEO Ben Minacucci with our very own Phil LeBel. Welcome to both of you. Phil, kick things off. Thank you, Kelly. Ben, thank you for joining us today. I'm curious, and I want to start with what Kelly mentioned there. Yeah, you beat the street on the top and the bottom line in the second quarter, but it's the guidance that worries people. You're seeing an inflection. Explain exactly what you're seeing in terms of an inflection in demand and bookings. Good morning, Phil. Good morning, Kelly. Great to be with you guys. Yeah, you know, like you said, second quarter was strong. We beat our guidance, you know, at the top end, and record revenues, you know, 8% pre-tax margin is the top three in the industry. And one of the big things we had was our Hawaiian Airlines operation, the first quarterly profit since 2019. So what it just says is the integration is working, combining both airlines. You know, in terms of the guidance, and Phil, what you asked about in terms of, you know, the change in the consumer sentiment is we're seeing a change. You know, since the end of June going into July, we've seen a change in bookings. We've seen a change in yields. It's definitely an improvement from the first half of the year. And while you're seeing the guidance a little bit, you know, for the third quarter, we're two-thirds sold already for the third quarter, and only 15% sold for the fourth quarter. So we see a lot of the upside in the fourth quarter of the year, especially with the industry capacity backdrop. And that's why, you know, our guidance, you know, for the full year, we put it at floor 325. You know, when you talk about the third quarter, it's a little shy of what the analysts are expecting. And part of the issue is going to be the IT outage that you suffered just within the last week. And you indicate that there may be more IT outages. That's not reassuring to customers. When do you feel like you will have addressed this issue and you can say, yes, it is behind us? Yeah. Phil, first, I want to apologize to our guests for the IT outage over the last weekend. It was very disruptive, and I'm really sorry for the experience they had. And, yes, the IT outage had about a 10-cent EPS impact for us in the third quarter. We're still investigating, you know, the cause of the hardware failure had with the vendor. So that investigation is in progress. And like everything we do at Alaska, once we find out what happened, we put the mitigations in place so that it never happens again. So we're investing a lot in IT. We're doing the integration. We're improving systems. And, you know, our mindset is to have really a bulletproof, you know, IT infrastructure for our company and for our guests. And, Ben, you know, just to jump in on that, we might come back to that, obviously, because it's been a top-of-mind concern. I just want, if you could again put it in clear terms, what's going on with all the airline stocks today? I mean, is it a coincidence that everybody's down and everyone's talking now about softer demand trends in the coming months? What happened all of a sudden? You know, it's hard to say what happened today. You know, again, I see, Kelly, I see a better second half than the first half of the year. You know, so if you look at, you know, industry capacity, there's a better backdrop for industry capacity. If you look for us for corporate travel in the last two weeks, we've seen a significant jump in corporate travel. We're seeing better bookings. We're seeing better yields. So, you know, from our perspective, the second half is going to be way better than the first half. So hard for me to explain why prices are down so significantly. But I think the markets just need to digest all this information and hopefully things normalize to a better place.

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