Andrew Harrison
Executive Vice President and Chief Commercial Officer at Alaska Air Group
Thanks, Ben, and good morning, everyone. My comments today will focus on second quarter results as well as our revenue outlook for the rest of the year. We produced very solid second quarter results. Our record-high revenues of $2.8 billion were up 6.8% versus the second quarter of 2022 and above the high-end of our guide, driven by strong leisure and close-in demand.
To close-out the quarter, on June 30th, we recorded our second-best revenue day in our history. Only did we outperform by the Sunday of Thanksgiving last year. Capacity for the quarter was up 19.9% versus the second quarter of 2022 and our planes continue to fly full with load factors increasing from 85.5% in April to 86.4% in May, and 89.1% in June, the second highest monthly load factor in our history.
Turning to unit revenues, changes are noisy on a year-over-year basis and down 2.9%, given both volatile pricing and capacity in 2022. However, when compared to a more stable 2019, we saw improvement in unit revenues of 23% for the quarter with June up 25%. We still expect July to produce the highest total revenue of any month in 2023, which is consistent with pre-COVID trends. But for the second straight year, June has supplanted July as the peak yield month for us.
Regarding product, strength in premium cabin revenues continue to support our revenue momentum. We launched the sale of exit row seats in mid March, and I'm pleased to report sales have been strong right out-of-the gate. Including exit rows, first and premium class revenues were both up approximately 12% year-over-year, outpacing main cabin by 8 points. In the second quarter, 31% of total revenues came from premium class products, up from 2022 and up 7 points from 2019.
On the loyalty side, the performance remained strong with bank cash remuneration up 15% versus the second quarter of 2022, outpacing our system revenue growth rate by 2 times. As always, we continue to prioritize delivering value to our guests through our loyalty program and we are proud to have been named the Number one Best Airline Reward program, the 2023, 2024 from US News earlier today.
Lastly, we are now selling nine of our partners on alaskaair.com and anticipate bringing on our 10th partner this fall. Phase one is to sell and service main cabin tickets, but later this year we will add the ability to sell premium cabins on our website, helping us to achieve our vision of providing our guests seamless ticketing capability on our portfolio of global partners with access to any major region of the world.
Now, I'll turn to our outlook and forward-looking guidance. Demand remains very strong even as we come off the peak of historically high phase, a trend we knew would happen at some point. Notwithstanding this evolution, yield is still meaningfully above 2019 levels on industry capacity that has now surpassed 2019 levels by an estimated 6% for the second half of 2023. For the third quarter, we expect revenues to be flat-to-up 3% on capacity that is up 10% to 13% versus 2022. This implies unit revenues down approximately 9% as the mid point. Our revenue guide is based on the environment we see today with 67% of third quarter revenues on the books.
When comparing our Q3 revenue guide to our Q2 results, this implies a 6 points sequential deceleration in unit revenue performance. Of that 6 points, roughly half is directly related to the pricing environment, while the other half is a combination of domestic industry capacity growth, tracking to be up 10% year-over-year, our states linked growth and holiday timing shifts.
As as primarily domestic leisure carrier, this summer presents a unique situation with the unprecedented surge in international demand, not just similar to the domestic last year. We believe pent-up international demand has had the effect of a larger pool from would be domestic travelers than has historically been the case. Long-haul international seats of the West Coast are up 31% year-over-year this June. Our loyalty members alone in June, as evidenced by our pool and redemption activity, we're filling the equivalent of 18 787s on a daily basis across our international partner network, up over 50% year-over-year, while our lounges experienced a 68% increase in visits from guests traveling internationally. While we believe this will ultimately normalize, there is a disproportionate impact on our realized domestic fares in the third quarter, which we estimate could impact our Q3 revenue performance by approximately a 0.5% to 1%, which is reflected in our guide.
Close-in demand is another important dynamic to address. Having improved recently, the percentage of passengers booked and flown within month during Q2 surpassed both 2022 and 2019 levels. This is particularly significant when compared to 2019 given our stage-length has increased 7%, with passengers skewed to more advanced booking patterns and business volumes remain down 25%. Although currently not in our forecast, if this trend persists, this represents an additional 100 basis points of revenue upside to our current third quarter guide.
Lastly, as it pertains to manage business travel, we have not seen any meaningful change, remaining around 75% recovered by volume, with both California and the technology sector still accounting for the largest gap to full recovery. However, we have seen more return to office efforts at major tech companies and are incrementally more optimistic that we might finally bake through the 75% recovered ceiling. Although we have not baked any of this into our guidance, we will continue to watch this closely as we move into the fall.
For the full-year, our revenue guide remains unchanged at up 8% to 10% versus 2022, but on higher capacity growth of 11% to 13%. While our capacity is taking a step-up in the third quarter and full-year, in-part due to strong operational performance. It is primarily driven by Alaska's gauge and stage growth as we benefit from the replacement of the Airbus fleet with larger, more efficient MAX aircraft.
As a reminder, by September 30th we will have replaced all 72 Airbus aircraft at an average gauge of 150 seats with brand new MAX 9s that have 28 more seats. The benefits of up-gauging are clear in our June results as gauge has grown 7% year-over-year, yet our load factor was only down four-tenths of a point year-over-year from what was the highest load factor ever flown in our history. At a system level, we have restored ASMs in the second-half of the year to approximately 103% of 2019, but there are still areas within our network, including Portland and California that are not fully restored.
The West Coast is still the least recovered geography across the industry and we are focused on restoring our pre-pandemic network, especially where we have opportunities to provide feed for international partners. In a period of historically high-demand and yields, the right economic decision has been to fly and maximize ASMs within our fleet and crew capabilities. That said, if we identify pockets of relative softening, we will adjust as-needed to deploy our capacity thoughtfully.
While the industry continues to normalize and work towards a new, more predictable environment, we have confidence in our commercial plan. With business travel still below historical levels and the West Coast lease recovered, we believe there is more upside to come as we head towards 2024. We are focused on pursuing and implementing our longer-term strategic drivers of profitable growth, specifically our partnership in Oneworld and the West Coast international alliance, our premium products and our loyalty program. Our value proposition is significant, our initiative is tangible and our product well-suited to travel needs post pandemic, positioning us well to continue to serve guests and build on our strong results going forward.
And with that, I'll pass it over to Shane.
