Alaska Air Group (NYSE: ALK) recently published its Q4'22 and FY22 results, which are generally positive.

Shares of the airline are up 1.21% over the past five days and even higher at a 22.96% gain over the past month. However, the company isn't looking too good over the past year, as it's currently down 4.26%.

Let's take a look at what the company announced.

Alaska Air Q4'22 earnings

• Operating revenue of $2,479 million increased from $1,889 million from the previous financial year.
• Net income of $22 million, an increase of $4 million from the previous financial year.
• Passenger revenues are up 32%, mileage plan revenues are up 22%, and cargo revenues are up 5%.

Another highlight from Alaska Air's results was its announcement that it would resume buying back shares from the market starting early this year. The company's announcement specified a range of $75 million to $100 million worth of shares. These repurchases are designed to help combat the effects of dilution and inflation for investors.

Another effort was Alaska Air's focus on deleveraging itself. The company has stayed in its plan to pay its long-term debt since 2020. Long-term debt fell from $2.672 billion in September 2020 to $1.883 billion last quarter. Total debt payments fell to $385 for FY22, and its debt-to-capitalization ratio presently stands at 49%.

What else did Alaska Air announce?

Despite paying down its debt, a sizable amount of its total current assets decreased from $3,930 million in FY22 to $3,040 million in FY21, with its cash balance shrinking from $2,646 million to $2,079 million over the same period. The reduction in cash could be seen as a positive despite still being moderately leveraged, as it has severely reduced its overall interest burden.

Looking at its balance sheet more deeply, its total current and noncurrent liabilities still increased from FY22 to FY22 despite paying down this debt. Total current liabilities grew from $3,991 million to $4,512 million, while noncurrent liabilities grew from $3,986 million to $4,070 million. 

Summarizing Alaska Air's current leverage is that its debt-to-equity (D/E) ratio stands at a healthy 0.49. This is impressive, considering that airline companies are highly capital-intensive. For example, United Airlines (NASDAQ: UAL) D/E is 4.5 at the time of writing, even at the lower scale of its peer companies. 

This, therefore, suggests significant strength in the company. It may also explain why the company plans to hire 3,500 workers in 2023 and has consistently beaten analyst estimates for eight consecutive quarters.

What's next for Alaska Air?

Alaska Air will look to upgrade its fleet of aircraft this year. Much of the aviation industry hopes to benefit from Boeing (NYSE: BA) retiring its 747 jumbo jets and upgrading them to newer, more fuel-efficient models such as the 737 MAX. 

The new 737s may help breathe new life into the margins of airlines that use them. One estimate by the company put cost savings in the ballpark of $100 million, or around 250 million pounds of jet fuel per year, assuming a fleet of 100 aircraft.

Alaska Air intends to receive these aircraft sometime between 2024 and 2027. This comes amid the company retiring its A320 Airbuses and its plans to retire its existing fleet of Q400.

Then there's the recession that everyone has discussed in the financial markets since last year. Despite the risks, some scenarios make airline stocks like Alaska Air a feasible pick during economic downturns.

The aviation industry can be a worthwhile sector to invest in during a recession because it has a relatively low correlation with other sectors. The industry is also relatively resilient in the face of macroeconomic downturns. Airlines can adjust their supply and demand to meet changing customer needs.

In addition, the aviation industry offers a variety of investment opportunities, such as buying shares in airlines, purchasing aircraft, and providing other services such as maintenance and repair.