Our 2.4% pre-tax margin in the fourth quarter continues that trend, especially considering the disproportionate impact that severe weather had on our hubs, and the Omicron-related impacts we began to face at the end of the year.
Our completion factor was extremely challenged at the end of the year, which resulted in flying approximately 1 point less than our expected capacity in the quarter and 2.5 points less than we planned to operate in December alone.
Our fourth quarter result was worse by approximately $70 million, and our pre-tax margin was reduced by 3.5 points.
Even with this outsized impact, Alaska was profitable in Q4 and strongly led the industry in pre-tax performance over the second half of 2021.
In response to the ongoing impacts of Omicron in early January, we proactively reduced our remaining Q1 scheduled client by about 10%.
We expect the bulk of the Omicron impact to be felt in the first quarter, specifically in January and February, as revenue has reduced and as unit costs are pressured, given lower ASM production and higher staffing-related costs.
First, our revenues recovered to $6.2 billion or 70% of 2019 levels, and we achieved this while flying less capacity than many of our peers, who had similar revenue-recovery results.
Second, while the full year adjusted pre-tax loss was $342 million, we recorded $282 million of adjusted pre-tax profit during the second half of the year.
Our second-half adjusted pre-tax margin was over 7%, clearly outperforming the industry, even though West Coast travel has recovered slower than much of the country.
Excluding any CARES funding, we generated more than $100 million in operating cash flow for the year, which reflects $100 million pension contribution we funded in the third quarter.
Fourth, as profits and cash flow returned to positive territory, we have essentially repaired our balance sheet.
We closed the year with a 49% debt-to-cap ratio, 12 points lower than prior year and within our target range.
For the average employee, this payout amounts to about 6.2% on top of their annual pay.
All told, I'm really pleased to report that our bonus programs will pay out $151 million to our employees for the year.
The remaining 27 Airbus A320s that are flying today, will be retired by the end of 2023, enabled by our Boeing MAX order of 93 firm and 52 options.
We announced sustainability goals, committed to net zero carbon emissions by 2040 and further embracing a sustainability mindset by linking a portion of our annual performance-based pay plan for all employees to the carbon intensity of our operations.
I expect full year capacity to be up versus 2019, between 2% and 6%, dependent on demand.
This guidance reflects first-half capacity that is flat, to slightly up and second-half capacity that could be up as much as 10% versus 2019.
Fourth quarter revenues totaled $1.9 billion and were only down 15% versus 2019, which was better than our guide.
And with flowing capacity also down 15%, our fourth quarter unit revenues were flat in 2019.
As Ben mentioned, end-of-quarter weather disruptions were significant, impacting revenue by approximately $45 million.
Even with these setbacks, our revenue recovery improved by 3 points from what we viewed was a relatively strong third quarter.
Load factors showed continued improvement throughout the quarter as well, progressing from 75% in October to 80% in November and 83% in December, signaling demand for travel continues to move in the right direction.
November revenues were down just 7% versus 2019 on 12% less capacity.
Another encouraging indicator of yields, which ended the quarter up 3% versus 2019.
The net result of all of this was posting the best unit revenue performance in the industry for the second half of 2021 is down just 0.5%.
First-class-paid load factor ended the quarter up 2 points and premium-class-paid load factor was up 8 points, both versus the fourth quarter of 2019.
Our bank card remuneration reached record levels in the fourth quarter, up 13% versus the fourth quarter of 2019.
We estimate Q1 bookings lost to this way by approximately $160 million.
As Ben mentioned, we've seen bookings start to recover from down 40% versus 2019 in the first week of January, to around 25% today.
We will fly approximately 10% to 13% below the same period in 2019.
With the lost bookings in January and February, we expect total revenues in Q1 to be down 14% to 17% from 2019 levels.
As Ben shared, we're targeting to return to pre-COVID capacity by the summer and the growth through the back half of the year for full year 2022 capacity growth of between 2% and 6%, depending on demand.
This summer, Alaska partners will have over 100 non-stop flights per week of the West Coast to Europe.
We ended the year with $3.5 billion in total liquidity, inclusive of on-hand cash and undrawn lines of credit, which is essentially unchanged from Q3 and reflects $112 million in debt repayments during the quarter.
Our Q4 cash flow from operations was $129 million, above our previous guidance, largely driven by stronger demand recovery than anticipated, given we were dealing with the now old news Delta variant, as we came into the quarter.
This year, our debt-to-cap ratio fell to 49%, 12 points below year-end 2020, placing us within our stated target range and as Ben said, essentially back to our pre-COVID balance sheet strength.
In fact, in a period marked by increasing debt across the industry, our adjusted net debt ended the year 40% lower than 2019.
The weighted average effective rate of our outstanding debt is 3.3% and our debt service is entirely manageable going forward.
Contractual debt repayments in 2022 are about $370 million with $170 million in Q1.
Rounding out the strength of our balance sheet, our pension plans ended the year at 98% funded, the highest level we've achieved since 2013.
Our strong balance sheet and ample liquidity put us in a terrific position to pay cash for the 32 737-9 aircraft deliveries we have in 2022.
By the end of 2022, I expect our total liquidity will step down to around $2.5 billion.
Turning to the P&L, our 2.4% pre-tax profit was a solid outcome, given the circumstances in the quarter.
Our non-fuel costs were $1.4 billion in the fourth quarter, inclusive of approximately $25 million of unexpected costs from the December disruption.
This was driven by approximately $18 million for overtime and wage premiums, as we worked to stabilize the operation from staffing disruptions, and $7 million incurred for passenger remuneration, EIC and other related costs.
The December event lasted an entire week, impacted both Seattle and Portland and was exacerbated by the start of a surge in Omicron-related staffing shortages.
As Andrew indicated, the revenue impact of our cancellations was $45 million.
And given the $25 million in incremental cost, this event alone raised $70 million of profit from the December month and quarter.
The combination of lower ASM production and higher costs, resulted in our CASMex being up 12% versus 2019 outside the high end of our range.
For the first quarter, Q1 CASMex is expected to be up 15% to 18% and capacity down 10% to 13% versus 2019.
7 points of this is purely driven by our late pull down of first-quarter capacity.
Absent the capacity pull down, our unit cost guide would have been up 8% to 11%.
In addition, our costs in Q1 include two items contributing another 3.5 points of pressure that are worth detailing.
First, approximately 2.5 points of our Q1 unit cost increase is related to lease return expenses for our Airbus aircraft.
I currently expect the total waste return expense to be between $200 million and $275 million in total with more than half of that being recorded this year.
So while a headwind right now, it will become a tailwind to our cost structure in the next eight quarters, which will be further helped as we replace the 150-seat Airbus with the 178-seater, cost-efficient Boeing 737-9 aircraft.
To move from 80% to 85% of pre-COVID flying to 100% and then beyond, we must staff up early, given the throughput capacity of our hiring and training infrastructure.
We expect fuel prices to be between $2.45 and $2.50 per gallon in Q1, also increased from the last quarter.
We expect full year 2022 unit costs inclusive of lease return expense, to be up 3% to 6%, and on an ex-lease return basis, to be up 1% to 3%.

Summary:
Even with this outsized impact, Alaska was profitable in Q4 and strongly led the industry in pre-tax performance over the second half of 2021.
We expect the bulk of the Omicron impact to be felt in the first quarter, specifically in January and February, as revenue has reduced and as unit costs are pressured, given lower ASM production and higher staffing-related costs.
Fourth, as profits and cash flow returned to positive territory, we have essentially repaired our balance sheet.
We will fly approximately 10% to 13% below the same period in 2019.
With the lost bookings in January and February, we expect total revenues in Q1 to be down 14% to 17% from 2019 levels.
The December event lasted an entire week, impacted both Seattle and Portland and was exacerbated by the start of a surge in Omicron-related staffing shortages.
For the first quarter, Q1 CASMex is expected to be up 15% to 18% and capacity down 10% to 13% versus 2019.
7 points of this is purely driven by our late pull down of first-quarter capacity.