News
Airline Industry · Earnings Guidance · Fuel Costs · Volatility
Alaska Air Group has suspended its full-year 2026 guidance, citing ongoing fuel price volatility and geopolitical factors, which have led to an estimated adjusted loss per share of ($1.00) for the second quarter.
The company stated that visibility to earnings is limited beyond the current quarter due primarily to sharp and unpredictable changes in fuel prices. For the second quarter, Alaska Air expects capacity to increase approximately 1% year-over-year, a reduction from original expectations.
Unit revenues are trending up high single digits year-over-year, with a path to increasing 10% year-over-year, despite a 2-point unit revenue headwind from storms in Hawai’i. Unit costs are projected to be approximately 1.5 points higher than the first quarter, driven by close-in capacity reductions, crew training for international widebody flying, and employee recognition expenses.
Fuel remains the largest uncertainty, with Q2 averaging approximately $4.50 per gallon, adding about $600 million in expense and an earnings per share headwind of $3.60. Despite the challenging near-term backdrop, Air Group operates from a position of strength, supported by a healthy balance sheet, strong liquidity, and approximately $20 billion in unencumbered assets.
