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Alaska Air Group loses $147 million in third quarter as fuel costs climb
The Seattle-based airline group posted a $147 million third-quarter loss despite a 14% increase in revenue, citing jet fuel costs that exceeded its forecasts. It expects fuel expenses to remain elevated through the end of the year.
Alaska Air Group reported a $147 million net loss for the third quarter, reversing a $73 million profit a year earlier as jet fuel prices outpaced the company’s expectations.
The Seattle-based company said Tuesday the loss amounted to $1.32 per share. Revenue rose 14% from the same period last year to $4.3 billion, but fuel costs were $3.94 per gallon, above the $3.75 per gallon the company had anticipated.
Alaska Air Group includes Alaska Airlines, Hawaiian Airlines, regional carrier Horizon Air and ground services provider McGee Air Services. The group also reported losses in the first two quarters of this year.
Chief Executive Ben Minicucci said the company was dissatisfied with the quarter’s results and had faced a $1.8 billion fuel-cost increase this year. He said the airline would focus on factors it can control, including widening the gap between revenue per unit and costs excluding fuel.
Jet fuel prices have risen amid disruptions to crude oil shipments linked to the U.S. war with Iran. An industry index tracking spot prices in Chicago, Houston, Los Angeles and New York reached $4.76 per gallon Monday, its highest level in about three months. Alaska Air Group expects fourth-quarter fuel prices of $4.65 to $4.85 per gallon.
The company is also seeking to grow revenue from higher-priced travel. Premium offerings accounted for more than 36% of total revenue and grew about 25%, according to its earnings report. Alaska earlier this quarter introduced plans for new seats and passenger suites.
Alaska Airlines and Hawaiian Airlines also announced plans Tuesday for nonstop Seattle flights to Osaka, Japan, and Papeete, Tahiti. The expansion and premium-cabin strategy come as the airline works to offset fuel expenses that have weighed on its earnings throughout the year.