Earnings
Alaska Air forecasts a fourth-quarter loss about twice as deep as analysts expected as fuel costs climb
The carrier swung to a $147 million third-quarter net loss despite 14% revenue growth, and now sees a full-year adjusted loss of up to $5.50 a share.
HedgeWeekly News Desk ·
Alaska Air Group expects an adjusted loss of $2.00 to $2.50 a share in the fourth quarter, the company said on October 20. Analysts had on average forecast a loss of $1.04 a share, according to LSEG data cited by Reuters, putting the midpoint of Alaska's range at roughly double the consensus figure.
Third-quarter revenue rose 14% from a year earlier to $4.31 billion, and unit revenue climbed 11.7% on capacity growth of 2.4%. The airline still posted a GAAP net loss of $147 million, or $1.32 a share, against a $73 million profit a year earlier. On an adjusted basis it lost $0.31 a share, a figure that includes a $75 million tax catch-up charge booked because Alaska now expects a pretax loss for the year.
Fuel drove the swing. Alaska paid $3.94 a gallon in the quarter, 57% more than a year earlier, and its fuel bill rose 60% to $1.21 billion. It assumes $4.65 to $4.85 a gallon for the fourth quarter, about $650 million above its original plan, and roughly $1.8 billion of excess fuel cost for 2026 as a whole. Full-year guidance is now an adjusted loss of $5.00 to $5.50 a share.
For investors, the balance sheet is the number to watch. Adjusted net debt rose to 5.5 times EBITDAR at September 30 from 2.9 times at the end of 2025, while debt-to-capitalisation including leases climbed to 66% from 59%. Alaska still reported $3.3 billion of available liquidity and about $20 billion of unencumbered assets. The guidance contrasts with United Airlines, which on the same evening guided to a fourth-quarter adjusted profit of $0.50 to $1.50 a share, underlining how much harder high jet fuel prices are hitting carriers with less premium and international revenue.