Alaska Air posts $147 million quarterly loss as fuel costs weigh
Key Facts
Alaska Air Group reported a net loss under generally accepted accounting principles of $147 million in the third quarter of 2026, according to its quarterly earnings statement. The loss per share was $1.32, as higher fuel expenses changed the group's outlook for the year. Excluding the tax impact, the group posted adjusted net income of $49 million for the period. The company said the tax impact resulted from a revision to its estimated annual effective tax rate after fuel costs shifted its full-year outlook from a pretax profit to a loss. The revision reflects changes in the annual profitability estimates the group uses to calculate taxes in its quarterly results.
In the corresponding period of 2025, the group posted adjusted net income of $123 million, according to its filing with the U.S. Securities and Exchange Commission. Adjusted earnings per share were $1.05 at the time, according to the filing covering that year's third-quarter results. In the third quarter of 2026, the adjusted pretax margin was 1.1%, according to the current earnings statement. Unit revenue, which measures revenue per available seat mile, rose 11.7% year on year, according to the company's financial tables. Meanwhile, unit costs excluding fuel, freight and special items increased 4.4% over the same period.
The actual economic fuel cost in the third quarter was $3.94 per gallon, according to the group's financial results statement. The company's full-year 2026 outlook includes fuel expenses exceeding its plan by $1.8 billion. For the final quarter alone, the group expects its fuel bill to exceed the original plan by about $650 million, according to its statement. Alaska Air said its outlook for that quarter points to an adjusted loss per share of between $2.00 and $2.50. The forecast for a final-quarter loss follows a rise in fuel costs that shifted the group's full-year estimates to a pretax loss.
On passenger revenue, the group said yield per mile rose about 17% year on year in September 2026. Premium revenue accounted for more than 36% of the total during the third quarter, according to operating details in the company's statement. In the first nine months of the year, operations generated cash flow of $755 million, according to the reported results. The group's available liquidity stood at $3.3 billion when the results were announced, according to the same statement. That liquidity includes cash and securities, along with undrawn credit facilities available to the group.
On international partnerships, Alaska Airlines and American Airlines plan to submit applications in the coming months for Alaska to join the transatlantic and transpacific joint businesses. The airlines said in their joint announcement that the process includes "applying for approval and antitrust immunity from the U.S. Department of Transportation." They are also seeking the necessary international approvals as part of the process of joining the two joint businesses. The transpacific joint business includes American Airlines and Japan Airlines, according to the announcement. Alaska's planned participation in these partnerships remains subject to completion of the approval procedures the airlines intend to begin.
On the financial calendar, Alaska Air Group scheduled its third-quarter earnings conference call for Wednesday, October 21, 2026, according to its webcast announcement. On operations, Alaska Airlines and Hawaiian Airlines announced that Seattle–Osaka service will begin on May 14, 2027. Seattle–Papeete service is scheduled to begin on June 11, 2027, according to the joint network expansion announcement. The Papeete service will operate 3 flights a week at launch, according to the schedule announced by the airlines. They said all new routes are subject to government approval.