Alaska Air forecasts loss of up to $2.50 a share as fuel costs surge
Key Facts
Alaska Air forecast an adjusted loss of between $2 and $2.50 a share for the fourth quarter of 2026, exceeding analysts' estimates as fuel costs rise, Reuters reported. The company had scheduled the release of its results and outlook for after the market close on October 20, 2026, in an announcement covering third-quarter performance and prospects for the following period. The projected loss range compares with analysts' average estimate of $1.04 a share, according to London Stock Exchange Group data cited by Reuters. Reuters attributed the pressure on the carrier's earnings to a surge in fuel costs, which the company faces despite strong travel demand and higher ticket prices. The loss forecast thus comes as travel volumes and ticket prices support Alaska's business, while the fuel burden weighs on earnings.
Alaska's fourth-quarter outlook assumes an economic fuel cost of between $4.65 and $4.85 a gallon, according to its third-quarter earnings statement. Both ends of that range exceed the company's second-quarter cost per gallon, putting its year-end assumptions above that quarter's level. For 2026 as a whole, the company expects an adjusted loss of between $5 and $5.50 a share, according to the same statement. The annual outlook includes fuel expenses $1.8 billion above the company's plan for the year, a burden factored into its loss estimate. The guidance thus combines a higher assumed cost per gallon in the final quarter with an annual fuel bill above the planned amount, alongside projected adjusted losses for the quarter and the year.
In the third quarter, Alaska's revenue rose 14% from a year earlier to about $4.3 billion, according to the company's statement. It posted adjusted earnings of $0.36 a share after excluding certain tax effects, reporting a quarterly profit while forecasting a loss for the following quarter. The company had forecast in July that third-quarter adjusted earnings would range from breakeven to $1 a share, according to Reuters' report at the time. The midpoint of that range was 50 cents a share, compared with analysts' average forecast of $1.38 a share at the time, meaning the July guidance was also below market estimates. The latest results follow those summer forecasts, with revenue growing year on year and fuel costs continuing to affect the company's year-end earnings outlook.
Fuel pressures had become clear in the second quarter of 2026, when Alaska's economic fuel cost reached $4.43 a gallon, according to its earnings statement for that period. That represented an increase of 85% from the same period a year earlier, reflecting the scale of the rise in the company's cost per gallon. Alaska said the increase added $600 million to second-quarter fuel costs, weighing on results for the period. Chief Executive Ben Minicucci said in the earnings statement: "Without the fuel pressures, we would have delivered solid profitability during the quarter." Minicucci thus linked the company's performance that quarter specifically to the fuel burden, saying its business would have generated solid profitability in the absence of those pressures.
The company posted a second-quarter net loss of $76 million under U.S. generally accepted accounting principles, according to its reported results. The net loss per share on the same accounting basis was $0.68, during the period in which the company absorbed the sharp increase in its fuel bill. Those results followed Alaska's decision in April to withdraw its annual earnings forecast, according to Reuters' report on the company's announcement at the time. The forecast withdrawal came after higher jet fuel prices linked to the Iran war squeezed profit margins, making fuel the reason for suspending annual guidance at that point. The backdrop to the latest outlook thus extends to the April decision and second-quarter results, when fuel pressures affected both the company's financial guidance and its reported net result.
In response to the announcement withdrawing guidance on April 20, 2026, Alaska shares fell 4% in after-hours trading, Reuters reported. That move followed the April announcement tied to fuel pressures on margins, during an earlier stage of the company's review of its annual earnings prospects. The October disclosure provides new year-end forecasts, including the annual adjusted loss and fuel expenses above plan. Attention now turns to the call the company has scheduled to discuss its financial performance, according to the timing published on its investor relations page. The call is scheduled for October 21, 2026, at 11:30 a.m. Eastern Daylight Time, following the release of results and guidance scheduled for after the market close the previous day.