Alaska Air Group, Inc. (ALK)

Alaska Air Group reported a third-quarter 2026 net loss of $147 million, or $1.32 per share, on 20 October 1. Revenue rose 14 percent from a year earlier to $4.3 billion on 2.4 percent more capacity 1.

The company blamed fuel and a tax catch-up 1. It said a $1.8 billion fuel bill above plan is behind a full-year adjusted loss it now guides to between $5.00 and $5.50 per share 1.

The Seattle Times reported that fuel cost $3.94 a gallon in the quarter against the $3.75 the company had planned 3. It tied the surge in fuel prices to the US war with Iran disrupting crude oil shipments 3.

Reuters reported that Alaska would cut about 200 non-contract jobs, and that its chief executive warned of a loss of as much as $700 million this year if conditions persist 4. The open question is how long fuel stays high 4.

Alaska Airlines was organized in 1932 and incorporated in 1937 in the state of Alaska 2. Horizon Air began service in 1981 and joined the group in 1986 2. Air Group acquired Virgin America in 2016 and legally merged it into Alaska in 2018 2.

By 2023 the airline group earned $235 million on $10.4 billion of revenue 2. Special items, one-off charges outside normal running costs, were $443 million that year, of which $436 million was labor and other 2.

The turning point came on 18 September 2024, when the company completed its acquisition of Hawaiian Holdings, the parent of Hawaiian Airlines 2. It paid about $936 million in cash for 52 million voting shares, and $977 million in total with change-in-control payments 2.

In December 2024 the company introduced Alaska Accelerate, a three-year plan to deliver $1 billion in incremental profit after the Hawaiian deal 13. It raised its estimate of acquisition synergies to at least $500 million by 2027 13.

Revenue in 2025 reached $14.2 billion, up from $11.7 billion, mostly because Hawaiian counted for a full year instead of from 18 September 2024 2. On a like-for-like pro forma basis, revenue grew 3 percent, and revenue per seat-mile flown rose 1.4 percent 2. Passenger revenue was $12.8 billion of the total, and loyalty program other revenue was $855 million 2.

Profit fell in 2025: net income was $100 million against $395 million a year earlier 2. Integration costs were $193 million, and two technology outages cost about $50 million in pretax earnings 2.

Integration milestones followed: the Atmos Rewards loyalty program launched in August 2025, and on 29 October 2025 the FAA gave Alaska and Hawaiian a single operating certificate 2. A June 2025 cyberattack on Hawaiian did not have a material impact, the company said 2.

Wages and benefits grew from $3.0 billion in 2023 to $4.8 billion in 2025 2. Pretax income was $146 million in 2025 against $545 million in 2024 2. Fuel was cheaper in 2025 at $2.52 a gallon, down 8.0 percent from 2024 on a pro forma basis 2.

Fuel prices then upended 2026, as Alaska reported a first-quarter net loss of $193 million and suspended its full-year guidance on 20 April 5. It expected April fuel near $4.75 a gallon, up from a first-quarter average of $2.98 65. In May it arranged $1 billion of borrowing 6.

Passenger flying

Passenger tickets are the core business: passenger revenue was 90 percent of 2025 revenue, and Alaska and Hawaiian carried 47 million passengers that year 2. Hubs are Seattle, Honolulu, Portland, Anchorage, Los Angeles, San Diego and San Francisco 2.

Delta is the largest rival, and about 78 percent of the group's Seattle capacity competes with it 2. Southwest and United are significant competitors in Hawaii and on the West Coast 2.

In 2025 the planes were 82.9 percent full, and costs excluding fuel per seat-mile flown rose 4.7 percent on a pro forma basis 2. Alaska says it won recognition in 2026 as the cleanest airline in North America from Skytrax 1.

Regional flights

Horizon Air and SkyWest fly Embraer regional jets under capacity purchase agreements, in which Alaska buys the seats and sells them 2. The regional side carried about 11 million passengers in 2025, and Horizon carried about 55 percent of them 2.

Atmos Rewards loyalty

Atmos Rewards combines Alaska's Mileage Plan and Hawaiian's HawaiianMiles 2. Loyalty revenue was about 16 percent of the group's 2025 revenue, and members redeemed for nearly eight million award tickets 2.

Bank of America issues the main co-branded cards 2. In the third quarter, loyalty program cash remuneration grew 21 percent to $721 million 1.

Cargo

Alaska has five dedicated freighters that fly mostly to and within the state of Alaska, and it carries freight in the belly of passenger planes 2. It also operates 10 Airbus A330-300F freighters for Amazon, which pays a fixed monthly fee per aircraft 2.

Cargo and other revenue was $549 million in 2025, 4 percent of the total 2.

Premium cabins

The company unveiled Aurora lie-flat suites, Leihoku suites for Hawaiian, and a premium economy cabin called Premium Reserve 81. AirlineGeeks reported 34 Aurora suites on each Boeing 787 and 12 on at least 25 737 MAX 10 jets 8.

No passenger has flown these products yet, so no hands-on reviews exist; the 737 suites follow certification of the MAX 10 98. Premium revenue grew about 25 percent in the third quarter and was more than 36 percent of the total 1.

Fleet and facilities

At the end of 2025 the group operated 413 aircraft: 324 mainline and 89 regional 2. Alaska had firm orders for 174 Boeing 737 and 12 Boeing 787 aircraft, and Boeing delays are expected 2.

The company owns terminal buildings and hangars in various Alaska cities and owns or leases buildings near Seattle-Tacoma International Airport 2. In Honolulu, most facilities are leased month to month 2.

People

Ben Minicucci is chief executive 1. Reuters put the workforce at about 32,500 employees 4.

Alaska flight attendants ratified a new three-year contract in 2025, and Horizon is still negotiating with its pilots, flight attendants and dispatchers 2. Joint contracts for Alaska and Hawaiian groups are being negotiated 2.

Current problems

Fuel is the main problem, with the company citing $1.8 billion above plan 1. Reuters reported it is cutting about 200 non-contract roles and no frontline roles 4.

In 2025 two technology outages and a government shutdown together cost about $80 million (computed) in pretax earnings 2.

The umbrella, in words

The group's brands are Alaska Airlines, Hawaiian Airlines (kept as a distinct brand), Horizon Air and the Atmos Rewards loyalty program 2. McGee Air Services is an aviation services subsidiary of Alaska 2.

Exhibit 21 lists the subsidiaries: Alaska Airlines, Horizon Air Industries, Hawaiian Holdings, which owns Hawaiian Airlines, and others including McGee Air Services and AS Mileage Plan Holdings in the Cayman Islands 10. Hawaiian Holdings is owned by the group 2.

Large holders of the common stock reported on Schedule 13G are Vanguard Capital Management with 5.08 percent as of 31 March 2026 11 and BlackRock with 8.4 percent as of 31 March 2025 12. Each is an investment manager, not a controlling owner 1112.

For the fourth quarter the company expects capacity to grow 1 percent to 1.5 percent, mostly in international flying, and unit revenue to rise in the low double digits 1. It assumes fuel at $4.65 to $4.85 a gallon, about $650 million above its first plan 1.

The company expects a full-year adjusted loss of $5.00 to $5.50 per share 1. Its chief executive said the airline could lose as much as $700 million this year if current conditions persist 4.

At its 29 September investor day the company targeted premium revenue above 40 percent of the total by 2030, up from about 35 percent 7. It also targeted at least 15 intercontinental destinations from Seattle by 2030, with Paris and Athens due in spring 2027 7.

It also set targets of $750 million in annual cargo revenue by 2030 and a fleet of 550 aircraft by 2035, up from more than 400 7. It said it has captured about two-thirds of its $1 billion profit goal and remains on track for all of it by 2027 7.

Alaska said it expects its first Boeing 737 MAX 10 in the second quarter of 2027, with Aurora suites on at least 25 of them 9. Premium Reserve is due in 2028 1.

The company set earlier targets in December 2024, including pretax margins of 11 to 13 percent and earnings per share of at least $10 by 2027 13. It said the plan was aimed at a stronger, combined airline after the Hawaiian deal 13.

Members will be able to earn Atmos Rewards points by distance, price paid or segments flown on flights from 1 January 2027, and an Atmos debit card is planned for early 2027 1. The company also announced its intent to join the Atlantic and Pacific Joint International Businesses with oneworld and global partners 1.