Alaska Air (NYSE:ALK) cautioned on Monday that its third-quarter adjusted profit will likely come in at the lower end of its previously forecast range of $1.00 to $1.40 per share, citing elevated fuel costs and ongoing operational headwinds during the busy summer season.
In a filing, the airline explained that refining margins on the U.S. West Coast have “remained high” due to continued refinery disruptions. As a result, it now expects its economic fuel price to average between $2.50 and $2.55 per gallon, up from an earlier estimate of about $2.45.
“Irregular operations — including weather and air traffic control issues — led to increased costs from overtime, premium pay and passenger compensation,” the carrier noted.
The company also pointed to a July IT outage that disrupted hundreds of flights and stranded thousands of travelers at the height of the summer rush. Alaska Air estimates the incident will trim roughly $0.10 from per-share earnings, with the financial impact falling more heavily “toward cost than revenue as originally contemplated.”
Despite these pressures, the airline said demand trends remain robust. Unit revenue, a key gauge of pricing strength, is running “near the high end” of guidance for flat to low-single-digit growth. Strong appetite for premium seats and a double-digit recovery in corporate bookings since the second quarter helped yields turn positive year-over-year in August.
In premarket trading, Alaska Air shares were down 0.9%.
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