Alaska Air takes $193M loss as rising fuel prices crimp spring schedule

Alaska Air Group lost $193 million in the first three months of 2026 as it dealt with skyrocketing jet fuel prices due to the war in Iran.

The airline, which already raised baggage fees because of volatile fuel prices, said Monday it had proactively cut capacity in May and June, and suspended its financial guidance for the rest of the year as it expected the cost of fuel to continue to rise.

The capacity cuts affect only a small number of flights, a spokesperson said on Monday, after the company reported its financial results for January, February and March. The reductions mostly affect late-night departures in high-frequency markets, the spokesperson said.

Alaska Air - which includes Alaska Airlines, Hawaiian Airlines, regional carrier Horizon Air and ground support company McGee Air Services - originally projected a profitable year, driving earnings per share of $3.50 to $6.50 for the full year. On Monday, it said it would suspend full-year guidance until conditions stabilize."

"The range of potential financial outcomes remains wide and difficult to predict, as recent geopolitical factors have resulted in sharp and unpredictable changes in fuel prices, the company wrote in a news release.

Alaska Air Group warned in March that it would miss its original financial expectations for the first quarter this year, citing rising fuel prices, as well as unrest in Puerto Vallarta, Mexico, and severe rainstorms and flooding in Hawaiʻi.

On Monday, the company said those two markets - Hawaiʻi and Mexico - represent about 30% of the airlines' capacity.

The company's $193 million loss in the first three months of the year equates to a loss of $1.69 per share. In the same three months of 2025, Alaska Air Group lost $166 million, or $1.35 per share, as the airline navigated trade and immigration policies put in place by President Donald Trump that threatened to lower travel demand.

In the first three months of this year, jet fuel averaged $2.98 per gallon, up 14% from an average of $2.61 in the same time period in 2025.

Alaska predicted the cost would reach $4.75 per gallon in April, and average $4.50 per gallon for the second quarter. That would add an additional $600 million in expenses for the three months between April and June.

Alaska had expected a profitable second quarter, but now expects an adjusted loss per share of $1.00.

Still, the company said demand remained strong. Interest in premium seats and add-ons continued to "outperform" its expectations in the first three months of the year. Corporate travel increased 19% year-over-year, and the financial boost from its loyalty program grew 12% year-over-year.

Alaska's new international long-haul routes from Seattle to Tokyo and Seoul, launched last year, were a particular bright spot. The company said Monday both routes were profitable less than one year after launch and were 90% full.

CEO Ben Minicucci said the company remains on track with its strategic vision, called Alaska Accelerate. The plan, unveiled in December 2024, is meant to help Alaska Air Group reach $10 in earnings per share by 2027, particularly by tapping into new routes after completing its acquisition of Hawaiian Airlines. It expects to launch up to 12 nonstop global destinations with long-haul widebody aircraft from Seattle by 2030.

"Even in a volatile quarter, we're seeing clear evidence that our long-term Alaska Accelerate plan is working," Minicucci said. "I'm confident in our people, our plan and our future."

The company reported $3.3 billion in revenue for the first quarter, compared to $3.1 billion in the same three months of 2025.

Alaska's not the only airline taking drastic steps to respond to fuel volatility. Delta Air Lines, Southwest and United have all raised bag fees as the companies navigate spikes in jet fuel prices.

Delta also reduced some capacity in response to the war, CEO Ed Bastian told analysts on a call earlier this month.

"In this environment, our focus is on what we can control: running a reliable operation, taking care of our people and customers, and protecting our margins and cash flow," Bastian said. "As part of that, we are meaningfully reducing capacity … until we see the fuel situation improve."

Like Alaska, Delta said it continued to see strong demand and was optimistic that it could recover its losses from the increased fuel prices.

Delta, Sea-Tac Airport's second-highest volume airline after Alaska, reported a loss of $289 million, or $0.44 per share, in the first three months of the year. In the same time period in 2025, it reported a profit of $240 million, or $0.37 per share.

Looking to the second quarter, Delta said it expected more than $2 billion of additional fuel expenses. That estimate factors in some protections for Delta from the wider macroeconomic factors, because the airline owns a refinery in Pennsylvania, which directly supplies some of its jet fuel.

Alaska Air executives will host a call with analysts to discuss its first quarter financial results Tuesday morning.

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This story was originally published April 20, 2026 at 4:57 PM.