Alaska Airlines seeks to take on $1B in debt amid jet fuel price spike

Alaska Airlines is looking to raise $1 billion, partly through a debt offering and partly through a new tranche to an existing loan, as the airline navigates a spike in jet fuel prices amid the Iran war.

Alaska Air Group - which includes Alaska Airlines, Hawaiian Airlines, regional carrier Horizon Air and ground support company McGee Air Services - has worked to absorb the increased costs by raising baggage fees and reducing flights. But, after executives predicted in April that the cost of fuel would continue to rise, the company announced new steps to shore up its finances this week.

On Wednesday, Alaska Air said it had launched a private debt offering of $500 million for general corporate purposes. On Thursday, the company said it expected to add $500 million to the terms of an existing loan through its subsidiary company that finances the company's mileage plan. That financing plan, which Alaska Air introduced in 2024, was already expected to total $1.5 billion.

Both funds are targeted to help Alaska Airlines, the umbrella company said in its regulatory filings. The debt securities will mature in 2031.

Alaska Air lost $193 million in the first three months of the year, significantly more than the $166 million it lost in the same time period of 2025, as it was just starting to navigate the impacts of President Donald Trump's trade and immigration policies that threatened to lower travel demand.

In the first quarter this year, the company said the loss was due to rising fuel prices, as well as unrest in Puerto Vallarta, Mexico, and severe rainstorms and flooding in Hawai'i, which reduced demand to those areas.

Jet fuel averaged $2.98 per gallon in the first quarter, a 14% increase from an average of $2.61 in the same time period in 2025, Alaska said last month.

It predicted the cost of fuel would increase to $4.50 per gallon for the second quarter this year, adding $600 million in expenses.

Alaska's not the only carrier to turn to a debt offering for some relief. JetBlue said in April it had secured $500 million, and American Airlines said it raised $1.14 billion, with some of that earmarked to cover new aircraft deliveries.

For Alaska, the increased fuel prices come during its quest to expand into an international, long-haul carrier, tapping into its recent acquisition of Hawaiian Airlines. It has so far announced five new international, long-haul routes from Seattle with plans to add seven more by 2030.

Last month, as Alaska prepared for its first nonstop flight from Seattle to Rome, CEO Ben Minicucci told reporters the fuel price spike wouldn't slow down the carrier's expansion plans.

"We will get through this financial fuel crisis," he said. "So we're not going to hold back and delay implementing our strategy for a short-term impact."

"When things get back to normal, … when normal comes, we want to be able to punch the accelerator."

Alaska Air had expected a profitable second quarter, but it now expects an adjusted loss per share of $1. With "sharp and unpredictable changes in fuel prices," the company said in April it would suspend its financial guidance for the full year "until conditions stabilize."

Alaska Air declined to comment Thursday.

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This story was originally published May 7, 2026 at 4:57 PM.