Alaska Air Group NYSE: ALK reported a first-quarter 2026 GAAP net loss of $193 million, as a sharp rise in fuel prices and operational disruptions in key leisure markets weighed on results, even as the company pointed to resilient demand, improving premium and loyalty performance, and continued progress on its “Alaska Accelerate” strategy.
Vice President of Finance, Planning, and Investor Relations Ryan St. John said the company posted an adjusted net loss of $192 million, excluding special items. Executives repeatedly emphasized that fuel volatility—driven by geopolitical events—was the dominant factor pressuring near-term earnings.
Fuel volatility drives near-term pressure
President and CEO Benito Minicucci said fuel costs were “more than $100 million higher in the first quarter,” and the company expects “incremental fuel costs of $600 million or more in the second quarter,” which he said represented “approximately a $0.70 impact to earnings per share in Q1 and over $3 in Q2.”
EVP and CFO Shane Tackett said the company’s first-quarter adjusted loss per share was $1.68, coming in “better than the midpoint of our revised guidance,” but he noted fuel alone accounted for roughly $0.70 of incremental EPS pressure versus the original plan. Tackett said the company’s first-quarter fuel price averaged $2.98 per gallon, but fuel markets became increasingly volatile, with refining margins spiking and driving up costs on some supply sources.
For the second quarter, Tackett said recent fuel price moves have been extreme, ranging “as high as $5.15 per gallon and as low as $4.45” in the prior week. The company expects to pay about $4.75 per gallon in April and estimated a quarterly average of $4.50 per gallon based on the forward curve. “As of today, we are recovering approximately one-third of incremental fuel costs,” he added.
Given the uncertainty, Tackett said Alaska Air is “suspending our full year guide until conditions stabilize and we have better line of sight to earnings beyond the current quarter.” He said the company’s assumptions for the second quarter lead to “an EPS estimate of a loss of approximately $1 per share,” adding that without the fuel spike the company would have expected to guide to a “solidly profitable quarter.”
Revenue up, but Hawaii and Puerto Vallarta disruptions weigh on unit revenue
EVP and Chief Commercial Officer Andrew Harrison said first-quarter revenue rose to $3.3 billion, up 5% year-over-year on capacity growth of 1.7%. Unit revenues increased 3.5%, which Harrison said was in line with initial expectations, though results were pressured by events in Hawaii and Puerto Vallarta—together about 30% of system capacity.
Harrison said “once-in-a-generation” storms in Hawaii—where rainfall reached “as much as 3,000% of normal historical levels during March”—drove cancellations and short-term “book away.” In Puerto Vallarta, the company saw a “meaningful impact on demand” due to civil unrest ahead of spring break. He said the two regions reduced first-quarter unit revenues by “nearly one point,” with effects extending into April and May.
In response, Alaska reduced Puerto Vallarta flying by “approximately 30% in the second quarter,” while maintaining Hawaii capacity because the weather disruption was viewed as temporary. Harrison said bookings in Hawaii had returned to last year’s level in recent days on “strong fare increases.”
Looking to the second quarter, Harrison said the company trimmed “nearly a point of capacity in May and June,” including reductions in Mexico and some late-night departures. Alaska now expects second-quarter capacity to rise about 1% year-over-year, with international growth out of Seattle offset by slightly lower North America capacity.
Premium, corporate, and international routes show strength
Harrison said performance outside disrupted regions showed broad-based strength, highlighted by premium and corporate demand. Premium demand was up 8% year-over-year, and with “over 90%” of premium retrofits complete, the company expects to sell “all 1.3 million incremental premium seats” ahead of peak summer.
International expansion out of Seattle was another focal point. Harrison said Seattle-to-Tokyo reached profitability in March, “less than a year after its launch,” and load factors for Tokyo and Seoul exceeded 90%. The company plans to launch Rome next week, followed by London and Reykjavík later in the spring. Minicucci called the Europe entry “a major milestone” as Alaska aims to become “the fourth global carrier in the United States.”
Corporate travel was also cited as a bright spot. Harrison said managed corporate travel rose 19% in the first quarter, and held revenue over the next 90 days was up “almost 30%.” He attributed the strength to increased network relevance, particularly from long-haul connectivity, and said growth was broad-based across industries including manufacturing, financial services, and technology.
Loyalty and partnerships: Bank of America extension and Amazon update
Executives repeatedly pointed to loyalty as a key earnings driver under Alaska Accelerate. Harrison said the company generated $615 million of co-brand card revenue in the first quarter, up 12% year-over-year, while active Atmos membership grew 13%.
Harrison also highlighted loyalty momentum in Hawaii, saying more than 70% of Hawaii’s adult resident population is enrolled in Atmos Rewards and that Hawaii-based cardholder spend increased 19% year-over-year. He added that Hawaii-based card spend “now accounts for nearly 6% of the state’s GDP.”
The company announced a long-term extension of its relationship with Bank of America, including moving to a single issuer of Atmos-branded co-brand products. Harrison said the agreement secures an additional $1 billion of total cash remuneration through 2030 and provides improved economics and increased marketing investment. Minicucci said the deal would “in 2027… add a point of margin.” Tackett later quantified the impact as “roughly 0.5 point of margin this year and 1 point of margin next year,” before any additional portfolio growth.
Minicucci also said the company reached an updated agreement with Amazon that “eliminates losses under the legacy Hawaiian terms,” and said the two sides are continuing discussions to deepen the partnership. COO Jason Berry added that Alaska moved to a single cargo system at the start of the year, which he said is beginning to unlock cargo connectivity benefits.
Integration milestone and balance sheet position
Minicucci said the company completed preparations for a single passenger service system (PSS) cutover, calling it the “final major guest-facing milestone” of the integration. He said the move would eliminate “the friction of a dual environment” and support the combined network and guest experience. During Q&A, Harrison said only a small number of passenger name records needed to be ported, adding that check-ins were already proceeding smoothly on several flights.
The company also said Hawaiian Airlines officially joined Oneworld, which Minicucci said expands benefits for guests and extends Alaska’s global reach.
On financial positioning, Tackett said Alaska ended the quarter with about $2.9 billion of liquidity and $20 billion of unencumbered assets. Net leverage was 3.3 times and the debt-to-capital ratio was 61%. The company repaid $340 million of debt during the quarter and expects to repay another $65 million in the second quarter.
Alaska accelerated share repurchases amid a March and April share-price dislocation, bringing year-to-date repurchases to $250 million, which Tackett said should more than offset dilution this year. However, he said the company will pause further repurchases despite having $180 million remaining under its $1 billion authorization, citing the need to evaluate the outlook.
Despite near-term volatility, Minicucci reiterated confidence in Alaska Accelerate and the company’s long-term earnings goals, saying the challenges “do not change our longer-term trajectory” and that the company remains committed to its “$10 EPS target,” while acknowledging uncertainty around the timing given the current environment.
About Alaska Air Group NYSE: ALK
Alaska Air Group is a publicly traded holding company headquartered in Seattle, Washington, that operates two main airlines—Alaska Airlines and Horizon Air. Through these carriers, the company offers scheduled passenger and cargo services across a network spanning the United States, Canada and Mexico. Its core business activities include domestic and international air transportation, loyalty program management under the Mileage Plan brand, and ancillary revenue streams such as baggage fees, in-flight sales and code-share partnerships with other global airlines.
The roots of Alaska Air Group trace back to the foundation of its flagship carrier, Alaska Airlines, in 1932.
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