Alaska Air Group blamed its downbeat third-quarter earnings on jet fuel expenses.
The company reported a net loss of $147 million, a dip of $1.32 per share, for the third quarter, according to an earnings report published Tuesday. The company consists of Alaska Airlines, Hawaiian Airlines, regional carrier Horizon Air and ground support company McGee Air Services.
In the first two quarters of this year, the company also posted losses.
Comparatively, last year, the company saw third-quarter gains of $73 million, or 62 cents per share.
One upside in the latest earnings report: Revenue jumped 14% year over year to $4.3 billion.
While we’re not satisfied with this quarter’s result or the $1.8 billion fuel headwind this year, we are confident in our ability to execute on the things we can control, including increasing the spread between unit revenue and unit costs excluding fuel, CEO Ben Minicucci said in a statement Tuesday.
While the company anticipated fuel costs of $3.75 per gallon, they actually amounted to $3.94.
Average jet fuel spot prices for Chicago, Houston, Los Angeles and New York hit $4.76 per gallon Monday, according to Airlines for America, an industry group. That's the highest peak in about three months. Fuel prices have surged as the U.S. war with Iran has disrupted shipments of crude oil.
Alaska Air expects fuel costs will continue to weigh on profits in the near term and predicts fourth-quarter prices of $4.65 to $4.85 per gallon.
Earlier this quarter, the company began courting premium travelers with a new class of seats and passenger suites. It hired its first chief information technology officer, Amaresh Siva, a former executive at CVS Health and home improvement giant Lowe's.
The airline’s latest earnings show premium revenue represented over 36% of total revenue, with around 25% growth. More carriers have turned to luxury offerings on flights as a way to boost income.
On Tuesday, the company announced direct flights from Seattle to Osaka, Japan, and Papeete, Tahiti, through Alaska Airlines and Hawaiian Airlines.
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