Alaska Air Group warns about margins realted to fuel costs

  • Investing.com
Alaska Air Group warns about margins realted to fuel costs
(Updated - September 6, 2023 8:11 AM EDT)

Alaska Air Group (ALK) provided an update for Q3, saying over the past several weeks, fuel prices have increased considerably, driving a downward revision to adjusted pre-tax margin expectations for the quarter.

The company now expect economic fuel cost per gallon to be approximately $3.15 to $3.25 and adjusted pre-tax margin to be 10% to 12% for Q3 2023.

Meanwhile, the company operation continues to perform at an exceptionally high level and throughout peak summer flying our completion rate reached record levels during July and August. We also executed a market wage rate adjustment for our pilots, effective September 1, 2023 as part of the agreement originally reached in October 2022. Inclusive of this impact, the company is revising CASMex guide to the better end of its range, which they now expect to be down 1% to 2% for Q3 2023.

Regarding revenue, close-in booking strength continued through August, however, the tragic fires that occurred on Maui have resulted in cancellations to the island as the community works to recover. Given these offsetting impacts, the company is tightening its revenue guide to up 1% to 2%, with the midpoint unchanged from the original guidance.

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