Alaska Air Group on Monday updated its outlook for the first quarter, projecting a deeper adjusted loss as elevated fuel costs and softer demand in portions of its route network weigh on results. The company attributed the jump in fuel prices to the Iran war and warned the higher costs will materially affect earnings.
Benchmark Brent crude has surged roughly 58% this month, a rise the carrier noted is the steepest monthly increase in LSEG records dating back to 1988 and larger than gains recorded during the 1990 Gulf War. Alaska Air said it now expects economic fuel prices to average between $2.9 and $3.00 per gallon, an increase management said will create an "incremental" hit to earnings per share of at least $0.7.
Management characterized the recent oil-price spike as a potential first full financial stress test for U.S. airlines since the pandemic, observing that weaker carriers are more likely to respond by shrinking capacity, taking on additional debt or absorbing deeper losses, while stronger competitors may continue to invest and expand market share.
Reflecting these pressures, Alaska Air revised its adjusted first-quarter loss estimate to a range of $1.50 to $2.00 per share, up from a prior projection of $0.50 to $1.50 per share. Shares of the company were trading down 1.1% in premarket activity following the update.
Alongside fuel headwinds, the airline said demand that had been robust since late 2025 has recently softened due to external events in key markets. The company pointed to reduced Mexico travel related to unrest in Puerto Vallarta and the impact of a severe rainstorm and flooding in Hawaii - two issues it said together represent roughly 30% of its capacity. Alaska Air indicated these effects have been felt in both March and April, including during the peak West Coast Spring Break travel periods.
Despite those regional disruptions, the carrier reported that corporate demand remains a bright spot, with forward bookings for the next 90 days more than 25% higher year-over-year. Alaska Air said it is well-positioned for peak travel intervals as it heads into its seasonally strongest quarter.
The company’s revised guidance and the broader oil-price environment underscore mounting near-term pressures on operating results for airlines, even as some demand channels hold up better than others.