Alaska Air Group reports third quarter 2026 results

Summary

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Reported loss per share of ($1.32), and adjusted earnings per share, excluding impact of revised tax rate, of $0.36

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Announced intent to join the Atlantic and Pacific Joint International Businesses with oneworld and global partners

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New service to Osaka and Papeete expands Seattle’s nonstop international network to 9 of 15 planned routes by 2030

Alaska Air Group (NYSE: ALK) today reported financial results for the third quarter ending September 30, 2026.

At Investor Day, we laid out a clear strategy for building a stronger, more diversified business, and we’re executing it: growing premium, international, cargo and Atmos Rewards, and investing in the guest experience. Those are the things that earn guest loyalty, diversify our revenue and ultimately drive stronger earnings. 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.“

Ben Minicucci

CEO , Alaska Air Group

Quarter in review

Air Group reported third quarter Generally Accepted Accounting Principles (GAAP) pretax margin of 0.4% and GAAP net loss of ($147) million, or ($1.32) per share. Air Group’s third quarter adjusted pretax margin was 1.1% and adjusted net loss was ($35) million, or ($0.31) per share. Excluding certain tax impacts, Air Group’s third quarter adjusted net income was $49 million, or $0.36 per share.

(a) These results reflect a Q3 adjusted effective tax rate of 18.4%, or adjusted tax expense of $9 million, versus our original guidance assumption of approximately 35% due to the AETR revision discussed below.

Third quarter results were driven by strong underlying commercial momentum despite a significant fuel headwind. Revenue increased 14% year-over-year to $4.3 billion on 2.4% capacity growth, resulting in unit revenue growth of nearly 12%, despite Hawaiʻi headwinds, pressure from strategic growth markets investments, and rapid international expansion. Yield improved through the quarter, with September yield increasing approximately 17% year-over-year.

Air Group’s diversified revenue, which represents operating revenue outside the main cabin, has grown to 54% of total revenue, reflecting progress against our strategic initiatives as we shift towards a more structurally resilient business. Premium revenue grew approximately 25% and represented more than 36% of total revenue, loyalty program cash remuneration grew 21% to $721 million, and managed corporate revenue increased 30%. Air Group continued to expand its international network, with the additions of Paris, Athens, Osaka, and Papeete, bringing our Seattle international network to nine routes.

During the third quarter, the Company reduced its estimated annual effective tax rate (AETR) following a change in its full-year outlook from pretax income to a pretax loss, driven primarily by elevated fuel prices. As a result, the Company recorded a cumulative catch-up adjustment related to tax benefits recognized on first-half losses, which reduced third quarter adjusted earnings per share by ($0.67). Excluding this adjustment, third quarter adjusted earnings per share were $0.36.

Fourth quarter forecast information

Looking ahead, demand remains healthy, with commercial momentum continuing into the fourth quarter. Air Group expects capacity to grow approximately 1% to 1.5% year-over-year, with the increase concentrated in international flying. Unit revenue is expected to increase in the low double digits year-over-year and improve sequentially on a gross basis, supported by continued yield strength. Non-fuel unit costs are expected to increase in the mid-single digits, reflecting lower capacity growth.

Elevated fuel costs are expected to remain a significant headwind to near-term profitability, with our guidance assuming a fourth quarter economic fuel cost of $4.65 to $4.85 per gallon, or $650 million higher than our initial plan. For the full year, we now expect an adjusted loss per share between ($5.50) and ($5.00), inclusive of $1.8 billion in fuel expense above our plan.

(a) Q4 loss per share guidance assumes non-operating expense of approximately $70 million, a tax rate of approximately 20%, and shares outstanding of approximately 112.5 million.

Commercial updates

Announced intent to join the Atlantic and Pacific Joint International Businesses with oneworld and global partners, broadening international connectivity for guests and increasing access to premium worldwide travel opportunities.

Unveiled Aurora and Leihōkū by Alaska and Hawaiian, new premium guest experiences designed to elevate travel, featuring spacious lie flat suites, access to exclusive check-in and concierge services, and elevated dining options. Aurora will be featured on Alaska’s Boeing 787 fleet and select transcontinental routes operated by new 737-10 MAX aircraft, while Leihōkū will be featured on Hawaiian’s A330 fleet.

Introduced Premium Reserve, a new premium economy product set to debut in 2028 on Alaska’s 787-9, 787-10 and select 737-10 MAX aircraft and on Hawaiian’s A330 fleet, offering guests enhanced comfort, space, and choice on longer flights.

Loyalty updates

Loyalty program cash remuneration grew 21% to $721 million in the third quarter.

Beginning in October, Atmos Rewards members can choose how they earn points and status points – by distance traveled, price paid, or segments flown – on flights departing on or after January 1, 2027.

Announced enhancements to Atmos Rewards, including expanded card offerings with the launch of an Atmos debit card in early 2027, four new Atmos communities, and additional program partnerships.

Launched new and improved benefits for Huakaʻi by Hawaiian members, including two free checked bags for Neighbor Island travel and additional ways to earn Atmos Rewards points.

Network updates

Announced new nonstop service from Seattle to Athens, Paris, Osaka, and Papeete beginning in spring 2027, further strengthening our position as Seattle’s largest international carrier.

Announced domestic route expansions, including new routes from Portland to Steamboat Springs, San Diego to Loreto, Mexico and Paine Field to San Jose, alongside increased service from Paine Field to Portland, San Diego and Los Angeles.

Liquidity updates

Generated $755 million of operating cash flow during the first nine months of 2026.

Held $3.3 billion in available liquidity, including unrestricted cash, marketable securities, and undrawn credit facilities.

Had approximately $20 billion of unencumbered assets at September 30, 2026, including 134 aircraft and the unencumbered portion of our loyalty program assets.

Other highlights

Amaresh Siva named Alaska’s Chief Information Technology Officer, joining the company from CVS Health. Siva will serve on the company’s Executive Committee.

Alaska Airlines and Hawaiian Airlines were recognized with the 2026 APEX Five Star Major Airline Award.

Alaska Airlines recognized by the Skytrax World Airline Awards as the #1 Cleanest Airline in North America and the #2 Best Regional Airline in North America.

SVP of Merchandising and Innovation Charu Jain was recognized as one of Time’s 2026 Tech and Data Executives of the Year.

View full financial data

References in this update to “Air Group,” “Company,” “we,” “us,” and “our” refer to Alaska Air Group, Inc. and its subsidiaries, unless otherwise specified.

This news release may contain forward-looking statements subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and the Private Securities Litigation Reform Act of 1995. These statements relate to future events and involve known and unknown risks and uncertainties that may cause actual outcomes to be materially different from those indicated by our forward-looking statements, assumptions or beliefs. For a discussion of risks and uncertainties that may cause our forward-looking statements to differ materially, see Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. Some of these risks include competition, labor costs, relations and availability, general economic conditions, increases in operating costs including fuel, uncertainties regarding the ability to successfully integrate operations following the acquisition of Hawaiian Holdings, Inc. and the ability to realize anticipated cost savings, synergies, or growth from the acquisition, inability to meet cost reduction and other strategic goals, seasonal fluctuations in demand and financial results, supply chain risks, events that negatively impact aviation safety and security, cybersecurity risks, and changes in laws and regulations that impact our business. All of the forward-looking statements are qualified in their entirety by reference to the risk factors discussed in our most recent Form 10-K and in our subsequent SEC filings. We operate in a continually changing business environment, and new risk factors emerge from time to time. Management cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on our business or events described in any forward-looking statements. We expressly disclaim any obligation to publicly update or revise any forward-looking statements made today to conform them to actual results. Over time, our actual results, performance or achievements may differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, assumptions or beliefs and such differences might be significant and materially adverse.

Alaska Airlines, Hawaiian Airlines and Horizon Air are subsidiaries of Alaska Air Group, and McGee Air Services is a subsidiary of Alaska Airlines. We are a global airline with hubs in Seattle, Honolulu, Portland, Anchorage, Los Angeles, San Diego and San Francisco. We deliver remarkable care as we fly our guests to more than 140 destinations throughout North America, Latin America, Asia, the Pacific and Europe. Guests can book travel at alaskaair.com and hawaiianairlines.com. Alaska and Hawaiian are members of the oneworld alliance. Members of our Atmos Rewards loyalty program can earn and redeem points with oneworld airlines and our additional global partners that serve over 1,100 worldwide destinations. Learn more about what’s happening at Alaska and Hawaiian at news.alaskaair.com. Alaska Air Group is traded on the New York Stock Exchange (NYSE) as “ALK.”

About Alaska, Hawaiian and Horizon

Alaska Airlines, Hawaiian Airlines and Horizon Air are subsidiaries of Alaska Air Group, and McGee Air Services is a subsidiary of Alaska Airlines. We are a global airline with hubs in Seattle, Honolulu, Portland, Anchorage, Los Angeles, San Diego and San Francisco. We deliver remarkable care as we fly our guests to more than 140 destinations throughout North America, Latin America, Asia, the Pacific and Europe. Guests can book travel at alaskaair.com and hawaiianair.com. Alaska and Hawaiian are members of the oneworld© alliance. Members of our Atmos™ Rewards loyalty program can earn and redeem points with oneworld airlines and our additional global partners that serve over 1,100 worldwide destinations. Learn more about what’s happening at Alaska and Hawaiian at news.alaskaair.com. Alaska Air Group is traded on the New York Stock Exchange (NYSE) as “ALK.”