Published 20:41 IST, April 18th 2024
Alaska Air Group forecasts stronger earnings
Despite $162 million impact from grounding of its 737 MAX 9 aircraft, Alaska Air Group reported a smaller loss in the first quarter.
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Alaska Air forecasts: Alaska Air Group announced on Thursday a positive outlook for the current quarter, expecting earnings to exceed previous estimates due to a resurgence in demand for business travel. This forecast resulted in a rise in the company's shares, which were up approximately 5 per cent at $44.95 in morning trading.
Despite a $162 million impact from the grounding of its 737 MAX 9 aircraft for over two weeks, Alaska Air Group reported a smaller loss in the first quarter. The company, which operates the Boeing plane that experienced a mid-air cabin blowout in January, demonstrated resilience amid these challenges.
Chief Financial Officer Shane Tackett highlighted the unexpected strength in corporate travel spending, which, alongside robust leisure travel demand, has contributed to the airline's positive outlook. The broader recovery in corporate travel across the industry has been viewed as a significant revenue driver.
Alaska Air Group revised its full-year earnings outlook to a range of $3.25 to $5.25 per share, up from the previous estimate of $3 to $5 per share. However, Tackett also expressed concerns about higher fuel costs, indicating that the company would reassess its hedging programme's viability.
The airline reported an adjusted loss of 92 cents per share for the March quarter, surpassing analysts' average estimates for a $1.05 loss. Without the impact of the MAX-9 grounding, Alaska Air Group would have reported a profit of 3 cents per share for the quarter, traditionally its weakest.
Looking ahead, Alaska Air Group expects a second-quarter profit of $2.20 to $2.40 per share, exceeding Wall Street's estimates of $2.12. The company remains focused on ensuring the safety and quality of its fleet, with increased vigilance at Boeing's factories to uphold stringent standards.
(with Reuters inputs)
Updated 20:41 IST, April 18th 2024