Updated April 18th, 2024 at 14:52 IST
Alaska Air beats Q1 estimates, forecasts strong Q2 on robust travel demand
Alaska Air reported a first-quarter loss of $132 million, which is smaller than the $142 million loss recorded during the same period in 2023.
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Alaska Air profit: Alaska Air Group defied expectations by reporting a narrower-than-anticipated loss for the first quarter of 2024, despite facing a major setback due to the Boeing 737 MAX grounding. The airline also provided a bullish outlook for the second quarter, citing strong travel demand.
Q1 loss lower than expected
Alaska Air reported a first-quarter loss of $132 million ($1.05 per share), which is smaller than the $142 million loss ($1.11 per share) recorded during the same period in 2023.
Impact of 737 MAX Grounding
The grounding of the 737 MAX 9 fleet for over two weeks negatively impacted Alaska Air to the tune of $162 million. Excluding this cost, the airline would have reported an adjusted profit of approximately $5 million.
Compensation from Boeing
To partially offset the grounding's financial damage, Alaska Air received $162 million in initial cash compensation from Boeing.
Strong travel demand forecast
Echoing sentiments from other airline executives, Alaska Air anticipates robust passenger demand for both domestic and international travel during the upcoming summer season.
Positive outlook for Q2
Based on the optimistic travel outlook, Alaska Air forecasts a second-quarter profit between $2.20 and $2.40 per share, exceeding analyst estimates of $2.12 per share.
Alaska Air's CEO, Ben Minicucci, attributed the positive outlook to "thoughtful capacity planning, network optimisation, and diligent cost control." The airline also stressed its efforts in ensuring aircraft quality by implementing enhanced oversight within Boeing's production facilities.
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(With Reuters inputs.)
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Published April 18th, 2024 at 14:52 IST