Alaska Air swung to a loss on surging fuel costs but expects a summer rebound

Economic fuel costs hit $4.43 per gallon in the second quarter, up 85% year over year, adding $600 million in incremental expense

By Cris Tolomia2 min readUpdated July 22, 2026

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Alaska Air Group swung to a second-quarter net loss of $76 million, or 68 cents per share, compared with year-ago earnings of $172 million, or $1.42 per share, for the period ending June 30. The Seattle-based airline blamed a spike in jet fuel costs driven by the war in Iran, which constrained fuel supplies, according to The Wall Street Journal.

Jet fuel averaged $4.43 per gallon during the quarter, an 85% increase from a year earlier that translated into approximately $600 million in additional fuel expense. On an adjusted basis, Alaska posted a loss of $102 million, or 92 cents per share. Total operating revenue rose 10% to $4.07 billion, with unit revenue up 8.6%.

"Our second-quarter results were defined by a fuel spike outside our control — but underneath it, this company is executing better than ever," Chief Executive Officer Ben Minicucci said in a statement. "Absent the fuel headwind, we would have delivered a solidly profitable quarter."

Looking to the third quarter, Alaska guided for adjusted earnings ranging from breakeven to $1.00 per share. The company forecast capacity growth of 2% to 3% and unit revenue growth in the low double digits year over year. It assumed a fuel price of $3.75 per gallon for the quarter, reflecting July fuel costs of $3.60 per gallon. That guidance fell well short of the $1.47 per share in adjusted third-quarter profit that analysts surveyed by FactSet had anticipated, according to The Journal.

Alaska also raised $1 billion in financing during the quarter — $500 million in senior unsecured notes and $500 million in term loans secured by assets tied to its Atmos loyalty program — bringing total available liquidity to $3.8 billion.

The airline's Hawaii operations continued to weigh on results. Historic rainstorms in March depressed spring break travel and reduced system unit revenue by approximately 3 points in the quarter. Hawaii is expected to remain a 2-to-3 point unit revenue headwind in the third quarter, though the company said new bookings are coming in at system-level yields in September.

Alaska suspended its full-year 2026 earnings guidance in April after posting a first-quarter net loss of $193 million, citing fuel price uncertainty stemming from the U.S.-Iran conflict. At that time, the company forecast an adjusted second-quarter loss of about $1.00 per share and estimated the fuel price spike would translate to roughly $3.60 per share in earnings impact.

Alaska Air stock fell 2.1% in after-hours trading on Tuesday.

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