Alaska Air Group reports third quarter 2026 results
ALASKA AIR GROUP, INC. (ALK) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 October 20, 2026 Media contact: Investor/analyst contact: Media Relations Ryan St. John newsroom@alaskaair.com VP Finance, Planning and Investor Relations ALKInvestorRelations@alaskaair.com Alaska Air Group reports third quarter 2026 results Reported loss per share o
How this was made
The 30-second read
Why it matters
The earnings miss and revised outlook are expected to weigh on the stock, with potential spill‑over effects on other U.S. carriers facing similar cost pressures.
Market read
The filing provides fresh guidance that could trigger short‑term downside for ALK and may influence sentiment across the airline industry.
What to watch
New premium products and international route expansion may provide longer‑term revenue upside not reflected in the immediate earnings reaction.
Alaska Air Group reports third quarter 2026 results: GAAP loss per share of ($1.32) and adjusted earnings per share, excluding certain tax impacts, of $0.36.
Revenue and unit revenue increased strongly, but elevated fuel expense, higher operating costs and a cumulative tax adjustment resulted in a GAAP net loss and a full-year adjusted loss outlook.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total operating revenue, three months ended September 30, 2026GAAP | $4.31B | – | 14 % |
| Passenger revenue, three months ended September 30, 2026GAAP | $3.88B | – | 13 % |
| Loyalty program other revenue, three months ended September 30, 2026GAAP | $263M | – | 32 % |
| Cargo and other revenue, three months ended September 30, 2026GAAP | $160M | – | 13 % |
| Total operating expenses, three months ended September 30, 2026GAAP | $4.23B | – | 17 % |
| Wages and benefits, three months ended September 30, 2026GAAP | $1.29B | – | 5 % |
| Variable incentive pay, three months ended September 30, 2026GAAP | $68M | – | (4 %) |
| Aircraft fuel, three months ended September 30, 2026GAAP | $1.21B | – | 60 % |
| Aircraft maintenance, three months ended September 30, 2026GAAP | $257M | – | 8 % |
| Aircraft rent, three months ended September 30, 2026GAAP | $66M | – | 3 % |
| Landing fees and other rentals, three months ended September 30, 2026GAAP | $333M | – | 9 % |
| Contracted services, three months ended September 30, 2026GAAP | $163M | – | 8 % |
| Selling expenses, three months ended September 30, 2026GAAP | $118M | – | 10 % |
| Depreciation and amortization, three months ended September 30, 2026GAAP | $216M | – | 6 % |
| Food and beverage service, three months ended September 30, 2026GAAP | $110M | – | 10 % |
| Third-party regional carrier expense, three months ended September 30, 2026GAAP | $71M | – | (1 %) |
| Other operating expense, three months ended September 30, 2026GAAP | $298M | – | 16 % |
| Special items - operating, three months ended September 30, 2026GAAP | $25M | – | (61 %) |
| Operating income, three months ended September 30, 2026GAAP | $82M | – | (45 %) |
| Total non-operating expense, three months ended September 30, 2026GAAP | ($64) million | – | 73 % |
| Income before income tax, three months ended September 30, 2026GAAP | $18M | – | – |
| Income tax expense, three months ended September 30, 2026GAAP | $165M | – | – |
| Net loss, three months ended September 30, 2026GAAP | ($147) million | – | – |
| Basic earnings (loss) per share, three months ended September 30, 2026GAAP | ($1.32) | – | – |
| Diluted earnings (loss) per share, three months ended September 30, 2026GAAP | ($1.32) | – | – |
| GAAP pretax margin, three months ended September 30, 2026GAAP | 0.4 % | – | – |
| Adjusted pretax margin, three months ended September 30, 2026non-GAAP | 1.1 % | – | – |
| Adjusted net loss, three months ended September 30, 2026non-GAAP | ($35) million | – | – |
| Adjusted earnings (loss) per share, three months ended September 30, 2026non-GAAP | ($0.31) | – | – |
| Adjusted net income excluding certain tax impacts, three months ended September 30, 2026non-GAAP | $40M | – | – |
| Adjusted earnings per share excluding certain tax impacts, three months ended September 30, 2026non-GAAP | $0.36 | – | – |
| Total operating revenue, nine months ended September 30, 2026GAAP | $11.67B | – | 10 % |
| Operating loss, nine months ended September 30, 2026GAAP | ($365) million | – | NM |
| Net loss, nine months ended September 30, 2026GAAP | ($416) million | – | – |
| Diluted earnings (loss) per share, nine months ended September 30, 2026GAAP | ($3.70) | – | – |
| Adjusted net loss, nine months ended September 30, 2026non-GAAP | ($329) million | – | – |
| Adjusted earnings (loss) per share, nine months ended September 30, 2026non-GAAP | ($2.93) | – | – |
| CASMex, three months ended September 30, 2026non-GAAP | 11.46¢ | – | 4.4% |
| RASM, three months ended September 30, 2026other | 17.21¢ | – | 11.7% |
| PRASM, three months ended September 30, 2026other | 15.52¢ | – | 10.9% |
| Yield, three months ended September 30, 2026other | 18.73¢ | – | 13.4% |
| Load factor, three months ended September 30, 2026other | 82.8% | – | (2.0) pts |
| ASMs, three months ended September 30, 2026other | 25,031 (000,000) | – | 2.4% |
| Revenue passengers, three months ended September 30, 2026other | 15,706 (000) | – | (1.1)% |
| Fuel cost per gallon, three months ended September 30, 2026other | $3.94 | – | 57.0% |
| Fuel gallons, three months ended September 30, 2026other | 308 (000,000) | – | 1.7% |
| Operating fleet, three months ended September 30, 2026other | 424 | – | 18 a/c |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Passenger revenueThird-quarter passenger revenue was reported in the condensed consolidated statements of operations. | $3.88B | – | 13 % |
| Loyalty program other revenueLoyalty program cash remuneration grew 21% to $721 million in the third quarter. | $263M | – | 32 % |
| Cargo and other revenueCargo and other revenue was reported in the condensed consolidated statements of operations. | $160M | – | 13 % |
Q4 2026 outlook
- Tax rateapproximately 20%
- NoteCapacity (ASMs) % change versus 2025: Up 1% to 1.5%
- NoteRASM % change versus 2025: Up low double-digits
- NoteCASMex % change versus 2025: Up mid single-digits
- NoteEconomic fuel cost per gallon: $4.65 to $4.85
- NoteAdjusted loss per share: ($2.50) to ($2.00)
- NoteQ4 loss per share guidance assumes non-operating expense of approximately $70 million
- NoteQ4 loss per share guidance assumes shares outstanding of approximately 112.5 million
- NoteFull year adjusted loss per share: ($5.50) to ($5.00)
- NoteFull-year outlook includes $1.8 billion in fuel expense above our plan
What drove it
- Revenue increased 14% year-over-year to $4.3 billion on 2.4% capacity growth.
- RASM increased 11.7% and yield increased 13.4% year-over-year in the third quarter.
- September yield increased approximately 17% year-over-year.
- Premium revenue grew approximately 25% and represented more than 36% of total revenue.
- Diversified revenue represented 54% of total revenue.
- Managed corporate revenue increased 30%.
- The Company expanded its Seattle international network to nine routes, with Paris, Athens, Osaka and Papeete additions.
- The Company announced its intent to join the Atlantic and Pacific Joint International Businesses with oneworld and global partners.
Concerns
- Aircraft fuel expense increased 60 % year-over-year to $1,214 million in the third quarter.
- Fuel cost per gallon increased 57.0% year-over-year to $3.94.
- The Company cited Hawaiʻi headwinds, pressure from strategic growth markets investments and rapid international expansion.
- Load factor declined (2.0) pts year-over-year to 82.8%.
- The revised annual effective tax rate caused a $75 million cumulative catch-up adjustment that reduced third-quarter adjusted earnings per share by ($0.67).
- The Company expects elevated fuel costs to remain a significant headwind to near-term profitability.
- Adjusted net debt to EBITDAR was 5.5x at September 30, 2026, compared with 2.9x at December 31, 2025.
What to watch
- Fourth-quarter capacity growth is expected to be concentrated in international flying.
- Fourth-quarter unit revenue is expected to increase in the low double digits year-over-year and improve sequentially on a gross basis.
- Fourth-quarter non-fuel unit costs are expected to increase in the mid-single digits, reflecting lower capacity growth.
- Fourth-quarter economic fuel cost guidance is $4.65 to $4.85 per gallon.
- Execution of Aurora, Leihōkū and Premium Reserve premium products.
- Atmos Rewards enhancements, including the Atmos debit card planned for early 2027.
- Launch of Seattle service to Athens, Paris, Osaka and Papeete beginning in spring 2027.
Balance sheet and cash flow
- Generated $755 million of operating cash flow during the first nine months of 2026.
- Property and equipment additions were ($965) million during the nine months ended September 30, 2026, compared with ($963) million in the prior-year period.
- Adjusted capital expenditures were $1,027 million during the nine months ended September 30, 2026, compared with $870 million in the prior-year period.
- Cash and cash equivalents were $835 million at September 30, 2026, compared with $627 million at December 31, 2025.
- Marketable securities were $1,396 million at September 30, 2026, compared with $1,496 million at December 31, 2025.
- Held $3.3 billion in available liquidity, including unrestricted cash, marketable securities, and undrawn credit facilities.
- Long-term debt and finance leases were $6,159 million at September 30, 2026, compared with $5,555 million at December 31, 2025.
- Adjusted net debt was $5,288 million at September 30, 2026, compared with $4,770 million at December 31, 2025.
- Debt-to-capitalization ratio, including leases, was 66 % at September 30, 2026, compared with 59 % at December 31, 2025.
- Adjusted net debt to EBITDAR was 5.5x for the twelve months ended September 30, 2026, compared with 2.9x for the twelve months ended December 31, 2025.
- Had approximately $20 billion of unencumbered assets at September 30, 2026, including 134 aircraft and the unencumbered portion of loyalty program assets.
Analysis
Third-quarter revenue growth was strong relative to capacity growth. Total operating revenue increased 14 % to $4,308 million while ASMs increased 2.4%, lifting RASM 11.7%. Passenger revenue increased 13 %, loyalty program other revenue increased 32 %, and cargo and other revenue increased 13 %. Yield increased 13.4% to 18.73¢, while load factor declined (2.0) pts to 82.8%.
The revenue strength did not offset cost pressure. Total operating expenses increased 17 % to $4,226 million, led by a 60 % increase in aircraft fuel expense to $1,214 million. Fuel cost per gallon rose 57.0% to $3.94. CASMex increased 4.4% to 11.46¢. GAAP operating income declined 45 % to $82 million, and GAAP pretax margin declined to 0.4 % from 2.9 %.
Tax accounting materially affected reported quarterly earnings. The Company recorded GAAP net loss of ($147) million, or ($1.32) per diluted share, and adjusted net loss of ($35) million, or ($0.31) per share. A $75 million cumulative catch-up adjustment related to tax benefits on first-half losses reduced third-quarter adjusted earnings per share by ($0.67). Excluding certain tax impacts, adjusted net income was $40 million and adjusted earnings per share was $0.36.
Commercial initiatives emphasize higher-value and diversified revenue. Premium revenue grew approximately 25% and represented more than 36% of total revenue, while diversified revenue represented 54% of total revenue. Loyalty program cash remuneration grew 21% to $721 million, and managed corporate revenue increased 30%. The Company also expanded its Seattle international network to nine routes and announced an intent to join Atlantic and Pacific Joint International Businesses with oneworld and global partners.
Liquidity included $3.3 billion of available liquidity and $755 million of operating cash flow for the first nine months of 2026. However, leverage increased, with adjusted net debt of $5,288 million and adjusted net debt to EBITDAR of 5.5x. Fourth-quarter guidance calls for capacity growth of 1% to 1.5%, low-double-digit RASM growth and mid-single-digit CASMex growth, but also assumes economic fuel cost of $4.65 to $4.85 per gallon. The full-year outlook is an adjusted loss per share of ($5.50) to ($5.00), inclusive of $1.8 billion in fuel expense above plan.
Management, verbatim
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.
Ben Minicucci, Alaska Air Group CEO
Not in the filing
stated, not guessed- Gross margin was not reported.
- Gross profit was not reported.
- Q4 2026 revenue guidance was not reported.
- Q4 2026 operating-expense guidance was not reported as a dollar amount.
- Prior-release outlook was not provided, so no comparison against prior guidance is available.
- Share repurchases and dividends during the reported period were not reported.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Alaska Air Group released its Q3 2026 results via an SEC Form 8‑K, highlighting a GAAP loss, adjusted earnings, and updated full‑year loss guidance due to high fuel expenses.
Ticker impact
Alaska Air Group filed an 8‑K reporting Q3 2026 loss per share of $1.32 and revised full‑year outlook to a loss, highlighting a $1.8 B fuel cost headwind.
likely pressure as investors price in the loss guidance and elevated fuel costs
The company disclosed a GAAP loss and updated full‑year loss guidance, which typically triggers a sell‑off in the short term.
Market effects
Airline sector may face broader pressure from rising fuel costs and weaker earnings outlooks.
U.S. airline stocks could see modest declines as investors reassess fuel‑price exposure.
Limited to carriers with similar cost structures; unlikely to affect broader indices.
Counterpoint
If fuel costs stabilize sooner than expected, the stock could rebound on the back of its expanding international network.
Key entities
- companyAlaska Air Group
U.S. airline reporting Q3 2026 results
