Alaska Air Group Reports Second-Quarter Loss but Expects Stronger Third-Quarter Results
SEATTLE — Alaska Air Group posted a loss for the second quarter of 2026, primarily due to sharply higher fuel prices. Despite the setback, the airline says business trends are improving, with stronger revenue momentum and expectations for a return to healthier financial performance in the third quarter.
The airline, which trades on the New York Stock Exchange under the ticker ALK, released its financial results for the quarter ended June 30, 2026, on July 21.
Quarterly Financial Results
During the second quarter, Alaska Air Group reported:
GAAP pretax margin: -5.3%
GAAP net loss: $76 million, or $0.68 per diluted share
Adjusted pretax margin: -4.3%
Adjusted net loss: $102 million, or $0.92 per diluted share
While the company remained in the red, executives emphasized that the underlying business continues to improve and that operational performance remained strong throughout the quarter.
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CEO Highlights Operational Progress
President and CEO Ben Minicucci said the company's results were largely impacted by the unexpected surge in fuel costs rather than weakness in customer demand.
According to Minicucci, Alaska Air Group achieved several important milestones during the quarter, including:
Leading the U.S. airline industry in on-time arrivals during the first half of 2026.
Completing the final major technology milestone in the integration of Hawaiian Airlines.
Launching new nonstop routes between Seattle and several European destinations.
Returning to monthly profitability during June.
He added that without the significant increase in fuel expenses, the airline would have reported a profitable quarter.
Revenue Climbs 10%
Despite the quarterly loss, Alaska Air Group generated $4.1 billion in revenue, representing a 10% increase compared with the same period last year.
Additional operating highlights included:
Capacity growth of 1%.
Unit revenue increasing 8.6% year over year.
Double-digit unit revenue growth during June.
Double-digit pretax profit margins achieved in June alone.
The company said customer demand remained healthy across most of its network.
Hawaii Weather Reduced Revenue
One factor that negatively affected results was severe rainfall across Hawaii during March.
According to the airline, the storms disrupted spring break travel in April and reduced system-wide unit revenue by approximately three percentage points, slightly worse than its original estimate of two points.
Outside Hawaii, however, travel demand remained resilient.
Premium and Cargo Business Continue Growing
Several business segments delivered strong year-over-year growth during the quarter.
Highlights included:
Premium ticket revenue increased 15%.
Cargo revenue rose 21%.
Managed corporate travel revenue jumped 30%.
Loyalty program cash revenue improved 19%.
These gains helped offset part of the pressure created by higher operating expenses.
Operating Costs and Fuel Prices
Excluding fuel, unit operating costs increased 6.5% from a year earlier while capacity expanded only 1%.
Management noted that several temporary factors contributed to the increase, including:
A one-time employee recognition payment tied to completing a unified passenger service system.
Lower gains from aircraft sales compared with last year.
Additional crew training expenses supporting future international expansion.
Fuel remained the biggest challenge.
The airline's average economic fuel cost reached $4.43 per gallon, an 85% increase compared with the second quarter of 2025.
That increase added roughly $600 million in fuel expenses during the quarter.
Strengthening the Balance Sheet
To maintain financial flexibility, Alaska Air Group raised $1 billion in financing during the quarter.
As of June 30, 2026, the airline reported:
$3.8 billion in available liquidity.
Approximately $20 billion in unencumbered assets.
Those assets include 131 aircraft as well as a significant portion of the company's loyalty program assets.
Third-Quarter Outlook
Looking ahead, Alaska Air Group expects conditions to improve.
The airline forecasts:
Capacity growth of 2% to 3% year over year.
Nearly all growth coming from long-haul international flights departing Seattle.
North American capacity remaining largely unchanged.
Low double-digit unit revenue growth compared with the third quarter of last year.
Non-fuel unit costs increasing only in the low-to-mid single-digit range.
Fuel Outlook
The company's guidance assumes an average economic fuel price of approximately $3.75 per gallon during the third quarter.
That estimate is based on:
July fuel costs averaging $3.60 per gallon.
Expected August and September spot prices averaging $3.85 per gallon.
Based on these assumptions, Alaska Air Group expects adjusted earnings per share to range between $0.00 and $1.00 for the third quarter.
Network Expansion Continues
Alongside its financial update, Alaska Air Group announced continued investments in its fleet and route network.
Recent developments include:
New nonstop service from Seattle to Rome, London, and Reykjavik.
Delivery of six Boeing 737-8 aircraft.
Delivery of two Embraer E175 regional jets.
Addition of another E175 operated through partner airline SkyWest.
The company also signed an agreement to add four Boeing 737-800 freighter aircraft to its cargo fleet, with deliveries expected during the first half of 2027.
In addition, Alaska completed cabin upgrades across its Boeing 737 fleet and announced several new domestic routes, including expanded service from Santa Rosa, the return of Seattle–Long Beach flights, new Honolulu routes to Burbank, Spokane, and Boise, and additional flights between Honolulu and Las Vegas.
Outlook
Although rising fuel prices weighed heavily on second-quarter earnings, Alaska Air Group believes improving travel demand, expanding international service, disciplined cost management, and ongoing investments in its network position the airline for stronger financial performance during the remainder of 2026.