Alaska Air Group (ALK) Q3 2026 earnings summary

Executive summary

• Q3 GAAP net loss was $147M, or $1.32/share; adjusted net loss was $35M, or $0.31/share, including a $75M tax catch-up. Excluding that tax impact, adjusted net income was $40M, or $0.36/share.

• Revenue rose 14% YoY to $4.308B on 2.4% capacity growth; RASM increased 11.7%, while elevated fuel costs created a $1.8B full-year headwind versus plan.

• Healthy demand and strategic revenue streams supported a seven-point RASM-to-CASMex spread, up from two points in Q2; diversified revenues reached 54% of the mix.

Financial highlights

• Q3 operating income was $82M versus $148M a year earlier; operating expenses increased 17% to $4.226B, including aircraft fuel expense up 60% to $1.214B.

• Passenger revenue grew 13% to $3.885B; loyalty program other revenue rose 32% to $263M, and cargo and other revenue increased 13% to $160M.

• September yield rose ~17% YoY, following 11% growth in July; Q3 yield increased 13.4%, while passenger RASM rose 10.9%.

• Non-fuel unit costs rose 4.4% YoY on 2.4% capacity growth, improving from a 6.5% increase in Q2; average fuel price was $3.94/gallon.

• Nine-month revenue increased 10% to $11.673B; operating loss was $365M versus operating income of $228M, and net loss was $416M versus net income of $79M.

Outlook and guidance

• Q4 adjusted loss/share is forecast at ($2.50)-($2.00); FY 2026 adjusted loss/share is forecast at ($5.50)-($5.00).

• Q4 capacity growth is forecast at 1%-1.5%, concentrated in international flying; RASM growth is expected in the low double digits and non-fuel unit costs to rise mid-single digits.

• Q4 economic fuel cost is forecast at $4.65-$4.85/gallon, $650M above initial plan; FY guidance includes $1.8B of fuel expense above plan.

• Management expects at least $3-$4 of core earnings improvement next year regardless of fuel; long-term non-fuel unit-cost growth target is ~4%, with more specific guidance planned for January.

• Management expects improvement as growth annualizes and international markets mature, with opportunities beginning in 2027; Hawaii's setup is viewed more constructively for 2027.