Alaska Airlines announced second-quarter and full-year earnings projections that exceeded expectations on Thursday, with company executives expressing optimism about a robust peak travel season. This comes despite a first-quarter setback due to a midair incident involving a door plug on a nearly new Boeing 737 Max 9 in January.
Following the January 5 accident, which led to a brief grounding of the planes by the Federal Aviation Administration, Alaska received $162 million from Boeing. The airline anticipates further compensation from the manufacturer.
During the first quarter, the Seattle-based carrier reported a loss of $132 million, or $1.05 per share, compared to a net loss of $142 million, or $1.11 per share, in the previous year.
The incident prompted increased regulatory scrutiny of Boeing and slowed down the delivery of new Max planes, of which Alaska is a major customer. Alaska’s CEO, Ben Minicucci, expressed confidence in Boeing during Thursday’s earnings call but acknowledged expectations of Boeing falling short on its airplane delivery plan to the carrier this year.
Minicucci mentioned feeling “encouraged” after Boeing’s leadership visited Alaska’s offices in Seattle to outline the manufacturer’s quality improvement plan.
Boeing’s safety crisis has drawn criticism from lawmakers and its customers, leading to the announcement of CEO Dave Calhoun stepping down by the end of the year as part of a broader restructuring at the company.
Alaska, like other airlines, has faced schedule disruptions due to Boeing’s quality issues. Despite these challenges, the airline aims to maintain its high level of service and reliability for its customers.
Alaska’s forecasted adjusted earnings per share for 2024 range from $2.20 to $2.40, surpassing analysts’ expectations of $2.12. For the full year, earnings are projected to be between $3.25 and $5.25 per share, well above the average estimate of $4.36.
Following the announcement, Alaska’s shares rose by 4% to close at $44.44 on Thursday.
Other major airlines, including Delta and United, have also predicted strong travel demand for 2024, anticipating positive results for the spring and summer seasons.
In the first quarter, Alaska reported revenue of $2.2 billion, slightly exceeding analysts’ estimated $2.19 billion. Adjusting for one-time items, the airline posted a second-quarter net loss of 62 cents per share, lower than the expected $1.05 per share loss.
