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2025-09-15 20:59:39
[Surging Oil Prices Eat Away Profits, Threatening the Airline Industry] ⑴ Alaska Airlines expects third-quarter adjusted earnings per share to fall short of its previous forecast of $1 to $1.40, primarily due to a rise in fuel costs per gallon from approximately $2.45 to $2.55. Refinery outages on the US West Coast have tightened fuel supplies and increased prices, putting direct cost pressures on the airline industry. ⑵ Severe weather, air traffic control issues, and an IT outage in July have led to significant increases in operating costs such as passenger compensation and crew overtime, further squeezing airline profit margins. These costly operational disruptions pose profitability challenges across the industry. ⑶ Despite cost pressures, Alaska Airlines' revenue trends have improved, driven by strong premium demand and a rebound in corporate bookings. Unit revenue, a key measure of pricing power, is trending towards the upper end of its previous forecast, demonstrating some resilience.
