Fuel costs are weighing on Alaska Air Group’s 2026 outlook as the carrier plans to eliminate about 200 jobs among employees whose positions are not covered by contracts.
In announcing the cuts Oct. 30, Alaska cited difficulty forecasting fuel bills and wider geopolitical conditions. The company did not name the Iran conflict as a specific reason.
Alaska's public forecast for 2026 calls for an adjusted loss of $5 to $5.50 per share and puts fuel expense $1.8 billion above plan. For the fourth quarter of 2026, the company assumed economic fuel costs of $4.65 to $4.85 per gallon, $650 million above its initial plan.
Reuters reported that CEO Ben Minicucci told employees in a memo Alaska could post an adjusted pretax loss of as much as $700 million in 2026 if conditions persist. Reuters said the memo described overhead costs as having grown disproportionately to revenue in recent years. The news agency said a loss at that level would be the company's first outside the pandemic period since 2003.
Alaska reported a $147 million net loss and $4.3 billion in revenue for the quarter ended Sept. 30, 2026. Revenue rose 14% from a year earlier. EconoTimes previously covered Alaska's third-quarter loss and 2026 outlook.
Alaska said fourth-quarter travel demand remained healthy and forecast capacity growth of about 1% to 1.5% from a year earlier. The California Energy Commission (CEC) says the Iran conflict has constrained shipping through the Strait of Hormuz, reducing the oil and refined products available to international markets. Alaska's announcement referred to geopolitical conditions but did not specifically cite the conflict.
Reuters reported affected employees were scheduled to finish work Nov. 13, 2026, with pay continuing through Dec. 31 and severance and other support.
