Alaska Air profit misses after IT outage halted flying

Alaska Air Group Inc. expects its earnings for the final months of the year to come in below its previous estimates after reporting third-quarter results that missed Wall Street expectations.

The Seattle-based parent of now-merged Alaska Airlines and Hawaiian Airlines said third-quarter profit was hurt by a summer IT outage that temporarily halted flying and by bad weather, stunting its ability to cash in on rebounding demand.

A fresh IT outage again disrupted Alaska operations on Thursday, forcing the carrier to keep planes on the ground nationwide, the company said.

It reported earnings of $1.05 a share on an adjusted diluted basis, below the $1.09 expected on average by analysts polled by Bloomberg.

Shares in Alaska fell nearly 3% in postmarket trading. The stock is down 28% for the year through Thursday’s close.

Consumer confidence has bounced back after a tariff-driven slump and demand for holiday travel is looking strong, Alaska finance executive Ryan St. John said in an interview.

However, an extended US government shutdown poses a risk for some of the carrier’s operations, echoing concerns at other airlines including Southwest Airlines Co., as do volatile fuel costs.

“People wanting to fly — and the willingness to pay to go fly around the holidays — I don’t think a government shutdown is going to change that type of dynamic,” St. John said. “It’s more about just being able to operate more than anything.”

The carrier revised up its 2025 estimate for revenue per seat flown a mile to a growth in the low single digits. Previously, the company estimated a range from flat to low single-digit growth.

Non-fuel costs on a seat-mile basis rose 8.6% from a year ago because of elevated recovery costs from a data center outage that hobbled operations in July.

Alaska forecast adjusted earnings per share of at least 40 cents in the fourth quarter and $2.40 for the full year — both below analysts’ expectations. Previously, it saw full-year EPS of more than $3.25.

Growing preference for premium products continues to outpace the basic economy fares, it said. Revenue from premium fares, which accounts for about 35% of overall revenue, grew 5% in the quarter from a year ago.

Alaska said an uptick in business travel continued throughout the summer. Both Delta Airlines Inc. and United Airlines Holdings Inc. also signalled business travel trending positive as corporate confidence rebuilds.

Investors will be eager for the airline’s commentary on its operations and demand when the company hosts an earnings conference call on Friday.

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