Alaska Air raises Q3 earnings forecast amid summer travel surge

Alaska Air Group has significantly increased its adjusted earnings per share forecast for the third quarter, now estimating between $2.15 and $2.25, surpassing the previous range of $1.40 to $1.60 and the analyst consensus of $1.60. This optimistic outlook follows a strong summer travel season, where the airline operated a record schedule and achieved a remarkable 99.3% completion rate. Revenue per seat mile is expected to rise by 2%, a positive shift from earlier projections of flat growth. The surge in revenue can be attributed to heightened demand during the summer months, particularly in July, which was influenced by disruptions in the industry. The airline's performance in August and September has also contributed to this positive trend, with unit revenue showing a year-over-year increase projected for the third quarter of 2024. Additionally, Alaska Air has adjusted its expectations for economic fuel costs, now forecasting between $2.60 and $2.70 per gallon, down from the previous estimate of $2.85 to $2.95. This reduction is linked to moderating crude oil prices and refining margins on the West Coast, which could further enhance profitability. Despite these positive developments, Alaska Air's stock has seen a decline of over 1% in the past year. The airline's proactive measures and strong operational performance during the summer travel surge indicate a potential recovery and growth trajectory moving forward.