By Rajesh Kumar Singh
CHICAGO, Jan 22 (Reuters) - Alaska Airlines on Thursday forecast a wider-than-expected first-quarter loss and a full-year profit outlook below Wall Street estimates, citing seasonality,
fuel-price volatility and economic uncertainty.
The Seattle-based carrier expects annual profit per share in the range of $3.50 to $6.50, with the midpoint below analysts' average expectation of $5.54, according to data provided by LSEG. For the first quarter, Alaska expects an adjusted per share loss of 50 cents to $1.50, compared with Wall Street expectations of a 64-cent loss.
In an interview with Reuters, Alaska's Chief Financial Officer Shane Tackett said the airline is taking a more conservative approach to guidance after last year's volatility, when airlines were hit by a sharp drop in demand following sweeping U.S. tariffs and the longest U.S. federal government shutdown on record.
Those factors also weighed on the full-year forecasts of larger rivals Delta Air Lines and United Airlines, which came in below analyst estimates.
"If things look for the full year like they look today, we could achieve the high end of the range," he said. "It doesn't even need to improve from where it's at. It just needs to maintain its current momentum."
DEMAND REBOUNDS, BUT FUEL AND TIMING BITE
Tackett said Alaska is beginning to recapture demand lost during last year's abrupt booking slowdown, which he estimated erased about $500 million in expected revenue.
Demand has strengthened sharply since early January, he said, with yields above year-ago levels and corporate bookings this quarter so far up 20% year-on-year across sectors including technology, manufacturing and finance.
Loyalty revenue has also climbed, he said. Main-cabin revenue, which lagged industrywide last year, is tracking toward positive growth later this quarter, he added.
Tackett said the rebound is being driven by travelers who have the means to fly and are finally booking trips they had postponed.
Alaska's performance in the current quarter, however, will suffer because much of the first-quarter schedule was booked before demand accelerated in early January. As a result, Tackett said the airline is leaving what he estimated as $50 million to $100 million of potential revenue on the table.
"The demand wasn't as strong as we're seeing it is today a month ago when we were booking the first quarter," he said.
The company also remains particularly exposed to West Coast fuel refining margins. Tackett said a 10-cent move in fuel prices can translate into about a 75-cent swing in the carrier's annual earnings per share.
Its outlook reflects the airline's traditionally weak first quarter, now compounded by Hawaiian Airlines' similarly seasonal profile as the two carriers continue integrating their networks.
Alaska is also absorbing higher labor and real-estate costs that began last year, he said.
Its fourth-quarter earnings came in at 43 cents a share compared with 12 cents a share expected by analysts.
(Reporting by Rajesh Kumar Singh in Chicago and Shivansh Tiwary in Bengaluru; editing by Diane Craft)
