By Shivansh Tiwary
April 20 (Reuters) – Alaska Air Group withdrew its full-year profit forecast on Monday after a sharp rise in jet fuel costs tied to the Iran war pressured margins and darkened the outlook for the rest of the year.
The move underscores the strain on airlines worldwide as fuel prices surge following U.S.-Israeli strikes on Iran and disruptions to traffic through the Strait of Hormuz, a vital route for global oil shipments. The shock marks the industry’s most severe cost jolt since the COVID-19 pandemic.
Alaska said it expects its second-quarter fuel bills to bloat by about $600 million, equivalent to a profit per share headwind of $3.60. Shares of the carrier were down 4% after the bell.
The airline expects to pay about $4.75 per gallon for fuel in April, with the average for the quarter expected around $4.50.
Jet fuel, which typically accounts for about a quarter of airline operating costs, has nearly doubled since the conflict began, leaving carriers to absorb sharply higher costs on tickets sold before the price spike.
Alaska Air CEO Benito Minicucci said last month the carrier has been shifting fuel supply away from the U.S. West Coast, including tankering fuel from Singapore to Seattle, because refinery margins there have pushed jet fuel prices about 20 cents per gallon higher.
Alaska had earlier forecast a profit per share of $3.50 to $6.50 for 2026.
The West Coast market is particularly vulnerable to disruptions, often forcing carriers to rely on imports to fill supply gaps.
The Seattle‑based carrier said it expects second‑quarter capacity to rise about 1% from a year earlier, nearly a percentage point below its original forecast, as it moves to rein in costs and protect pricing.
The strain is global. Airlines across Europe and Asia are also being forced to cancel flights, add fuel surcharges and ground jets as they grapple with soaring fuel costs.
Germany’s Lufthansa said last week it will imminently ground up to 27 aircraft, becoming one of the first major carriers to take such action, while Britain’s easyJet warned that bookings are lagging last year’s levels.
Alaska posted an adjusted loss of $1.68 per share for the quarter ended March 31, bigger than analysts’ expectations for a $1.35 per share loss, according to data compiled by LSEG.
It reported total operating revenue of $3.3 billion, largely in line with Wall Street expectations.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Maju Samuel)
