Alaska Air Group saw profits slide in the second quarter of 2026, but underneath those numbers, the company is continuing to gather strength, officials said Tuesday.
The corporate parent of Alaska Airlines, Hawaiian Airlines, and Horizon Air saw operating revenue shoot up from $3.7 billion to $4 billion on a year-to-year basis, but an 85% spike in fuel costs during the spring reversed that progress. Hawaiian also faced costly flight disruptions from severe storms in Hawaii in March.
Alaska Air Group finished the quarter with a net loss of $76 million, or 68 cents per share, down from a net gain of $172 million in the second quarter of 2025.
Still, the company found plenty of reasons for optimism. Demand was resilient through the second quarter, it said, and loyalty performance was robust. Premium revenue increased by 15%, while cargo revenue climbed by 21%.
On the operations side, Alaska Airlines and Hawaiian transitioned to a single passenger service system, and Alaska launched new routes to Rome, London, and Reykjavík, Iceland.
“Our second quarter results were defined by a fuel spike outside our control, but underneath it, this company is executing better than ever,” CEO Ben Minicucci said in a statement. “We led the industry in on-time performance for the first half of the year, completed the last major technical milestone of our Hawaiian integration, launched service to Europe, and returned to profitability in June.”
“Absent the fuel headwind, we would have delivered a solidly profitable quarter,” he continued. “I have never been more confident in our people, our plan, and the long-term earnings power of Alaska Air Group.”
Airlines around the world have been grappling with higher jet fuel costs as a result of the war in Iran. Prices moderated somewhat in June when a peace agreement was signed but are climbing once again now that fighting in the Persian Gulf region has resumed.
Alaska Air Group said its economic fuel cost was $4.43 per gallon, resulting in $600 million of incremental fuel cost for the quarter. In response, the company raised $1 billion in financing to bolster liquidity to the top end of its target range of 15% to 25% of trailing-12-month revenue.
“As the fuel environment stabilizes and our earnings profile improves, we expect to put excess liquidity towards paying down debt and bringing liquidity back to the midpoint of our target range,” the group said.
Alaska leaders predicted that the third quarter will bring on a “meaningful inflection in financial performance,” with unit revenue expected to improve. Fuel costs should also come down as refining margins moderate, they said.
