Alaska Airlines expects profits this spring to beat analysts' expectations, showing the airline is recovering from a near-single-plane disaster on Jan. 5 that caused Boeing to ground major aircraft models. Suggests.
A positive outlook for the SeaTac-based airline as it bounces back after regulators suspended Boeing Co.'s 737 MAX 9 fleet after a fuselage panel was blown off one plane during a Jan. 5 Alaska flight. suggests.
Boeing repaid $162 million to the state of Alaska for lost first-quarter profits related to the accident. The airline said it expected additional compensation, but did not specify the amount.
Alaska Airlines expects to receive 10 to 20 Boeing 737 MAX aircraft this year, down from the 23 originally planned, the airline said. Deliveries of Boeing's new jets have slowed this year as the company works to tighten quality controls and regulators scrutinize factories after a panel explosion in January.
Chief Financial Officer Shane Tackett said in an interview that the rebound in business travel that began in the first quarter is expected to continue through the rest of the year. Passenger traffic from technology companies has returned to about 85% of 2019 levels, and total business travel has also fully recovered.
That number is “a significant increase from last year,” Tackett said. Alaska expects production capacity to increase by 5% to 7% in the second quarter.
Federal aviation regulators grounded all MAX 9 aircraft after the January accident until inspections were completed. Most planes resumed flying in late January or early February. Alaska earlier acknowledged that some travelers chose to fly other airlines for a period of time after the incident.
National Transportation Safety Board investigators say the panel that flew off the Alaska Airlines plane likely left a Boeing factory without the four bolts needed to hold the part in place. said. No one was seriously injured in the accident. The Department of Justice is also investigating.
Alaska raised its full-year earnings forecast to $3.25 to $5.25 per share from the previous estimate of $3 to $5. The midpoint of this range is just below the $4.36 that analysts expected.
Like other airlines, Alaska expects deliveries of new Boeing aircraft to be delayed. As a result, the company now expects capital expenditures to be approximately $1.2 billion to $1.3 billion, down from a previous maximum of $1.5 billion.
The company's first-quarter adjusted loss was 92 cents per share, compared with analysts' average estimate of a loss of $1.09. The state of Alaska said the grounding of the MAX 9 reduced its revenue by 95 cents. Sales were $2.23 billion, exceeding expectations of $2.18 billion.
Alaska chose not to immediately recognize Boeing's redemption in its first quarter results, instead recording it as a reduction of aircraft assets.
The airline said in a statement Thursday that it expects adjusted second-quarter earnings to range from $2.20 to $2.40 per share on the back of a surge in travel from technology companies and increased demand for premium tickets. . This is higher than the average analyst estimate of $2.12 compiled by Bloomberg.
“Overall, the airline's performance and guidance looked very positive,” Citi analyst Stephen Trent said in a note. Earnings trends “look to remain strong heading into the second quarter and full year.”
Alaska shares rose 4% on Thursday, but are now up 7.1%, the most in more than two years. Other airline stocks also rose, with the Standard & Poor's 500 index of nine airlines up 3%.
