Alaska Air cuts its growth plan for the year, but earnings beat expectations

A chaotic schedule meltdown this month produced hundreds of canceled flights for Alaska Airlines, but on Thursday parent company Alaska Air Group reported better financial results for the previous three months than Wall Street anticipated.

In response to the pilot shortage that caused the cancellations, management cut its previously projected growth plans for the year but maintained its profit forecast and reiterated its longer term expansion plans.

“March results were particularly strong, marked by our highest cash sales month in history and revenues that exceeded 2019 levels for the first time since the pandemic began,” said CEO Ben Minicucci in a statement.

In the first quarter, Alaska reported a net loss of $143 million or $1.14 per share on revenue of $1.7 billion.

This compared to a Wall Street expectation of a $202 million loss or $1.60 per share with revenue just slightly lower, according to consensus estimates by S&P Capital IQ.

Adjusting the quarterly loss to include write downs of the Horizon Air Q400 turboprops that the airline has decided to phase out by the end of next year, the loss for the quarter is higher at $167 million, but still lower than the Wall Street projections.

The airline has already reduced its scheduled flying by about 2% through June.

In its forward guidance Thursday, management revised down its previous plan to increase the number of available seats this year by 1% to 3% compared to the pre-pandemic 2019 figure, and said instead that seat capacity could be down as much as 3% compared to 2019.

Yet the company said it still expects to meet its 2022 financial target, turning the losses around to project a pre-tax profit for the year of between 6% and 9%.

And Minicucci said that beyond the capacity cuts through June, the company is “working hard to get our airline back to its pre-COVID size and to return to growth from there.”

The better-than-expected results sent the stock price up more than 3% in early trading before falling back slightly.