Alaska Air Group reported a net loss for the third quarter of 2026, a result driven primarily by a $1.8 billion fuel expense headwind for the year. The carrier posted a loss per share of $1.32, while adjusted earnings per share, excluding certain tax impacts, stood at $0.36. CEO Ben Minicucci stated that the company is executing its strategy to grow premium, international, cargo, and loyalty segments despite the unsatisfactory quarterly result.
The company's GAAP pretax margin was 0.4% for the quarter, with an adjusted pretax margin of 1.1%. Revenue increased 14% year-over-year to $4.3 billion on 2.4% capacity growth. This volume expansion resulted in unit revenue growth of nearly 12%, a figure Minicucci noted was achieved despite headwinds in Hawaii and investments in strategic growth markets. September yield increased approximately 17% year-over-year, indicating improving pricing power through the end of the quarter.
Diversified revenue, which includes operating revenue outside the main cabin, now represents 54% of total revenue. Premium revenue grew approximately 25% to account for more than 36% of total revenue, while loyalty program cash remuneration rose 21% to $721 million. Managed corporate revenue increased by 30%. These figures reflect the carrier's shift toward a structurally more resilient business model as it expands its international network to nine nonstop routes from Seattle.
A significant portion of the adjusted earnings adjustment stemmed from a change in the company's annual effective tax rate. Alaska Air Group revised its full-year outlook from pretax income to a pretax loss due to elevated fuel prices. This change triggered a cumulative catch-up adjustment related to tax benefits on first-half losses, which reduced third quarter adjusted earnings per share by $0.67. Excluding this specific tax adjustment, adjusted earnings per share were $0.36.
Looking ahead to the fourth quarter, the company expects capacity to grow between 1% and 1.5% year-over-year, with the increase concentrated in international flying. Unit revenue is projected to rise in the low double digits, while non-fuel unit costs are expected to increase in the mid-single digits. Economic fuel costs are guided at $4.65 to $4.85 per gallon for the quarter, representing a $650 million increase over the initial plan.
For the full year 2026, Alaska Air Group now expects an adjusted loss per share between $5.50 and $5.00, inclusive of the $1.8 billion fuel expense above plan. The company holds $3.3 billion in available liquidity and approximately $20 billion in unencumbered assets as of September 30, 2026.
Commercial updates include the announcement of intent to join the Atlantic and Pacific Joint International Businesses with oneworld and global partners. The carrier also unveiled new premium products, including Aurora for Alaska Airlines and Leihōkū for Hawaiian Airlines, featuring lie-flat suites and enhanced dining. New nonstop service to Athens, Paris, Osaka, and Papeete is scheduled to begin in spring 2027.