Alaska Air Faces Turbulence with Q3 Miss, Guidance Cut on Weak Demand and Rising Costs
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Alaska Air Group missed Q3 earnings estimates, with lower than expected revenues and core EPS. Revenues were impacted by $20M reduction and weaker corporate travel recovery.
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Alaska expects continued revenue pressure in Q4 due to higher fuel prices. 2022 earnings guidance lowered significantly from previous range.
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Challenges specific to Alaska include weak Maui demand, higher West Coast fuel prices, and upcoming labor negotiations.
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While Alaska stock is trading at a discount to 2024 projections, near-term headwinds limit upside potential. Rating downgraded to Hold.
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Key headwinds for Alaska include misplaced capacity deployment, rising costs, and slower post-pandemic travel demand recovery. 2022 will likely be a challenging year.