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Alaska Airlines projects softened demand impacting second-quarter revenue forecast

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Alaska Airlines projects softened demand impacting second-quarter revenue forecast
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Alaska Airlines | Official Website

Amid a backdrop of global economic uncertainty, Alaska Airlines has stated that it anticipates its second-quarter revenue could be impacted by up to six percentage points due to softening demand. Despite this, the airline has not revised its 2025 full-year guidance but expects to remain "solidly profitable" even if revenue pressures continue.

Alaska Airlines made this announcement following the release of its first-quarter results for 2025, which reported a net loss of $166 million on revenues exceeding $3 billion. The airline attributed the loss in part to recent economic volatility and has scheduled a call with analysts for further discussions.

While Alaska Airlines noted the stabilization of bookings, its guidance predicts a revenue impact of approximately six points in the second quarter due to reduced demand. The airline's adjusted earnings per share for 2025 is anticipated to range from $1.15 to $1.65. "Alaska is built for times like these with our relentless focus on safety, care, and performance," said Ben Minicucci, President & CEO of Alaska Air Group. He emphasized the company's focus on scaling, relevance, and loyalty at its hubs, and noted synergies recognized from its combination with Hawaiian Airlines.

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In its operational update, Alaska Airlines reported first-quarter revenue growth of 9.0% year-over-year, with unit revenue increasing by 5.0%. The air group's capacity expanded by 3.9% during the quarter, which was one point more than anticipated, reflecting fewer flight cancellations. Additionally, premium revenue rose by 10%, and loyalty program cash intake increased by 12% compared to the previous year.

The airline also added that it expanded its fleet by eight aircraft in the first quarter, including four 737-9s, one 787-9, one E175, and two A330-300 freighters. Other developments included $459 million in operating cash flow and the launch of new nonstop routes from the San Diego hub to Phoenix, Chicago O’Hare, and Denver.

Alaska Airlines' recent outlook aligns with similar revisions from other airlines. Many carriers, including Frontier Airlines and Delta Air Lines, have adjusted their growth expectations amid softened demand and economic uncertainty, reflecting an industry-wide trend of cautious forecast revisions.

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