Alaska Airlines has exceeded expectations in its 2024 forecast, despite facing losses from the grounding of Boeing Max planes. The airline reported a first-quarter loss due to a midair blowout of a door plug on a nearly new Boeing 737 Max 9 in January. However, strong travel demand has contributed to the airline’s positive outlook for the second quarter and full year.
Alaska Airlines has forecasted adjusted earnings per share of between $2.20 and $2.40 for the second quarter, surpassing analysts’ expectations of $2.12. For the full year, the carrier expects earnings ranging from $3.25 to $5.25 per share, well above the average estimate of $4.36. This optimistic forecast has resulted in a more than 3% increase in the company’s shares during premarket trading.
It is not just Alaska Airlines that is experiencing positive travel demand projections for 2024. Delta and United have also made similar forecasts, indicating a promising future for the airline industry.
Despite the setbacks caused by the grounding of Boeing Max planes, Alaska Airlines received $162 million in compensation from Boeing for the accident that occurred on January 5th. The incident led to a brief grounding of the planes by the Federal Aviation Administration. The airline expects further compensation from the manufacturer.
In terms of financial performance, Alaska Airlines reported a net loss of $132 million, or $1.05 per share, for the first quarter. This is a slight decrease compared to the previous year’s loss of $142 million, or $1.11 per share. However, the airline’s revenue for the first quarter reached $2.2 billion, slightly above analysts’ estimated $2.19 billion and 2% higher than the previous year.
After adjusting for one-time items, Alaska Airlines posted a net loss of 62 cents per share, which is lower than analysts’ expectations of a $1.05 per-share loss.
The positive outlook for Alaska Airlines, driven by strong travel demand, showcases the resilience of the airline industry despite the challenges faced by individual carriers. The compensation received from Boeing for the grounding of their Max planes has also provided some financial relief for the airline. With Delta and United also reporting positive travel demand forecasts, it appears that the industry as a whole is on track for a successful year in 2024.
Despite the losses incurred in the first quarter, Alaska Airlines has demonstrated its ability to adapt and recover. By surpassing earnings expectations and reporting higher revenue, the airline is well-positioned to capitalize on the growing travel demand in the coming months. As passengers regain confidence in air travel, Alaska Airlines is poised to benefit from this upward trend.
In conclusion, Alaska Airlines has exceeded expectations in its 2024 forecast despite facing losses from the grounding of Boeing Max planes. Strong travel demand has contributed to the airline’s positive outlook for the second quarter and full year. With compensation received from Boeing and a resilient financial performance, Alaska Airlines is well-positioned to capitalize on the recovering airline industry.
