Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Revenue | $16.3 billion | up 19.3% year-over-year |
| Adjusted EPS | loss of $0.28 per diluted share | Not stated |
| Total Unit Revenue | increased 14.5% | year-over-year |
| Fuel Expense Increase | $1.9 billion | nearly 70% higher year-over-year |
| Cargo Revenue | increased 29% | year-over-year |
Guidance and outlook
- Fourth quarter revenue is expected to grow 19.5% to 22.5% year-over-year.
- Fourth quarter CASM ex is expected to increase 2.5% to 3.5% year-over-year.
- Adjusted loss per diluted share for the fourth quarter is expected to be between $0.50 and $1.10.
- Full year adjusted loss per diluted share is expected to be between $1 and $1.60.
- Full year fuel expense is expected to be more than $7 billion higher than in 2025.
How management sounded
Balanced (+3 on our -10 to +10 scale). Management expressed confidence in their commercial initiatives and revenue growth but acknowledged the financial impact of high fuel prices and the need to decelerate capacity growth. Management sounded more upbeat than on 1% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
2027 Capacity Strategy
Asked: How will you manage the slowdown in capacity growth for 2027?
Answer: Management plans to step down aircraft utilization and adjust capacity to match demand, while being mindful of fuel prices and GDP.
International Expansion
Asked: Won't the international push, particularly in the Pacific, hurt margins?
Answer: Management noted that international unit revenue outpaced domestic in the third quarter and emphasized the strength of their joint business partners.
Yield vs. Load Factor
Asked: Why did you prioritize yield over load factor, and will this continue?
Answer: Management stated they are prioritizing yield to improve revenue quality and will continue this approach as long as it aligns with their premium strategy.
Balance Sheet
Asked: Are you considering alternative ways to repair the balance sheet given the fuel impact?
Answer: Management emphasized that the primary unlock for leverage improvement is earnings growth, not just financial transactions.
What to watch before the next call
- The impact of high fuel prices on 2027 profitability and the effectiveness of capacity deceleration.
- Progress on the wide-body aircraft order campaign, which management expects to wrap up this year.
- The integration of Alaska Airlines into the Atlantic and Pacific joint businesses.
