An Alaska Airlines Boeing 737 MAX 9 taxis at Seattle-Tacoma International Airport on March 25, 2024 in Seattle, Washington.
Stephen Brashear | Getty Images
Alaska Airlines forecast second-quarter and full-year earnings well ahead of estimates on Thursday with executives predicting a strong peak travel season, despite a first-quarter loss stemming from a midair blowout of a door plug on a nearly new Boeing 737 Max 9 in January.
Alaska received $162 million from Boeing for the Jan. 5 accident, which caused the Federal Aviation Administration to briefly ground the planes. Alaska said it expects additional compensation from the manufacturer.
The Seattle-based carrier lost $132 million, or $1.05 a share in the first quarter, down from a net loss of $142 million, or $1.11 a share a year earlier.
The accident has added additional regulator scrutiny on Boeing and slowed its deliveries of new Max planes, of which Alaska is a major customer. Alaska CEO Ben Minicucci stood by Boeing on Thursday’s earnings call but reiterated that he expects Boeing to fall short on its airplane delivery plan to the carrier this year.
“We remain committed partners but we will hold Boeing to the highest bar for quality out of the factory and to that end we have enhanced our in-person oversight of our 737 production line,” Minicucci said.
“Alaska [Airlines] needs Boeing, our industry needs Boeing and our country needs Boeing to be a leader in airplane manufacturing,” he said.
Minicucci told CNBC’s “The Exchange” on Thursday that he was “encouraged” after Boeing’s leadership visited Alaska’s offices in Seattle on Monday to outline the manufacturer’s quality improvement plan.
Boeing’s safety crisis has sparked criticism from lawmakers and its customers. Boeing’s CEO Dave Calhoun last month said he would step down by year’s end, part of a broader shakeup at the manufacturer amid frustration voiced by airline CEOs.
Airline leaders say the resulting delays from quality problems at Boeing have forced schedule changes. Minicucci said Alaska is taking the delays into account to “deliver a schedule with the high level of service and reliability that our guests expect and know from us.”
Alaska forecast adjusted earnings per share of between $2.20 and $2.40, above the $2.12 analysts polled by LSEG expected. For 2024, the carrier expects earnings ranging from $3.25 to $5.25 a share, well above the average of $4.36.
The company’s shares were up more than 5% in Thursday trading.
Delta and United have also forecast strong travel demand for 2024 will boost results this spring and summer.
Alaska reported revenue of $2.2 billion for the first quarter, slightly above the estimated $2.19 billion analysts polled by LSEG expected and 2% above last year. Adjusting for one-time items, Alaska posted a net loss of 62 cents a share in the second quarter, less than the $1.05 per-share loss analysts were expecting, according to LSEG.
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