Alaska Air sees Q1 adjusted EPS (55c)-(45c), consensus ($1.18)

Sees Q1 ASMs down ~2.5% y/y. Sees Q1 economic fuel cost per gallon ~$3.10. In a regulatory filing, the company stated, “Following the challenges we faced with Flight 1282 and the Boeing 737-9 MAX grounding in January and early February, we have returned our fleet safely to service and restored our schedule. Air Group’s first quarter 2024 performance is now on track to exceed the expectations we held coming into the year. Those expectations for improved Q1 results were driven by strategic network adjustments implemented by our commercial teams, and further supported by strong demand in the quarter. Absent the grounding, we were scheduled to fly capacity up low single digits versus prior year and had line of sight to year-over-year improvement in profit of over 30%. Given recent strength in demand through Spring Break travel periods and continued recovery of West Coast business travel, we now expect an even greater year-over-year improvement in Q1 2024 profitability. As a result of Flight 1282 and the Boeing 737-9 MAX grounding, our profitability was negatively impacted by at least $150 million. To date, we have received partial compensation from Boeing, which will be accounted for in earnings in Q1. Our adjusted loss per share expectation reflects this compensation, and approximately ($0.30) remaining impact from the grounding. Full year capacity expectations are still in flux due to uncertainty around the timing of aircraft deliveries as a result of increased Federal Aviation Administration and Department of Justice scrutiny on Boeing and its operations.”