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Alaska Air Group (NYSE:ALK) announced Wednesday that it now expects adjusted earnings per share of approximately $0.10 for the fourth quarter of 2025, down from its prior guidance of at least $0.40 per share. The company attributed the reduction to several temporary factors, according to a statement included in a regulatory filing with the Securities and Exchange Commission. This guidance cut aligns with InvestingPro data showing 12 analysts have recently revised their earnings expectations downward for the airline, which currently trades at $45.37, suggesting the stock may be slightly undervalued compared to its Fair Value.
The company cited a combination of an internal IT and cloud service provider outage, lost revenue from the government shutdown, higher fuel costs, and a higher book tax rate as the main drivers behind the lowered outlook. Alaska Air Group estimated the IT outage impacted earnings by $0.25 per share, the government shutdown by $0.15 per share, and higher fuel costs by $0.15 per share.
The government shutdown, which began in October, led to Federal Aviation Administration-mandated flight reductions and about 600 flight cancellations across Alaska Air Group, affecting approximately 40,000 passengers. The company stated that while operations normalized after the government reopened, the disruption resulted in a negative revenue trend during the period, which has not fully recovered to pre-shutdown levels.
Following the late October IT outage, Alaska Air Group engaged a third-party consultant to audit its IT infrastructure and is implementing recommendations to improve data center resiliency.
For the fourth quarter, the company expects capacity, measured in available seat miles, to increase by about 2% compared to pro forma 2024 levels. Revenue per available seat mile is projected to be up approximately 1% versus the prior year. Unit costs excluding fuel are expected to rise by about 3% year-over-year.
The updated earnings guidance assumes an average economic fuel price of $2.65 per gallon, non-operating expenses of about $50 million, and a tax rate between 40% and 50%.
Alaska Air Group’s update was disclosed in a press release statement attached to the SEC filing. The company’s common stock trades on the New York Stock Exchange under the symbol ALK.
In other recent news, Alaska Air Group announced a delay in providing its fourth-quarter guidance due to recent information technology disruptions. The company stated that the full financial impact of these disruptions is not yet known and plans to release additional information once the effects are fully assessed. Alaska Airlines also faced technical issues with its website and mobile app, following a major outage that previously grounded flights across the United States. Additionally, Alaska Airlines revealed plans to launch daily seasonal service between Seattle and Rome starting in April 2026, citing strong customer demand for the route. On the financial front, TD Cowen raised its price target for Alaska Air to $65, maintaining a Buy rating, following the company’s third-quarter 2025 results and fourth-quarter revenue guidance. In regulatory developments, Alaska Airlines achieved a single operating certificate from the Federal Aviation Administration, allowing it to operate alongside Hawaiian Airlines while maintaining their separate brand identities.
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