Alaska Air pulls 2026 returns forecast amid fuel costs related uncertainty

Alaska Air Group pulled its full-year gains forecast, as sky-high jet fuel costs driven by the Iran war and its chokehold on global oil supplies hammer margins and cloud the outlook into the future. This also touches on aspects of wall street.

Airlines worldwide are buckling under surging jet fuel costs after U.S.-Israeli strikes on Iran choked off the Strait of Hormuz, a vital artery for global oil shipments, delivering the industry’s most severe shock since the COVID-19 pandemic.

Prices for jet fuel, which typically accounts for a quarter of airline operating costs, have nearly doubled since the conflict began, squeezing carriers caught between soaring expenses and pre-sold tickets they cannot reprice.

Volatile fuel prices and uncertainty around the war have clouded airlines’ ability to predict future outcomes.

Alaska Air Group CEO Benito Minicucci mentioned last month the airline burns about 100 million gallons of fuel a month, meaning a $1 boost in jet fuel prices adds roughly $100 million in monthly cost.

Minicucci stated Alaska has been shifting fuel supply away from the U.S. West Coast, including tankering fuel from Singapore to Seattle, because refinery margins there have pushed jet fuel prices about 20 cents per gallon higher.

Jet fuel prices on the U.S. West Coast typically run higher than in other regions, as limited refining capacity and a lack of pipeline links to major fuel hubs leave the industry relatively isolated, with supplies tightening quickly during disruption and imports stepping in at times to fill gaps.

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