Alaska Air Group, Inc. (ALK) is taking flight on Thursday, with its shares trading significantly higher in the pre-market session. The airline has made a bold move, significantly raising its adjusted earnings per share forecast for the entire third quarter. The company now projects a range of $2.15 to $2.25, surpassing both the analyst consensus estimate of $1.60 and its earlier range of $1.40 to $1.60. This positive outlook was revealed in an exchange filing.
The announcement is driven by strong summer travel demand. Alaska Air Group experienced a record schedule and achieved a remarkable 99.3% completion rate quarter-to-date. The airline’s revenue performance has exceeded expectations, particularly in July, which saw a surge in travel fueled by CrowdStrike Holdings disruptions across the industry. This momentum carried into August and September.
The airline’s revenue available per seat mile for the third quarter is expected to be up 2%, compared to the previous outlook of flat to positive. This positive trend in unit revenue, driven by a robust travel season, has led Alaska Air Group to project a 2% year-over-year increase in total unit revenue for the third quarter of 2024.
Additionally, the company has lowered its economic fuel cost expectations for the quarter, citing moderating crude oil and West Coast refining margins. The new range for fuel costs is $2.60 to $2.70 per gallon, down from the previous estimate of $2.85 to $2.95.
ALK stock has experienced a slight decline of over 1% in the past year. Investors interested in gaining exposure to the stock can consider the Renaissance IPO ETF (IPO) and ARK Fintech Innovation ETF (ARKF).
As of Thursday’s pre-market trading, ALK shares are up by 4.33% to $41.20. This surge in share price reflects investor optimism about Alaska Air Group’s strong performance and positive outlook.
