Alaska Airlines Returns Fleet to Service After Boeing Grounding

By Dean Seal

Alaska Air Group has returned its fleet to service and now expects to top previous first-quarter performance targets despite having to ground its Boeing planes over an in-flight incident from January.

The airline said Tuesday that it has restored its schedule and is now forecasting better first-quarter results than it did at the beginning of the year, driven by strategic network adjustments and strong demand.

The company previously warned that the Boeing fleet grounding could dent earnings by at least $150 million, offering an early hint of the fallout after a door plug blew off a Boeing-made plane on an Alaska Airlines flight in early January, prompting the mass grounding and concerns about the safety of Boeing's 737 MAX 9 planes.

Alaska said Tuesday that it has already received partial compensation from Boeing over the grounding, which will be factored into first-quarter results.

In fact, the company said it now expects a greater year-over-year improvement in profitability during the quarter than it had prior to the grounding, citing strength in demand for Spring Break travel and the continued recovery of West Coast business travel.

Alaska is targeting an adjusted loss of 45 cents to 55 cents a share for the quarter. Analysts polled by FactSet had been projecting an adjusted loss of $1.16 a share.

The company is also guiding for flying capacity to be down 2.5% during the quarter, and said its full-year capacity expectations are still in flux due to uncertainty around the timing of certain aircraft deliveries while federal regulators continue to scrutinize Boeing and its operations.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

March 12, 2024 07:02 ET (11:02 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.