Alaska Air pulls 2026 profit forecast amid fuel costs related uncertainty

April 20 (Reuters) – Alaska Air Group pulled its full-year profit 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.

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 had earlier forecast a profit per share of $3.50 to $6.50 for 2026.

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

Minicucci said 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 market relatively isolated, with supplies tightening quickly during disruption and imports stepping in at times to fill gaps.

(Reporting by Shivansh Tiwary in Bengaluru; Editing by Maju Samuel)