Alaska Air cuts profit view as rising labor costs cast shadow
(Reuters) - Alaska Air Group cut its full-year profit outlook on Thursday on rising labor expenses, as airlines draw up costly contracts to retain employees.
Major U.S. airlines are already feeling the pinch from higher fuel prices, putting a dampener on their outlooks.
Washington State-based Alaska Air said it is moderating capacity growth for the next two quarters to make it more in line with pre-pandemic levels. It expects capacity growth through February 2024 to be up less than 3% over 2019 levels.
The development comes at a time when investors fear demand may soften, particularly for domestic routes, as a depletion of pandemic savings and high interest rates have crimped consumers' tolerance for pricier airfare.
Alaska Air forecast full-year profit between $4.25 and $4.75 per share, lower than its prior expectation of $5.50 to $7.50.
The airline also trimmed its annual revenue growth forecast to between 7% and 8%, from a range of 8% to 10% expected previously.
Excluding items, Alaska Air reported quarterly profit of $1.83 per share, missing analysts' average estimate of $1.87, according to LSEG data.
It reported third-quarter revenue of $2.84 billion, below Wall Street expectations of $2.87 billion.
(Reporting by Mehr Bedi in Bengaluru; Editing by Pooja Desai)
