By Rajesh Kumar Singh
CHICAGO, Oct 30 (Reuters) - Alaska Air Group said on Friday it would eliminate about 200 non-contract positions as soaring fuel prices and geopolitical challenges squeeze its finances, with its chief executive warning of a potential $700 million annual loss.
The cuts suggest the Iran war-linked fuel-price shock, which has already prompted US airlines to raise fares and scale back flight growth, is now affecting airline jobs.
They also highlight mounting financial pressure on Alaska Air as it pursues an ambitious expansion into premium and international travel, with strong revenue growth struggling to offset rising fuel costs.
Chief Executive Ben Minicucci told employees in a memo seen by Reuters that the company could lose as much as $700 million this year if current conditions persist, marking its first adjusted pretax loss outside the pandemic since 2003.
"We must return to the financial discipline that has long been a key competitive advantage," Minicucci said, adding that overhead expenses had "grown at a disproportionate rate to revenue" over the past few years.
The reductions affect less than 1% of Alaska's roughly 32,500 employees, a company spokesperson said. They include 125 positions in Washington state and 48 in Hawaii.
No frontline, non-management jobs are being eliminated. Affected employees will have their last working day on November 13 but will continue receiving pay through December 31, along with severance and other support, according to the memo.
FUEL COSTS OVERSHADOW REVENUE GAINS
US airfares rose an average of nearly 23% year-on-year in the seven months through September, according to Labor Department data, but Delta Air Lines, American Airlines and Southwest Airlines have still cut their 2026 earnings forecasts.
Alaska Air last week forecast a full-year adjusted loss of $5 to $5.50 per share, citing $1.8 billion in additional fuel costs compared with its original annual plan.
The carrier expects fourth-quarter fuel costs of $4.65 to $4.85 per gallon, nearly double the $2.50 assumed in its initial 2026 plan.
It reported a 14% year-on-year increase in third-quarter revenue, but its adjusted pretax margin declined to 1.1% from 4.6% a year earlier.
The Seattle-based carrier is investing in premium cabins, loyalty programs and international routes following its acquisition of Hawaiian Airlines, and plans to expand its long-haul network from Seattle.
Minicucci said Alaska would continue investing in its fleet, customer experience and network even as it tightened spending.
(Reporting by Rajesh Kumar Singh; Editing by Edmund Klamann and Tom Hogue)
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