Alaska Air Group surpassed Wall Street's profit forecasts for the fourth quarter but cautioned that the start of 2024 has been "challenging" after a door plug ripped off a Boeing-made 737 Max 9 plane on an Alaska Flight 1282 over Portland earlier this month.
The budget airline reported that, for the final three months of 2023, adjusted earnings were 30 cents per share. That exceeded the 18-cent average estimate by analysts compiled by Bloomberg. Operating revenue was $2.55 billion in the quarter, which ended days before the Max 9 jets were grounded for door plug inspections.
In a statement, Chief Executive Officer Ben Minicucci said Alaska Air is "in the midst of a challenging start to 2024." The airline expects a $150-million profit hit in 2024 from the multi-week grounding of the Max 9 jets.
Alaska and United Airlines operate 70% of the Max 9 fleet. Over the last two weeks, the groundings across multiple airlines led to thousands of canceled flights.
In an interview earlier this week, Minicucci was heard saying in a televised interview that he was "angry" and "disappointed" with quality control lapses by Boeing. He noted in the inspections, engineers discovered loose bolts on Boeing planes.
According to Bloomberg, groundings for Max 9 jets could end shortly as the Federal Aviation Administration said late Wednesday that it had approved inspection procedures.
Shares of Alaska were marginally higher in the premarket. From the Jan. 5 door plug incident, shares dropped as much as 12.3% but have recovered some losses this week.
Execs are holding a conference call at 1130 ET that could shed more light on the financial impact of the incident.
