Alaska Air Group has downgraded its first-quarter earnings forecast due to a spike in jet fuel prices, floods in Hawaii and reduced travel to Mexico.
The airline had previously expected to lose between 50 cents and $1.50 per share this quarter. It now expects to lose between $1.50 and $2 per share. The first quarter ends today, March 31.
The average U.S. jet fuel price has increased from $2.50 per gallon before the Iran war to $4.62 per gallon today, according to the Argus U.S. jet fuel index. Prices tend to be higher on the West Coast than the U.S. average, leaving Alaska especially exposed.
Portions of Hawaii suffered flooding this month due to back-to-back powerful storm systems, called Kona low storms. The islands are now on the road to recovery and Alaska Air Group, which includes Hawaiian Airlines, said it doesn't expect a long-term impact on bookings.
In Mexico, the Puerto Vallarta area was rocked by cartel violence on Feb. 22, in retaliation of the Mexican government's killing of Jalisco drug cartel leader Nemesio Ruben Oseguera Cervantes, known as El Mencho. The result has been a decrease in tourism.
Alaska said the overall demand picture remains strong despite increased fares. Advance bookings for May and June are up year over year, the company said.