(Reuters) – Alaska Air Group forecast a better-than-expected profit for the current quarter on Thursday, driven by strong travel demand and expectations for a strong summer season.
The airline, the operator of the Boeing plane that suffered a mid-air cabin blowout in January, also reported a smaller loss in the first quarter, despite a $162 million impact from the more-than-two-week grounding of its 737 MAX 9 aircraft.
Its loss shrank to $132 million, or $1.05 per share, in the first quarter, from a loss of $142 million, or $1.11 per share, a year ago. Its operating revenue rose 1.6% to $2.23 billion.
The Seattle, Washington-based airline would have reported an adjusted profit of about $5 million for the quarter, absent the groundings of its MAX 9 jets.
To address the financial damages, Alaska Air received $162 million in initial cash compensation from Boeing, which has been excluded from its first-quarter results.
Many airline executives have highlighted robust travel demand across both domestic and international routes during the upcoming summer season.
Alaska Air forecast a second-quarter profit of $2.20 to $2.40 per share, compared with analysts’ average estimate of $2.12 per share, according to LSEG data.
“Thanks to thoughtful capacity planning, network optimization, and diligent cost control, we are well positioned to carry our strong performance into the second quarter and beyond,” CEO Ben Minicucci said.
The airline also said it has enhanced quality oversight at Boeing’s production facility to validate the work and quality of its aircraft as they progress through the manufacturing process.
(Reporting by Shivansh Tiwary in Bengaluru; Editing by Savio D’Souza)
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