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Alaska Air Earnings Plunge on IT Glitch, Shutdown
4 Dec
Summary
- Alaska Air Group forecasts significantly lower earnings per share.
- An IT outage and government shutdown severely impacted operations.
- Higher fuel costs and tax rates also contributed to the earnings drop.
Alaska Air Group Inc. has revised its earnings per share forecast for the year's final quarter downward to a mere 10 cents. This significant reduction from the previously anticipated 40 cents per share highlights substantial operational and financial challenges faced by the carrier. The primary drivers behind this revised outlook include a crippling IT outage and disruptions stemming from flight restrictions during the government shutdown.
The IT system failure reportedly upended the airline's network, leading to widespread operational difficulties and impacting its ability to maintain its schedule. Simultaneously, government shutdown-related flight restrictions further constrained its operational capacity, contributing to the financial strain. These events combined created a turbulent environment for the airline's performance.
Beyond the immediate operational disruptions, Alaska Air also pointed to escalating fuel costs and an elevated tax rate as contributing factors to the lowered earnings guidance. These combined pressures underscore a challenging financial period for the airline as it navigates external disruptions and rising operational expenses.
