Alaska Airlines to cut capacity due to ‘volatile’ fuel prices

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Alaska Airlines’ parent company has cut the carrier’s capacity outlook for the first half of 2022 due to ‘fuel price volatility’ following the conflict in Europe and the ongoing invasion of Ukraine. by Russia,” according to a filing Tuesday with the U.S. Securities and Exchange Commission.

Alaska Air Group’s filing indicated that first-half capacity would decline 3% to 5% from the first half of 2019. In its January earnings call, the company expected first-half capacity semester to be flat or slightly up from 2019 levels. He also had forecast fuel costs to be between $2.45 and $2.50 per gallon, but now expects first-half costs to quarter are between $2.60 and $2.65 per gallon.

Still, the company said it plans to return to 100% pre-Covid-19 capacity by summer, followed by growth in the second half, which is in line with what it had. scheduled for January. It will also “continue to adjust capacity as necessary in response to the changing fuel environment.”

The other major carriers did not immediately disclose changes to capacity plans. A Delta Air Lines spokesperson told BTN that the company plans to discuss fuel and capacity issues on March 15 at the JP Morgan Industrials conference. American Airlines and United Airlines, which did not immediately respond to requests for comment, also plan to present at the event.

Southwest Airlines would not discuss potential schedule changes, but said it had fuel hedges in place to help smooth out fluctuations in the energy market. It’s currently about 64% covered for 2022, 37% for 2023 and 17% for 2024, according to a company spokesperson.

“The current energy price environment is exactly why we have a systematic hedging program – to provide short-term insurance, particularly over the period of our published schedule,” he said. .

[Update, March 9, 3:50pm EST] An American Airlines spokesperson told BTN that the carrier is “monitoring the situation closely” but has not yet made any changes.

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