Alaska Air to Cut 200 Jobs as Fuel Costs Raise Risk of $700 Million Loss

SEATTLE — Alaska Air Group will eliminate approximately 200 non-contract positions as higher fuel costs pressure its finances, with CEO Ben Minicucci warning employees that the company could post a US$700 million adjusted pretax loss in 2026 if current conditions persist.

The job cuts are confirmed. The potential loss is a conditional scenario outlined in an internal memo reviewed by Reuters, rather than a reported financial result.

The reductions represent less than 1% of the group’s approximately 32,500 employees and include 125 positions in Washington and 48 in Hawaii. No frontline, non-management jobs are being eliminated.

Non-Contract Positions Affected

Affected employees will finish work on November 13, with pay continuing through December 31. Severance and other support will also be provided, according to Reuters.

Minicucci’s memo identified overhead expenses growing faster than revenue in recent years as an issue requiring action. The reporting did not identify every affected corporate function or establish how many reductions stem directly from the Hawaiian Airlines integration.

Revenue Growth Meets a Higher Fuel Bill

Alaska’s October 20 earnings release showed third-quarter revenue rising 14% to US$4.3 billion. However, the company expected full-year fuel spending to exceed its original plan by US$1.8 billion.

Its fourth-quarter forecast assumed an economic fuel cost of US$4.65 to US$4.85 per gallon, adding approximately US$650 million to the quarter’s originally planned fuel expense.

The latest EIA observation available today, October 31, is October 27, 2026, which stats that fuel cost is about US$4.44 per gallon for the U.S. Gulf Coast jet fuel spot benchmark. That equals approximately US$186.65 per barrel.

Alaska had already forecast a full-year adjusted loss of US$5.00 to US$5.50 per share. That earnings-per-share guidance is a separate measure from the conditional pretax loss described in the employee memo.

Alaska’s International Ambitions Meet the Economics of Expensive Fuel

The pressure arrives as Alaska prepares new Seattle services to Athens, Paris, Osaka and Papeete for 2027 and develops premium cabin products. Premium revenue increased approximately 25% in the third quarter, providing evidence of demand for that investment, according to Alaska’s results.

The financial challenge is whether those investments can generate sufficient returns while fuel remains well above the company’s planning assumptions. Revenue growth alone cannot establish that new routes will meet their profitability targets.

The Hawaiian integration also raises questions about potential savings from overlapping corporate functions. The available disclosures do not establish which savings these cuts will deliver or whether they will alter the pace of expansion.

For Alaska, the next test is how management translates its call for financial discipline into decisions about overhead, investment and the 2027 network.