US-Iran war: Alaska Air Group to cut around 200 jobs; CEO expects annual loss of $700 million amid rising fuel costs
Washington-headquartered Alaska Air Group on Friday (local time) announced it would eliminate roughly 200 non-contract positions as the company's finances face a pinch amid soaring fuel prices and geopolitical challenges.
Additionally, the company's CEO warned of a potential annual loss of about $700 million, Reuters reported, indicating that the effect of soaring prices and geopolitical challenges is now extending beyond higher fares and reduced flight schedules, thereby threatening jobs in the aviation sector.
In a memo seen by Reuters, Alaska Air Group CEO Ben Minicucci told employees the company could lose about $700 million this year if conditions persist, marking its first adjusted pretax loss since 2003, excluding the pandemic years.
Minicucci said, "We must return to the financial discipline that has long been a key competitive advantage," and added that the company's overhead expenses had grown at a disproportionate rate to revenue in the last few years.
The latest job-cut announcement also highlights mounting pressure on Alaska’s push into premium and international travel, as rising fuel costs weigh on earnings despite strong revenue growth.
A company spokesperson said fewer than one per cent of the company’s 32,500 employees would be affected, with 125 positions being cut in Washington and 48 in Hawaii. No frontline or non-management roles are being eliminated.
Affected employees will finish work on 13 November but will continue to receive their salaries until 31 December, along with severance and other support.
However, Alaska Air Group is not the only US airline that has been struggling to offset soaring fuel costs.
Reuters reported last week that the United States' airlines face continued pressure in the year’s final quarter, as strong passenger demand and steep fare increases fail to fully cover rising fuel bills. According to third-quarter results from most of the US carriers, steady demand for air travel has allowed companies to increase ticket prices and generate record revenue. However, the surge in jet fuel prices has added further pressure to the airlines' margins, prompting them to take a more cautious view on profit and capacity growth.
The development comes at a time when the US-Iran war has now stretched into its eighth month. However, the focus is now on US carriers, which must determine how much more of the soaring fuel costs they can pass on to customers without affecting travel demand.
Citing data from the Labor Department, the report added that airfares across the US soared by an average of approximately 23% year-on-year in the seven months through September.
Bloomberg reported last week that Chicago-based United Airlines expects earnings for the year's last quarter to fall short of analysts' estimates, amid rising jet fuel costs, which have squeezed profits despite steady travel demand. It projected adjusted earnings of 50 cents to $1.50 per share for the fourth quarter, compared with analysts’ average estimate of $1.88. Its fuel bill rose 61.6% to $4.84 billion in the preceding quarter.
(with inputs from agencies)
Swati Gandhi is a digital journalist with over four years of experience, specialising in international and geopolitical issues. Her work focuses on foreign policy, global power shifts, and the political and economic forces shaping international relations, with a particular emphasis on how global developments affect India. She approaches journalism with a strong belief in context-driven reporting, aiming to break down complex global events into clear, accessible narratives for a wide readership.<br><br> Previously, Swati has worked at Business Standard, where she covered a range of beats including national affairs, politics, and business. This diverse newsroom experience helped her build a strong grounding in reporting, while also strengthening her ability to work across both breaking news and in-depth explanatory stories. Covering multiple beats early in her career has helped her be informed about her current work, allowing her to connect domestic developments with wider international trends.<br><br> At Live Mint, she focuses on international and geopolitical issues through a business and economic lens, examining how global political developments, foreign policy decisions, and power shifts impact markets, industries, and India’s strategic and economic interests.<br><br> She holds a Bachelor’s degree in English (Honours) from the University of Delhi and a Master’s degree in Journalism and Mass Communication from Guru Gobind Singh Indraprastha University. Her academic training has shaped her emphasis on precision, analytical rigour, and clarity in writing. Her interests include global political economy and the intersection of geopolitics with business.<br><br> Outside work, Swati focuses on exploring her passion and love for food. From fancy cafes to street spots, Swati explores food like a true foodie.
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