Alaska Air Group (NYSE:ALK) expects its profits to take a $150 million hit from the grounding of Boeing Co (NYSE:BA, ETR:BCO)'s 737 Max 9 aircraft which was taken out of service after a January 5 incident which blew a hole in the side of an Alaska Airlines plane.
The two-week grounding significantly impacted the airline which has 65 of these jets in its fleet. The Federal Aviation Administration (FAA) ruled on Thursday the planes could re-enter service.
Despite the $150 million projected hit from the Boeing grounding, Alaska Airlines still expects to report adjusted earnings per share (EPS) in the range of $3 to $5 for 2024, compared to analyst estimates per Zacks Consensus Estimate of $5.15.
During 4Q, the airline reported adjusted income of $38 million or $0.30 per share, ahead of estimates of $0.18.
Revenue of $2.55 billion was in line with estimates and represented a 3% year-over-year increase.
For 2023, EPS of $4.53 on revenue of $10.43 billion, beat estimates of EPS of $4.42 on revenue of $10.42 billion.
Alaska Air Group (NYSE:ALK) shares traded higher following the release of its results, up 2.8% at US$36.83 late morning on Thursday.