Alaska Air Group cuts about 200 jobs as it seeks $100 million in 2027 savings

Alaska Air Group is eliminating about 200 jobs and cutting contractor and professional-services spending under an overhead initiative it expects to save about $100 million in 2027, according to its quarterly report filed Friday with the Securities and Exchange Commission.

The company expects about $11 million in fourth-quarter costs, mostly severance and other termination benefits. It will record them as special items, a category for costs it classifies as unusual or infrequent. The filing says the initiatives were designed to preserve momentum on key strategic projects while reducing overhead spend.

"While we have spent much of the year controlling costs, we have made the difficult decision to reduce our non-contract workforce by approximately 200 roles," Alaska Airlines said in a statement last month. Affected employees were expected to leave the company Nov. 13, KTVB reported.

The roughly 200 jobs amount to about 0.6% of the company's 32,171 average full-time equivalent employees in the third quarter. The filing does not say how many of the eliminated roles are in Alaska.

The cuts follow a $147 million third-quarter net loss, or $1.32 per share, even as revenue grew 14% to about $4.3 billion, according to the company's third-quarter results. Fuel averaged $3.94 a gallon in the quarter, up 57% from $2.51 a year earlier.

On Oct. 20, the company revised its full-year outlook to an expected 2026 loss, and the filing says elevated fuel prices were the primary reason it moved from a projected pretax profit to a pretax loss. That change lowered the tax benefit the company expected from earlier losses, so it recorded a third-quarter income tax adjustment that included $151 million tied to the first two quarters. Through nine months, the company lost $416 million, compared with a $79 million profit a year earlier.

The company now projects a 2026 adjusted loss of $5.00 to $5.50 per share, with fuel expense $1.8 billion above plan. Its fourth-quarter guidance assumes fuel at $4.65 to $4.85 a gallon, about $650 million above its initial plan. "We are confident in our ability to execute on the things we can control, including increasing the spread between unit revenue and unit costs excluding fuel," Chief Executive Officer Ben Minicucci said in those results.

Variable incentive pay fell 16% through nine months. The filing ties most of that to a lower expected payout under the company's Performance-Based Pay program, reflecting lower profitability from elevated fuel prices, and the company paused its Operational Performance Rewards program for 2026.

The $100 million savings figure is a forecast, and the company lists an inability to meet cost-reduction goals among the risks to its results.