Alaska Air Revises Q1 Guidance On Expected Accounting Treatment Of Boeing Compensation

(RTTNews) - Alaska Air Group, Inc. (ALK) said, as a result of revised accounting treatment, the company's first quarter adjusted loss per share will not include the Boeing compensation, and is expected to be approximately in a range of loss of $1.15 to a loss of $1.05. This reflects approximately $0.95 cents of lost earnings due to Flight 1282 and the 737-9 MAX grounding lost profits, the company noted. Previous adjusted loss per share guidance was a range of $0.55 to $0.45.

The company's prior investor update indicated its expectation that the remuneration for lost profits would be taken into earnings. However, the company has revised planned accounting treatment following further analysis of Generally Accepted Accounting Principles and precedent transactions of a similar nature within the industry.

Air Group said its first quarter operation and results were significantly impacted by Flight 1282 in January and the Boeing 737-9 MAX grounding which extended into February. Absent these factors, first quarter adjusted pretax profit would have improved approximately 80% over first quarter of 2023, versus pre-grounding expectations of a 30% improvement.

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