Oct 21, 2026 earnings call — Focus on premium and diversified revenue growth
Q3 revenue $4.3 billion; adjusted net income $40 million, with fourth-quarter adjusted loss per share expected between $2.50 and $2.00.
Revenue $4.3B (est $4.3B) · EPS $0.36 (est $0.39)
Key quotes
"Premium demand remains robust with revenues reaching more than 36% of our total mix, up 3 points year over year."
"Given recent trends, we expect our fourth quarter economic fuel cost to average between $4.65 and $4.85 per gallon."
"non fuel unit costs increased 4.4% year-over-year on only 2.4% capacity growth, in line with guidance."
Analyst Q&A 11
International ramp and market share
Q (Mike Linenberg · Deutsche Bank): How long to ramp international markets to profitability; and is the 3-point outperformance in the Heathrow market volumes or revenue?
A: Management said international ramp will be a near-term drag but they are seeing rising loads and unit revenues on those routes. They noted the Heathrow premium cabin presence fits their strategy and is encouraging for connecting traffic through Seattle.
"So in the near term, it will continue to be a drag." — Andrew R. Harrison
International unit economics and fuel
Q (Ravi Shanker · Morgan Stanley): Can current fuel pass-through on new international routes be the baseline if fuel normalizes; how do you think about unit economics over time?
A: Management said international economics depend on fuel cost and demand. They emphasized strong ramp and upside from better connections, product, and joint-businesses supporting the platform.
"I think, you know, international, just like domestic or any other is basically gonna be dictated, by obviously the fuel cost and then demand." — Andrew R. Harrison
Adding flying and buyback lessons
Q (Jamie Nathaniel Baker · JPMorgan): What internal metric decides adding back trimmed flying; and any lessons from the share repurchase program and capital allocation?
A: Management said when aircraft are freed they invest in them (upgrades, maintenance) rather than sit idle, so decisions are not just short-term economics. On buybacks, they said with hindsight they would have acted differently if fuel had been predictable, and they may conserve cash instead of buying back shares next year.
"Look, I think if we had you know, a crystal ball in the future and could have predicted where fuel prices are gonna go, yeah, I think we would have thought about the share buyback differently just to be honest." — Benito Minicucci
Higher fuel new normal and 737-10 timing
Q (John Godden · Citi): If a new normal is higher fuel, what adjustments protect earnings; and when do you expect first 737-10 deliveries?
A: Management said their strategy (premium, international, loyalty, cargo) raises the earnings floor and makes them more resilient to fuel or economic shocks. They said 22 deliveries are expected next year, starting late in the first quarter, with later tranches in Aurora configuration.
"You know, next year, we are going to have 22 deliveries." — Benito Minicucci
Timing of growth-market drag and Hawaii outlook
Q (Savanthi Syth · Raymond James): When will the 3-point drag from growth markets subside; and what is the outlook for Hawaii recovery? Also, why lower Q4 guide versus capacity?
A: Management said growth this year will annualize and materially affect results into the second quarter and beyond, and core growth next year is a couple of points. On Hawaii they expect improvement in 2027 due to fewer storms, better systems, and industry capacity trends; they said the Q4 coupon business is accelerating but Atmos annualization creates a headwind.
"The growth that we saw this year on the call will annualize going into next year and start materially annualizing as we get into the second quarter and beyond." — Andrew R. Harrison
Cost per unit, inflation, and CapEx flexibility
Q (Atul Maheswari · UBS): What CASM ex-growth and inflation assumptions for next year; and can you cut CapEx if fuel stays high while balancing leverage and long-term needs?
A: Management said core inflation has been 4% to 5% and they aim for a multi-year growth rate near 4%; they will keep focusing on productivity and utilization. On CapEx they said they have flexibility, strong Boeing partnership, will keep investing in fuel-efficient MAX 10 and 787s, and they plan deliberate financing to restore balance sheet strength.
"I think we have been sharing for a couple of years, core inflation is 4% to 5%." — Shane R. Tackett
Sizing Hawaii headwind
Q (Duane Pfennigwerth · Evercore): How large were Hawaii headwinds this year in system RASM points or pre-tax dollars; and when will premium card and lounge contributions start to help?
A: Management said Hawaii headwinds were about a couple of points on unit revenues at a system baseline. They also said Summit card economics are already coming through and loyalty growth is progressing, contributing to diversified revenue over time.
"I think at the highest level, a couple of points." — Andrew R. Harrison
Load vs yield strategy and JV timing
Q (Conor Cunningham · Melius): Will you accept lower load factor for higher yields in 2027; and timeline for international joint ventures and their profitability impact?
A: Management said the clear goal is to maximize unit revenues and they are monitoring load versus yield by region, willing to adjust to be more revenue accretive. They expect to file in the fourth quarter for joint businesses and see upside to economics from partnering and distribution, though they did not share numbers.
"We expect to file sort of in this fourth quarter." — Andrew R. Harrison
Network growth trade-offs and medium-term capacity
Q (Catherine O'Brien · Goldman Sachs): How do you weigh long-term strategic growth in places like San Diego and Portland versus short-term pressure from those investments; and is 4% growth a 2027 or medium-term target?
A: Management said most of the growth has already been put into the system and will abate next year, and they expect to harvest results from hub and market changes next year. On capacity, they reiterated a long-term focus targeting about 4% growth over the next several years and will refine specific 2027 numbers later.
"I think just for clarity, the growth is already in there." — Andrew R. Harrison
Cargo growth shape and tech improvements
Q (Thomas Fitzgerald · TD Cowen): Is the plan to triple cargo revenues linear or lumpy, any Amazon update; and what is the tech stability and priorities for 2027?
A: Management said cargo growth is linear and steady, with new narrowbody freighters next year and widebody deliveries supporting network benefit; they are optimistic about deeper partnership with Amazon but have no detail today. For technology they said infrastructure stability investments are paying off, and they created a CITO role to drive AI, cyber, and capability building.
"it is very linear and steady, and we are confident in the course we are headed." — Jason Matthew Berry
Earnings improvement vs fuel risk
Q (Brandon Oglenski · Barclays Capital): Can core nonfuel earnings improvement of $3–$4 offset possible higher fuel next year, or could 2027 be another loss if fuel stays high?
A: Management said the underlying business improvement comes from strategic investments across network, premium, loyalty, and international, and they will not abandon those long-term decisions. They said they have the financial wherewithal and expect the industry to respond if fuel stays structurally higher.
"We have the financial wherewithal to withstand the current backdrop and the balance sheet." — Shane R. Tackett