Alaska Air Group warned it will post a "significant third-quarter loss," attributing the red ink mainly to a $220 million accounting adjustment in the value of its fuel-hedging contracts.

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Alaska Air Group warned it will post a “significant third quarter loss,” attributing the red ink mainly to a $220 million accounting adjustment in the value of its fuel-hedging contracts.

The warning sent Alaska Air shares down $2.14, or 11.8 percent, to $16.05 — more than twice the day’s percentage decline in the major stock indexes. But the stock is still up 17 percent over the last three months.

Without the adjustment, Seattle-based Alaska would report a profit for the quarter, it said in a regulatory filing. The filing didn’t specify the size of the expected loss or the adjusted profit. According to Bloomberg News, analysts on average expected Alaska Air to earn 67 cents a share on an adjusted basis.

Because fuel costs have dropped sharply since this summer, the company must mark down the value of contracts that allowed it to buy fuel at predetermined prices.

The company also said its Alaska Air unit will reduce passenger capacity this quarter by more than projected last month. Fourth-quarter capacity will decline between 7 percent and 8 percent, up from the previous estimate of 6.5 percent to 7 percent, partly because the Machinists strike has delayed deliveries from Boeing.

Alaska’s Horizon regional airline is in discussions about deferring the 11 Bombardier Q400 aircraft scheduled for delivery in 2009, aiming to postpone deliveries until it successfully remarkets the CRJ-700 aircraft they will replace. Horizon still plans to take delivery of the three Q400s originally scheduled for the fourth quarter of this year.

Alaska Air said last month it would cut 850 to 1,000 jobs as it trims its winter flight schedule. It said today that severance payments and medical benefits for those employees cost $3 million to $4 million in the third quarter. The company will spend an additional unspecified amount in the fourth quarter on buyout packages.