Alaska Airlines to cut 200 jobs as Iran war-driven fuel costs threaten $700 million loss

The reductions will affect less than 1% of Alaska Air's approximately 32,500 employees

Alaska Air Group will eliminate around 200 non-contract positions as soaring fuel prices and geopolitical tensions linked to the Iran war put pressure on its finances, with the airline warning it could suffer losses of up to $700 million this year.The job cuts, announced on Friday, signal how the fuel-price shock triggered by the Iran war is beginning to affect employment in the US aviation industry, with carriers already raising airfares and scaling back expansion plans to offset higher operating costs.In a memo to employees, Chief Executive Ben Minicucci said the company could report an adjusted pretax loss of as much as $700 million in 2026 if current conditions persist.

This would mark its first adjusted pretax loss outside the Covid-19 pandemic since 2003, Reuters reported."We must return to the financial discipline that has long been a key competitive advantage," Minicucci said, adding that overhead expenses had "grown at a disproportionate rate to revenue" in recent years.The reductions will affect less than 1% of Alaska Air's approximately 32,500 employees. These include 125 positions in Washington state and 48 in Hawaii.

The company said no frontline or non-management jobs would be eliminated.Affected employees will have November 13 as their last working day but will continue receiving pay through December 31, along with severance and other support, according to the memo.

Expansion plans face financial pressure

The Seattle-based airline is pursuing an ambitious expansion into premium and international travel following its acquisition of Hawaiian Airlines. Its strategy includes investments in premium cabins, loyalty programmes and new international routes, with plans to expand its long-haul network from Seattle.Minicucci said the company would continue investing in its fleet, customer experience and network despite tightening spending elsewhere.