Alaska Airlines Says Long-Haul Flights 'A Drag': 9 Nonstop Routes

Despite Alaska Airlines aggressively expanding its long-haul network, the airline lost $147 million in the third quarter; while it attributes this to a higher-than-expected tax rate, the loss likely reflects the expansion of its long-haul operations.

According to Enilria, the Seattle-based airline expects a total loss of $650 million in Q4. Rapid growth pressure is common for airlines, and it can take months, sometimes years, for a route to fully mature. As the airline's load factors improve, it may still be a 'drag' in the near term.

London Remains Popular, And Long-Haul Travel Outlook Looks Positive

Improved load factors have driven a 7.5-point increase in load for the third quarter from international operations alone. Unit revenues have improved by 24%. While performance during the first year of operations on these new routes may be subdued, they are expected to fully mature over time.

London Heathrow Airport (LHR), likely one of the most recognizable routes in the airline's exciting international expansion, is enjoying positive demand, and specifically in the premium cabins. This is an exciting development for the airline, which otherwise faces direct competition on the city pair against alliance partner British Airways, and competitors Delta Air Lines and Virgin Atlantic.

Connecting Via Seattle Is An Important Part Of The Equation

Alaska is betting big on demand not only from local Seattle travelers, but also from transiting passengers through its Seattle hub. The carrier has already launched routes to London, Rome, Reykjavik, Seoul, and Tokyo, with new services to Athens and Paris due to come online next year.

Earlier this week, the airline also announced plans to use Hawaiian Airlines' Airbus A330s to launch new services from Seattle to Osaka and Papeete from 2027. Papeete, in French Polynesia, is an exciting addition as the airline expands to the South Pacific and fills the gap left by Air Tahiti Nui, which axed its Seattle connection earlier this year.

Alaska has grown into one of the largest airlines on the US West Coast, and it is betting big on developing Seattle into a global hub. The airline has otherwise enjoyed modest load factors on its international long-haul routes from Seattle, with the highest on its Narita services, which have seen 85.9% load factors and have operated for more than a year.

Where Might Alaska Pick Next For International Expansion?

With Athens, Paris, Papeete, and Osaka coming online next year, many aviation enthusiasts are closely watching where Alaska could expand next. Many have wondered whether more Asian destinations are on the cards, with some pointing to Shanghai, Beijing, Bangkok, or Ho Chi Minh City.

Sydney Kingsford Smith Airport (SYD), Australia, has also been mooted as a potential new route for the airline, as it debuted the Sydney Harbour Bridge in its first onboard safety video. None of these routes have been formally announced by the airline.