- Joe Breitfeller
Alaska Air Group Reports First Quarter Net Loss of $232 Million on Revenues of $1.64 Billion
Alaska Air Group reported on Tuesday a first quarter net loss of $232 million or $1.87 per diluted share on a 13 percent revenue decline to $1.636 billion. In the same quarter in 2019, the carrier reported a net income of $4 million or $0.03 per diluted share.
Today, Alaska Air Group reported a first quarter net loss of $232 million or $1.87 per diluted share, compared to a net income of $4 million or $0.03 per diluted share for the first quarter of 2019. First quarter operating revenues declined 13 percent year-over-year to $1.636 billion. The company reduced capacity in April and May by over 80 percent and expects significant capacity reductions for June. Alaska has parked 156 mainline and 13 Horizon Air aircraft and has suspended flying for eight SkyWest Airlines aircraft. In Tuesday’s announcement, Alaska Airlines CEO Brad Tilden said,
“In the face of one of the greatest challenges in the history of commercial aviation, our people at Alaska and Horizon are doing extraordinary work to respond to this crisis. I want to thank each of them for everything they’re doing to serve our guests and to preserve the integrity of our operation. I also want to thank our leadership team for acting swiftly and courageously to reduce our cash burn rate and give us the best chance possible to navigate through this storm and capitalize on opportunities we may see on the other side. Alaska has been here for more than 88 years, serving our customers and communities, and providing good jobs for our people. Our commitment is to ensure this continues, and to emerge from this crisis better and stronger.”
As of March 31, 2020, the carrier held $2.1 billion in cash and marketable securities, which increased to $2.9 billion as of May 4, 2020 after the company received funds from the U.S. Cares Act Payroll Support Program (PSP) in April. Additionally, Alaska has drawn $400 million from existing credit facilities, executed a $425 million 364-day term loan facility and obtained an additional $50 million in secured financing on April 22, 2020. The airline has enacted a company-wide hiring freeze, reduced senior management salaries and offered voluntary and incentive leave programs which has been accepted by over 5,000 team members. Alaska Airlines has reduced their monthly cash burn from $400 million/month in March to $260 million/month in April and hopes to further reduce monthly cash burn to $200 million in June.
In trading Tuesday morning, shares in the Alaska Air Group, Inc. (NYSE: ALK) were up 0.89 percent at $28.98/share (10:24 AM EDT).
Source: Alaska Airlines