The airline’s net third quarter loss excluding payroll support program wage offsets, special items and fuel hedge adjustments totaled $399 million or $3.23 per diluted share. Alaska Airlines ended the quarter with $3.8 billion in unrestricted cash and marketable securities.
On Thursday (October 22, 2020), Alaska Airlines announced a third quarter GAAP net loss of $431 million or ($3.49) per diluted share versus a net income of $322 million or $2.60 per diluted share for Q3 2019. When U.S. CARES Act payroll support program (PSP) wage offsets, special items and mark-to-market fuel hedge adjustments are excluded, the carrier reported a net loss of $399 million or ($3.23)/share compared to a Q3 adjusted net income of $326 million or $2.63/share in 2019. Operating revenue for the quarter declined 71% to $701 million versus $2.389 billion during the same period last year. Alaska Airlines’ adjusted net debt has remained flat from December 2019 at $1.7 billion and their debt-to-capitalization ratio (including short-term COVID-19 related borrowings) is 59%. The company closed the third quarter with a total of $3.8 billion in cash and marketable securities. In Thursday’s announcement, Alaska Airlines Group’s CEO, Brad Tilden said,
"We are gaining momentum as we climb our way out of this crisis. Each of the last six months has been better than the month before in terms of flights offered and passengers carried, and to date, we've kept our net debt unchanged. Alaska has competitive advantages that continue to serve us well in this crisis, and we are fighting this battle with the most passionate and dedicated employees in the business."
During the third quarter, Alaska Airlines has reduced their daily cash burn rate to approximately $4 million per day, down from around $5 million per day during the second quarter. The company also obtained nearly $1.2 billion in financing through the issuance of Enhanced Equipment Trust Certificates (EETCs) secured with 42 Boeing and 19 Embraer aircraft. Alaska Airlines also reached an agreement with the U.S. Treasury to participate in the U.S. CARES Act loan program and drew $135 million from the facility in September. In October 2020, Treasury advised the carrier that the loan facility has now been upsized to $1.9 billion. As of October 21, 2020, Alaska Airlines held a total of $3.7 billion in cash and marketable securities and a total liquidity position of $5.5 billion.
Alaska Airlines and their regional partners serve over 115 destinations in the United States and North America, providing essential service for their guests and critical cargo shipments. The carrier has hubs in Seattle, San Francisco, Los Angeles, Portland and Anchorage and is known for low fares, excellent service and sustainability efforts. The award-winning airline serves over 47 million guests annually and has been named “Highest in Customer Satisfaction Among Traditional Carriers in North America” by J.D. Power for the last 12 years. Along with their Global Partners, Alaska Airlines’ guests can earn and redeem miles on flights to more than 800 global destinations.
In trading Thursday morning, shares in Alaska Air Group, Inc. (NYSE: ALK) were 2.42% higher at $40.65/share (11:20 AM EDT).
Source: Alaska Airlines