Alaska Airlines Cuts Capacity by 80% for April and May

The airline is the dominant carrier at Sea-Tac Airport, where last year it served more than 20 million passengers
Updated: Mon, 04/06/2020 - 15:28

The ongoing coronavirus-fueled disruption of the economy has led Seattle-based Alaska Air Group to announce that it expects to cut its capacity by 80% for April and May, with “sizable cuts” likely necessary for June and beyond “given current trends and circumstances,” the company announced in a filing with federal securities regulators.

The airline had earlier planned to reduce capacity in April by at least 10% and by 15% in May, according to media reports.

“Alaska Air Group Inc. continues to experience demand that is 80% or more below normal levels as a result of the COVID-19 outbreak. In recent weeks we have moved quickly to dramatically reduce capacity, pull down costs, cull cash expenditures and access financing,” Alaska announced in an April 6 filing with the Securities and Exchange Commission. “Today we are updating our capacity reduction plans to reflect 80% cuts in both April and May.”

The airline also said in the filing that it has applied for payroll-support grants under the recently enacted Coronavirus Aid, Relief and Economic Recovery Act (CARES Act). The airline describes the payroll-support grants as “critical” for the months ahead as it continues to weather the coronavirus storm with no certainty about when demand will bottom out or when a recovery will start.

“We plan to update capacity reductions for June and beyond in the future,” Alaska says in the SEC filing. “However, given current trends and circumstances, it is our expectation that sizable cuts will be necessary for the coming months.”

The airline says as of Monday, April 6, it has unrestricted cash and short-term investments of about $2 billion.

Alaska served more than 20 million passengers at Sea-Tac Airport, its hub, in 2019, according to airport data. For the entire year, Sea-Tac Airport’s passenger count totaled nearly 52 million.

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