Alaska Air Group has reported a net loss of $431 million for the third quarter 2020 compared to net income of $322 million in the year-ago period. Excluding payroll support program wage offsets, special items and mark-to-market fuel hedge accounting adjustments, the loss was £399 million. Special items this quarter include $121 million of asset impairment charges relating to permanently parked aircraft. Total revenue was down 71% for the quarter, although this is an 11 point improvement over the last quarter
Alaska Air has $3.8 billion in unrestricted cash and marketable securities as of Sept. 30, 2020 and total liquidity of $5.5bn. During the quarter, the airline boosted its liquidity position by nearly $1.2 billion in financing through the issuance of Enhanced Equipment Trust Certificates, secured by 42 Boeing and 19 Embraer aircraft.
The airline group has reduced its cash burn to approximately $4 million per day in the third quarter from approximately $5 million per day in the second quarter.
Alaska continues to block the sale of middle seats until Jan 2021.
"We are gaining momentum as we climb our way out of this crisis," said Air Group CEO Brad Tilden. "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."
Alaska Air expects to be about 80% of 2019 capacity by the summer of 2021, with full pre-COVID recovery to be well into 2022. Capacity for the fourth quarter is expected to be 40% of prior year levels with October down 45%.