Alaska Airlines has reported a net loss for the first quarter of 2020 of $232 million, compared to net income of $4 million in the first quarter of 2019.
“The impacts of COVID-19 on our business have been unprecedented,” Alaska said. “Demand deterioration began in February, and in March cancellations overwhelmed new bookings. Today demand remains over 90% below normal levels. Alaska Air Group's priorities as it continues to manage through this crisis are to ensure the health and safety of guests and employees, to preserve financial strength, and to plan for the future of the company.”
Alaska’s capacity in April decreased more than 80% compared to the prior year, and capacity cuts in May will also be at least 80%. The airline expects capacity cuts in June to be significant.
The firm parked 156 mainline aircraft and 13 Horizon Air aircraft, and suspended flying for 8 SkyWest Airlines aircraft.
Alaska, as of May 4, held $2.9 billion in cash and marketable securities, including Coronavirus Aid, Relief and Economic Security (CARES) Act Payroll Support Program (PSP) funds received in April.
It also drew $400 million from existing credit facilities and executed an agreement for a $425 million 364-day term loan facility and obtained an additional $50 million in secured financing on April 22, 2020.
The firm has reduced cash burn from $400 million per month in March to $260 million in April, with the goal of reaching $200 million in June and suspended over $500 million in capital spending, largely through the deferral of pre-delivery aircraft payments and non-aircraft capital projects.
"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," said Alaska Airlines chief executive Brad Tilden. "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.