SEATTLE, March 25, 2020 /PRNewswire/ -- Alaska
Airlines today announced plans to reduce its flight schedule for
April and May by approximately 70% following historic and
unprecedented falloff in demand related to the COVID-19 outbreak
across the U.S. and beyond.
Flight schedules for June and beyond will be based on demand,
but it is our expectation that reductions will be substantial for
at least the next several months. As a result of the outbreak,
government leaders across the country have appropriately encouraged
social distancing and discouraged or restricted travel. As a
result, Alaska – like other
airlines – is seeing demand reductions of more than 80%.
"Alaska's goal, since the onset
of this outbreak, has been to keep our employees and guests safe
and healthy, and to ensure that our airline is here to support and
serve them in the future," said Alaska CEO Brad Tilden. "But we also know that given the
lack of demand for air travel and profound impact on the financial
management of our business, hard work and aggressive control of
costs and cash are required, even with additional
support."
Some of the actions being taken to reduce spending and improve
liquidity are as follows:
- We are announcing today the suspension of our cash dividend and
we have previously announced the suspension of our share repurchase
program.
- We have drawn down $400 million
on our line of credit and closed an additional secured loan for
$425 million today.
- We are announcing officer pay reductions through Sept. 30 as follows:
-
- 100% pay reduction for both the CEO and President of Alaska
Airlines;
- 50% for the President of Horizon Air;
- 30% for EVPs and SVPs; and
- 20% for VPs and MDs.
- Our Board of Directors have voted to take their own cash
retainers to zero through Sept.
30.
- We are actively soliciting employees who are interested in
voluntary leaves of absence, under which Alaska would continue to pay both health and
travel benefits.
- We have suspended annual pay increases, plan to reduce hours
for management employees, and will release contractors and
temporary workers.
- We are aggressively managing all spending, including all
spending for aircraft, buildings, equipment, leases, services and
other areas. We will of course make all necessary investments in
expense items to maintain the safety and integrity of our
operation.
- We are working with all vendor partners to reduce spending in
line with our reduced flight schedule.
Additionally, we have worked actively with the White House, The
Treasury Department, and Congress on an aid package that could
total $50 billion for passenger
airlines if it is passed. "We appreciate that the federal
government recognizes the essential nature of airline service to
our economy and society, and the importance of aviation jobs," said
Tilden. "As we more fully understand the impact of these
provisions, we will add to our plans to manage through this
change."
"These actions are unprecedented, but these are truly
unprecedented times," said Tilden. "Alaska has been here for 88 years to serve our
customers and communities and to provide good jobs for our people.
It is imperative that we act swiftly and courageously to ensure
that we're here to continue our mission in the future."
"We are ultimately optimistic about the future of our great
airline," said Tilden. "But it is clear that we are and will
be under severe financial pressure for the foreseeable future and
that is why these actions are essential."
Learn more about Alaska Airlines response to the COVID-19
outbreak at https://blog.alaskaair.com/coronavirus/.
Alaska Airlines and its regional partners fly 47 million guests
a year to more than 115 destinations with an average of 1,300 daily
flights across the United States
and to Mexico, Canada and Costa
Rica. With Alaska and
Alaska Global Partners, guests can earn and redeem miles on flights
to more than 800 destinations worldwide. Alaska Airlines ranked
"Highest in Customer Satisfaction Among Traditional Carriers in
North America" in the J.D. Power
North America Airline Satisfaction Study for 12 consecutive years
from 2008 to 2019. Learn about Alaska's award-winning service at
newsroom.alaskaair.com and blog.alaskaair.com. Alaska Airlines and
Horizon Air are subsidiaries of Alaska Air Group (NYSE: ALK).
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SOURCE Alaska Air Group