By Jace Moseley
Alaska Air Group Announces First Quarter Results
The Alaska Air Group has announced its financial results for the first quarter of 2021, and like many other U.S. airlines, is eyeing a return to profitability later in 2021. The Seattle-based carrier reported a net loss of $131 million following Generally Accepted Accounting Principles or GAAP. While the airline’s losses seem relatively small, when adjusted to exclude money from the payroll support program, fuel hedge adjustments and special items net losses sat at $436 million.
Total operating revenue for the quarter was $797 million with nearly 83% coming from passenger revenues. While passenger revenue was down 56% from the first quarter of 2020, total operating revenue was just 51% lower than last year. The carriers operating costs were significantly lower than in 2020, sitting at $958 million for the quarter, largely thanks to COVID-19 assistance in the form of the payroll support program. Off the airlines $493 million wage and benefit costs, $411 million was offset by PSP, accounting for over 83% of wages.
Air Group CEO Ben Minicucci said, “This has been a long road, and I want to thank the employees at Alaska and Horizon for providing such great service and everything they’ve done to get through the last challenging year and help us achieve positive cash flow in March.”
At the end of the quarter, the airline held $3.5 billion in unrestricted cash and marketable securities with a total liquidity of $5.3 billion, putting them in a relatively safe position as it continues to look towards profitability in the coming quarters.
Passenger numbers were down significantly from the first quarter of 2021, however, it must be remembered that travel did not slow until early March 2020. The Alaska Air Group as a whole carried 4.666 million revenue passengers in the first three months of 2021. The carrier’s overall load factor was 51.9%, with mainline flights operating at a 51.8% load factor and regional flights operating at a 52.1% load factor.
On top of positive financial outlooks, the first quarter brought many changes to the Alaska Air Group, including a new CEO and COO. Minicucci replaced former CEO Brad Tilden as CEO and Constance von Muehlen joined Alaska Airlines as COO.
Along with some new leadership, the carrier also received some new metal with the delivery of four Boeing 737-9 MAX aircraft. Not only did the airline take delivery of the new type, following its ungrounding in late 2020, but also operated its first commercial flights in early March. Alaska not only received new MAX aircraft but saw options exercised and converted into firm orders for additional frames, increasing deliveries of the type to 68 in the next four years.
Customers were treated to significant expansion by the airline as well, with the announcement of numerous new routes as well as the addition of new cities to the carrier’s route map. The final day of the quarter saw Alaska join the oneworld alliance, becoming the 14th member, better connecting the airline with partners not only in the United States but around the globe.
Being from Seattle, Jace was bitten by the aviation bug at a young age and never outgrew it. Although none of his family is in the industry, he has always wanted to work in aviation in some capacity. He currently in college studying air traffic management.