By Jace Moseley
Alaska Air Group Announces Third Quarter Financial Results
Alaska Airlines joined American Airlines and Southwest Airlines in announcing their third-quarter financial results on Sept. 22. The Seattle-based carrier also announced some changes to the customer experience while traveling during the COVID-19 pandemic.
Alaska Airlines reported losses for the second straight quarter, stemming from the lack of travel due to COVID-19 as well as associated travel restrictions. The carrier reported a net income loss of $431 million following Generally Accepted Accounting Principles (GAAP). While it is relatively unfair to compare COVID affected profits and losses to past quarters, the airline’s net income was $753 million less than the third quarter in 2019.
The carrier’s third-quarter loss was an increase from the second quarter of this year, but Alaska was able to drop daily cash burn by nearly one million dollars per day compared to the previous quarter.
In terms of cash on hand and liquidity of assets, the airline remains well-positioned with $3.7 billion in cash and marketable securities. Overall, the airline has $5.5 billion in liquid assets.
Even with the greater losses, executives of the airline remained optimistic about the future.
Alaska Air Group CEO Brad Tilden, said, “We are gaining momentum as we climb out of this crisis. 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 debt unchanged.”
The airline saw an increase in load factor over the previous three months when compared with quarter two of 2020. The overall load factor for the group increased by 10.1% to a total load factor of 48.5%.
The increased load factors can be attributed to a nearly 2 and a half times increase in revenue passengers over the past three months. After carrying just 1,485,000 passengers in the second quarter, the Alaska Air Group carried 3,595,000 passengers in the past financial quarter. With the increase of passengers, the airline passenger revenue increased from $309 million in the second quarter to $572 million in the third quarter.
Like numerous other airlines in the United States, Alaska has been a major proponent of keeping flyers safe while on their journey. The airline had previously blocked middle seats on all mainline flights until Nov. 30, 2020. With today’s earnings announcement, the airline stated their intention to continue blocking middle seats, with the policy being extended through Jan. 6, 2021.
Also announced alongside the earnings was a partnership with technology giants Microsoft. The partnership between the two Seattle-area companies involves the use of sustainable aviation fuel in an attempt to offset the negative effects of business air travel.
Alaska benefits from having relatively few international flights when compared with Delta Air Lines or American Airlines, causing fewer cuts related to border closures around the world. Although the airline’s route map has not changed all that drastically, over the course of the third quarter, Alaska added flights to new leisure destinations including Fort Myers, Florida and Jackson, Wyoming.
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.
