Alaska Airlines unblocked middle seats at the start of 2021. After being one of the last airlines to do so, the carrier ended its load factor caps at a time when air travel demand was still at one of its lowest points in recent history, and many flights were expected to go out with enough room to distance passengers. However, as air travel picked up and people started flying again, Alaska Airlines unblocked middle seats at the right time.
Alaska’s improving first-quarter load factor
Andrew Harrison, Chief Commercial Officer at Alaska Airlines, said the following on the airline’s first-quarter earnings call about the end of the middle seat block:
“For the quarter, our load factor was 52%, which is up seven points from Q4 on nine points more capacity, aided by our move to unblocked middle seats beginning in January. This has been really helpful as demand returns. In March, 41% of our mainline departures carried over and above what our load factor caps would have allowed if middle seat blocks have remained in place.”
January was a rough month for the airline industry. After the end of the winter holiday season, passenger numbers began to slide, and the rollout of vaccines appeared to be going painfully slow, so Alaska’s team bet on the summer. When Alaska ended its middle seat block, it had advised that its load factor could go as low as 35%, meaning plenty of flights would feel like a private jet experience.
In January, Alaska Airlines recorded a final passenger load factor of 42%, which was still a low number. Come February, Alaska’s load factor increased slightly to 49%, with some signs of a nearing increase in travel demand. However, March is when the airline’s ability to sell all of its seats really helped.
Prepared for the recovery
On capacity down 28% for the month compared to March 2019 with revenue passengers down 45%, Alaska Airlines notched a load factor of 62% in the month. Buoyed by spring break, an accelerating vaccine rollout, and lessened travel restrictions, Alaska Airlines strategically targeted its capacity and began to bolster its summer schedule.
With the end of the middle seat block, Alaska could cater to more passengers very quickly. It already was flying many of its key leisure routes and, without load factor caps, and being able to sell the middle seat helped the airline avoid scrambling to add capacity at the last minute.
Other airlines were not so lucky in their timing. Delta Air Lines, which will sunset its middle seat block in just a few days, faced a higher demand environment that, with the middle seat block, meant it was less prepared to handle the increased traffic volumes. Delta’s executives stated the airline lost around $100 to $150 million of gross revenue due to the middle seat block in March.
Higher load factors and bookings spell good news
Not only was Alaska Airlines able to fly the increased number of passengers it saw booking in March, but it also increased capacity compared to January. The carrier added 20,000 more daily seats in March compared to January, according to Mr. Harrison.
The environment is improving. Alaska expects to hit around a 70% load factor for April as passengers feel more comfortable booking, as Mr. Harrison stated:
“Recent data indicates employment trends should continue to improve. We began the quarter in January with an average of around 60,000 bookings a day or about 43% of 2019 levels. Bookings stepped to approximately 60% of 2019 levels in February and then 75% in March.”
Alaska Airlines has also not seen much of a hit due to opening up the middle seats. Mr. Harrison highlighted a survey from the first quarter, indicating that over 80% of its guests gave the airline an “excellent” or “very good” rating on health and safety, with overall customer satisfaction scores remaining higher than pre-crisis levels.
Essentially, Alaska unblocked seats at the right time. It was able to cater to increased passenger revenue, which came relatively quickly in March, though it also increased capacity. With high scores from customers who appreciated the middle seat block in 2020, Alaska was able to thread the needle on ensuring its customers felt safe during the crisis and reopening enough onboard capacity to avoid spilling over revenue.
With vaccinations pressing forward and many markets showing more signs of opening up, all eyes are on California. A large air market, the state is crucial for Alaska, and the carrier is expecting the June reopening plan for the state will lead to a further boost in bookings and revenue.
While the airline is continuing to block middle seats in its extra-legroom economy section through May 31st, this is a relatively small number of seats and a percentage of Alaska’s overall capacity. For customers who want to guarantee some space onboard, buying up to this cabin is the best bet when flying Alaska Airlines.
Are you glad that Alaska Airlines has ended its middle seat block? Let us know in the comments!