Alaska Air Group Cuts Costs as Covid-19 Rages

Company is pulling $4M a day from cash reserves to fund operations
Updated: Mon, 07/27/2020 - 13:14
 
 
  • Company is pulling $4M a day from cash reserves to fund operations

Alaska Air Group says it is flying an average of only 35,000 passengers per day, down from 130,000 before the coronavirus began to shut down society.

Vice President of External Relations Diana Birkett Rakow said in an email that flying increased in June and early July, but after many states paused reopening due to an uptick in Covid-19 cases, demand leveled off. SeaTac-based Alaska is pulling $4 million per day from cash reserves to fund operations – down from $15 million – but hopes to be cash-even by the end of the year.

The company has $3.7 billion in liquidity by collateralizing aircraft and other assets and is “focused on getting to cash-break even by year end,” Rakow writes.

Alaska will also cut 300 management positions by October 1 on top of the 200 it has already eliminated. All told, it will need at least 7,000 fewer employees in this year’s fourth quarter but hopes to bring 4,000 back next summer if flying returns. Many employees are considering extended leave options as well.

“We have a long way to go – but we are committed to long-term success,” she writes.

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