Alaska Airlines to cut flight schedule by 70% for Apr/May-2020, expects 'severe financial pressure'
Alaska Airlines reduced (25-Mar-2020) its schedule for Apr-2020 and May-2020 by approximately 70%, due to an unprecedented decrease in travel demand resulting from the outbreak of the coronavirus. The carrier reported demand reductions of more than 80% and anticipates substantial reductions for the next several months. In order to save on costs and optimise liquidity, Alaska Airlines is implementing the following measures:
- Suspending cash dividend;
- Drawing down USD400 million from its line of credit and closing an additional secured loan for USD425 million;
- Until 30-Sep-2020, reducing pay for the CEO and president by 100%, 50% for the Horizon Air president, 40% for EVPs and SVPs and 20% for VPs and MDs;
- Reducing cash retainers for board of directors to zero until 30-Sep-2020;
- Encouraging employees to take voluntary leaves of absences with paid health and travel benefits;
- Suspending annual pay increases, laying off contractors and temporary workers and reducing working hours for management employees;
- Working with vendor partners to reduce spending;
- More aggressively managing spending for aircraft, buildings, equipment, leases, services and other areas.
The carrier has also worked with the White House, Treasury Department and Congress for a financial aid package worth USD50 billion for passenger airlines. Alaska Airlines CEO Brad Tilden stated that while the carrier is "ultimately optimistic about the future", "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". [more - original PR]