Alaska Airlines could cut up to 3,000 staff

Alaska Air Group could cut up to 3,000 employees, or 13% of its workforce, by 2021 due to reduced demand as a result of the coronavirus pandemic. In a webcast to staff on June 4 seen by the Puget Sound Business Journal, group president Ben Minicucci cautioned of layoffs but said this might change according to future circumstances. “Our current working assumptions – and that’s all they are – are that we will operate about 20% less capacity during the summer of 2021 than we did in 2019, and that could mean operating with about 3,000 fewer people across all parts of Air Group,” he said. He added that more information would be forthcoming at the end of July. On June 2, the Alaska Air Group, which own Alaska Airlines (AS, Seattle Tacoma Int’l) and Horizon Air (QX, Seattle Tacoma Int’l) as well as ground handling company McGee Air Services, said in an SEC filing that it continues to experience demand that is significantly below normal levels as a result of the COVID-19 outbreak. “April 2020 flown capacity was approximately 78% below April 2019 levels, with approximately 15% load factor. May 2020 flown capacity was approximately 79% below May 2019 levels, with approximately 40% load factor. Reflecting the modest week over week improvements in demand, we plan to reduce June capacity 70% to 75% from prior-year levels,” the Group said. On May 22, the Group obtained USD88 million in secured financing, and has applied for USD1.1 billion in federal loan funding through a programme authorised under the Coronavirus Aid, Relief and Economic Security (CARES) Act, and continues to work with the US Treasury on the terms of that funding. Alaska Air Group has already received a USD992 million protection loan from Treasury that prohibits the airline from making any job cuts or layoffs until October 1. It said it is trying to reduce its cash burn to zero by the end of 2020.