• ITVI.USA
    15,841.280
    3.720
    0%
  • OTRI.USA
    26.920
    0.070
    0.3%
  • OTVI.USA
    15,818.420
    1.300
    0%
  • TLT.USA
    2.540
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    2.850
    0.220
    8.4%
  • TSTOPVRPM.CHIATL
    3.310
    0.440
    15.3%
  • TSTOPVRPM.DALLAX
    1.400
    0.050
    3.7%
  • TSTOPVRPM.LAXDAL
    2.670
    0.660
    32.8%
  • TSTOPVRPM.PHLCHI
    2.120
    0.240
    12.8%
  • TSTOPVRPM.LAXSEA
    3.070
    0.300
    10.8%
  • WAIT.USA
    125.000
    -2.000
    -1.6%
  • ITVI.USA
    15,841.280
    3.720
    0%
  • OTRI.USA
    26.920
    0.070
    0.3%
  • OTVI.USA
    15,818.420
    1.300
    0%
  • TLT.USA
    2.540
    0.000
    0%
  • TSTOPVRPM.ATLPHL
    2.850
    0.220
    8.4%
  • TSTOPVRPM.CHIATL
    3.310
    0.440
    15.3%
  • TSTOPVRPM.DALLAX
    1.400
    0.050
    3.7%
  • TSTOPVRPM.LAXDAL
    2.670
    0.660
    32.8%
  • TSTOPVRPM.PHLCHI
    2.120
    0.240
    12.8%
  • TSTOPVRPM.LAXSEA
    3.070
    0.300
    10.8%
  • WAIT.USA
    125.000
    -2.000
    -1.6%
Air CargoAmerican ShipperCompany earningsNews

Alaska Air wins by losing less

Cost controls improve airline’s chances for weathering coronavirus crisis

Investors rewarded Alaska Air Group (NYSE: ALK) for reporting first-quarter losses and cash burn projections that beat expectations, with the stock up 1.15% to $29.10 per share at Tuesday’s market close.

The parent company of Alaska Airlines and Horizon Airlines said its first-quarter adjusted net loss was $0.82 per share, or $102 million, ahead of Wall Street’s consensus of a $1.14 loss per share. Total revenue fell 13% to $1.6 billion compared to analyst estimates for $1.7 billion compared to the same period last year.

Cargo revenue fell 8% to $46 million.

The implosion of travel demand due to the coronavirus forced airlines to implement severe austerity programs. Alaska’s measures include reducing passenger schedules by at least 80% through May and offering voluntary, unpaid leave, which more than 5,000 employees accepted. The deferral of predelivery aircraft payments and nonaircraft capital projects has saved more than $500 million in capital expenditures this year, and Alaska is lowering discretionary costs by negotiating payment extensions or reductions with lessors, vendors and airports.

Alaska said it reduced its cash burn from $400 million per month in March to $260 million in April, and hopes to get it to $200 million per month in June. The monthly negative cash flow translates to about $8.6 million per day in April compared to major domestic carriers like American Airlines ($70 million per day) and United Airlines ($50 million per day). 

The Seattle-based carrier has $2.9 billion of cash and cash-equivalents after accepting a $992 million payroll protection grant from the U.S. government and borrowing $875 million from private sources. It has also applied to the government for the option of taking a $1.1 billion loan.
CEO Brad Tilden thanked front-line workers for maintaining ongoing services at high levels and the leadership team for giving “us the best chance possible to navigate through this storm and capitalize on opportunities we may see on the other side.”

Eric Kulisch, Air Cargo Editor

Eric is the Air Cargo Market Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals from the American Society of Business Publication Editors for government coverage and news analysis, and was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at ekulisch@freightwaves.com