Alaska Air Group Makes First Profit Since 2019 Without Aid From Pandemic Grants

Through Dominic Gates, The Seattle Times

Updated: 41 minutes ago Posted: 1 hour ago

SEATTLE – Alaska Air Group, parent company of Alaska Airlines and regional carrier Horizon Air, posted third-quarter profit of $ 194 million, or $ 1.53 per share, its first profit not supported by government subsidies since the end of 2019 and the onset of the COVID -19 pandemic.

A year ago, in the same quarter, Alaska reported a net loss of $ 431 million, or $ 3.49 per share.

“We are delighted to return to profitability this quarter, leading the sector with a pre-tax profit margin of 12%,” CEO Ben Minicucci said in a statement on Thursday.

Before the pandemic, in the third quarter of 2019, Alaska made a profit of $ 322 million, or $ 2.60 per share.

Alaska posted a profit in the second quarter of this year, but only because it received $ 664 million in government grants and loans through the Payroll Support Program (PSP). Without that, and other one-time items, he would have lost $ 38 million.

Unlike other major US airlines, Alaska did not receive any other PSP support during the third quarter. Excluding the benefit of this government support, only Delta made a profit in the third quarter.

Excluding $ 1.3 billion in government support, Delta reported net income of $ 216 million, a pre-tax profit margin of 2.6%.

In contrast, excluding government support and one-time adjustments in the third quarter, Southwest reported a net loss of $ 135 million, American Airlines a net loss of $ 641 million, and United a net loss of $ 349 million.

Alaska’s return to operating profits came despite a moderate drop in bookings in August and September as the number of COVID cases increased across the country.

Minicucci called the financial results “a solid foundation for growth in 2022 and beyond”.

Data released Thursday shows Alaska carried 9.8 million passengers in the quarter, up from 3.6 million in the same period last year and 12.6 million before the 2019 pandemic.

Most employees have returned from extended leave, so the airline now has more than 20,000 active employees, up from 16,000 a year ago.

Total third quarter revenue was $ 2 billion, down from $ 2.4 billion in the same quarter of 2019.

Since the lows of business last year, Alaska has added planes to its fleet. Yet third-quarter fleet capacity, measured at 11.6 million available seat miles, remains significantly lower than the 2019 figure of 17.5 million. (Available seat miles, the industry standard metric for size of an airline’s fleet, is the number of seats available multiplied by the number of miles flown.)

The promising financial results are likely to increase calls from the pilots’ union for the company to make concessions and accept a new employment contract.

The unrest between the pilots escalated as talks with the company collapsed, and management this month referred contract negotiations to the National Mediation Council.

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