Alaska Airlines projects a slow recovery from the rapid decline in air travel due to the coronavirus pandemic, and it’s preparing to shed as many as 3,000 jobs next year from its 23,000-strong work force.
“Things will likely not go back to pre-COVID levels in the next 12 months,” said Alaska Air Group president Ben Minicucci in a video interview. “We see a smaller company in 2021. We see a smaller industry, in fact. We think we’ll be smaller by about 3,000 people.”
In April, the government provided Alaska $992 million in relief aid as it doled out payroll-protection grants and loans to the major airlines, money that will maintain jobs through the end of September. The job cuts will likely begin in October.
Minicucci also said the airline is in talks with Boeing over when it may take delivery of its first 737 MAX jets once the grounding is lifted, a development now expected in the fourth quarter.
Alaska has orders for 32 MAX-9s, with options for 37 more. At the end of March, the plan was to take three of those jets this year, with another seven MAX deliveries pushed out into 2021.
Minicucci said it’s hard to say now if the airline will take any MAXs in 2020.
“We haven’t made firm decisions,” he said. “Long term, we’ll have MAXs in the Alaska fleet, for sure. We’re big Boeing supporters.”
As 2020 began, Alaska was emerging from the complexities of acquiring Virgin America three years earlier. In late February, management internally outlined a plan for aggressive growth that anticipated the airline buying 200 new jets over the next decade.
A month later, the virus pandemic quickly floored the worldwide aviation industry and trashed Alaska’s planning.
“It was like someone had their hand on a valve and just turned off the valve,” said Minicucci. “We went from carrying 130,000 passengers a day to a trough of just 5,000 a day.”
He said traffic has come back up to around 24,000 passengers per day. But revenue is still down 80% compared to a year ago. While he’s hopeful domestic leisure travel will pick up substantially later this year, the prospect is worse for the return of more lucrative business and international travelers.
“We don’t see that coming back either in the fourth quarter or into next year,” Minicucci said.
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