Alaska Air Group reports a third quarter net loss of $431 million

Alaska Air Group has made this announcement:

Financial Results:

  • Reported net loss for the third quarter of 2020 under Generally Accepted Accounting Principles (GAAP) of $431 million, or $3.49 per diluted share, compared to net income of $322 million, or $2.60 per diluted share in the third quarter of 2019.
  • Reported net loss for the third quarter of 2020, excluding payroll support program wage offsets, special items and mark-to-market fuel hedge accounting adjustments, of $399 million, or $3.23 per diluted share, compared to adjusted net income of $326 million or $2.63 per diluted share, in the third quarter of 2019.
  • Maintained adjusted net debt of $1.7 billion, flat from Dec. 31, 2019.
  • Reported a debt-to-capitalization ratio, including short-term borrowings related to COVID-19, of 59%.
  • Held $3.8 billion in unrestricted cash and marketable securities as of Sept. 30, 2020.

Liquidity Updates:

  • Reduced cash burn to approximately $4 million per day in the third quarter from approximately $5 million per day in the second quarter.
  • Obtained nearly $1.2 billion in financing through the issuance of Enhanced Equipment Trust Certificates, secured by 42 Boeing and 19 Embraer aircraft.
  • Reached an agreement with the U.S. Treasury in September to participate in the CARES Act loan program, and drew $135 million in September. The U.S. Treasury advised in October 2020 that the facility will be upsized to $1.9 billion.
  • Held $3.7 billion in cash and marketable securities as of Oct. 21, 2020 and total liquidity of $5.5 billion.

Operational and Guest Safety Updates:

  • Extending blocking of middle seats on mainline aircraft through Jan. 6, 2021.
  • Announced today a partnership with Microsoft to use sustainable aviation fuel to offset the environmental impact of certain business air travel.
  • Permanently eliminated change fees and extended the flexible travel policy for all new ticket purchases through Dec. 31, 2020.
  • Launched a partnership with certain healthcare providers to offer rapid and standardized COVID-19 testing for those guests traveling to destinations which require a negative test result.
  • Expanded the company’s Next-Level Care initiative, including implementation of new technology to create a touch-free experience for guests and a partnership with essential oils brand EO to provide hand sanitizing wipes onboard.
  • Strengthened face covering policy, requiring all guests over the age of two to wear a cloth mask or face covering at all times onboard.
  • Initiated voluntary early-out and incentive leave programs to our frontline employee workgroups, which were accepted by more than 4,000 employees. As a result, furloughs were limited to approximately 400 employees.
  • Announced 15 new routes during the third quarter, aimed at connecting West Coast travelers to key leisure destinations, including Jackson Hole, Wyoming, and Fort Myers, Florida.
  • Received official oneworld invitation on July 23, 2020. The company has announced it will officially join the alliance on March 31, 2021.

Alaska Air Group Inc. today reported third quarter 2020 GAAP net loss of $431 million, or $3.49 per diluted share, compared to net income of $322 million, or $2.60 per diluted share in the third quarter of 2019. Excluding the impact of payroll support program wage offsets, special items and mark-to-market fuel hedge adjustments, the company reported adjusted net loss of $399 million, or $3.23 per diluted share, compared to adjusted net income of $326 million, or $2.63 per diluted share in 2019.

“We are gaining momentum as we climb our way out of this crisis,” said Air Group CEO Brad Tilden. “Each of the last six months has been better than the month before in terms of flights offered and passengers carried, and to date, we’ve kept our net debt unchanged. Alaska has competitive advantages that continue to serve us well in this crisis, and we are fighting this battle with the most passionate and dedicated employees in the business.”

The following table reconciles the company’s reported GAAP net income and earnings per diluted share (diluted EPS) for the three and nine months ended Sept. 30, 2020 and 2019 to adjusted amounts.

Alaska Airlines aircraft photo gallery (Airbus):