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Alaska Air Group Reports Fourth Quarter 2020 and Full-Year Results

January 26, 2021 /

Financial Results:

  • Reported net loss for the fourth quarter and full year 2020 under Generally Accepted Accounting Principles (GAAP) of $430 million, or $3.47 per diluted share, and $1.3 billion, or $10.59 per diluted share. These results compare to fourth quarter 2019 net income of $181 million, or $1.46 per diluted share, and full year 2019 net income of $769 million, or $6.19 per diluted share. 
  • Reported adjusted net loss for the fourth quarter and full year 2020, excluding payroll support program wage offsets, special items, and mark-to-market fuel hedging adjustments, of $316 million, or $2.55 per diluted share, and $1.3 billion, or $10.17 per diluted share. These results compare to fourth quarter 2019 adjusted net income of $181 million, or $1.46 per diluted share, and full year 2019 adjusted net income of $798 million, or $6.42 per diluted share. 
  • Reported adjusted net debt of $1.7 billion, flat from December 2019 despite a 59% decline in operating revenues for the year. 
  • Reported a debt-to-capitalization ratio, including certain short-term borrowings, of 61%. 
  • Held $3.3 billion in unrestricted cash and marketable securities as of Dec. 31, 2020. 

Liquidity and Fleet Updates:

  • Accessed approximately $5 billion in new liquidity in 2020, including $1.2 billion raised in the capital markets and approximately $600 million in bank financing. 
  • Reached an agreement with the U.S. Treasury in January 2021 to receive an extension of payroll support totaling $533 million, $266 million of which was received on Jan. 15, 2021. 
  • Extended the period available to draw funds under the CARES Act loan program from March 26, 2021 to May 28, 2021. 
  • Announced plans to expand the mainline fleet and restructure the existing aircraft purchase agreement with Boeing. In total, Air Group will take delivery of 68 737-9 MAX aircraft between 2021 and 2024, inclusive of 32 previous purchase commitments and 13 aircraft to be leased from Air Lease Corporation. 
  • Took delivery of Alaska’s first 737-9 MAX aircraft on January 24, 2021, which is expected to enter revenue service on March 1, 2021. 
  • Permanently removed an additional 20 Airbus A320 aircraft from the fleet in the fourth quarter, resulting in 40 Airbus aircraft removed in 2020. A total of 31 Airbus aircraft remain in the operating fleet as of the end of the year. 
  • Held $3.4 billion in cash and marketable securities as of Jan. 22, 2021, and total liquidity of $5.2 billion. 

Operational and Guest Safety Updates

  • Announced seven new routes in the fourth quarter, including three “fun and sun” destinations connecting Anchorage to Las Vegas, Denver and San Francisco, and expanded service from Southern California to Austin and New York. 
  • Eliminated change fees and extended the flexible travel policy for tickets purchased through March 31, 2021. 
  • Implemented Next-Level Care initiative, which includes more than 100 measures designed to create a safe experience for guests and employees. These efforts were highlighted in the Alaska Safety Dance video. 
  • Named the safest U.S. airline by AirlineRatings.com in their annual Top 20 Safest Airline report. 
  • Launched the West Coast International Alliance with American Airlines on Jan. 1, 2021, which will unlock new benefits for Alaska Mileage Plan members in the spring. 
  • Partnered with healthcare providers to offer rapid and standardized COVID-19 testing for those guests traveling to destinations that require a negative result. 
  • Received diamond level certification from the Airline Passenger Experience Association for the health and safety standards Alaska and Horizon Air implemented to keep guests safe throughout their journey. 
  • Launched pre-clearance program for guests traveling to the Hawaiian Islands from the West Coast with an approved negative COVID-19 test. 
  • Announced a partnership with Microsoft to use sustainable aviation fuel to offset the environmental impact of certain business air travel. 
  • Announced oneworld benefits for elite Mileage Plan members, providing tier status in the global alliance to Alaska’s elite members, as the company works toward joining oneworld on March 31, 2021. 

Alaska Air Group Inc. (NYSE: ALK) today reported a fourth quarter 2020 GAAP net loss of $430 million, or $3.47 per diluted share, compared to net income of $181 million, or $1.46 per diluted share in 2019. Excluding the impact of payroll support program wage offsets, special items and mark-to-market fuel hedge adjustments, the company reported a fourth quarter adjusted net loss of $316 million, or $2.55 per diluted share, compared to adjusted net income of $181 million, or $1.46 per diluted share in the fourth quarter of 2019. 

The company reported a full-year 2020 GAAP net loss of $1.3 billion, compared to net income of $769 million in the prior year. Excluding the impact of payroll support program wage offsets, special items and mark-to-market fuel hedge adjustments, the company reported an adjusted net loss of $1.3 billion, or $10.17 per diluted share for 2020, compared to adjusted net income of $798 million, or $6.42 per diluted share in 2019.

Click the link below to view the full results!

https://newsroom.alaskaair.com/2021-01-26-Alaska-Air-Group-reports-fourth-quarter-2020-and-full-year-results

Alaska Airlines first delivery of a 737-9 MAX departs from Seattle's Boeing Field on Jan. 24, 2021.

Alaska Airlines Takes Delivery of its First Boeing 737-9 MAX Aircraft

January 26, 2021 /

Alaska Airlines (NYSE: ALK) has accepted delivery of its first Boeing 737-9 MAX airplane, marking a new phase of modernizing the airline’s fleet in the coming years. Alaska pilots flew the aircraft on a short flight yesterday from the Boeing Delivery Center at Boeing Field in Seattle to the company’s hangar at Sea-Tac International Airport with a small group of Alaska’s top leadership on board.

Alaska’s first 737-9 is scheduled to enter passenger service on March 1 with daily roundtrip flights between Seattle and San Diego, and Seattle and Los Angeles. The airline’s second 737-9 is expected to enter service later in March.

Teams from across various divisions at Alaska will now follow a strict readiness timeline that guides the actions that must be taken before the start of passenger flights. The process – involving rigorous rounds of test flying, verifying and specific preparations – will take five weeks:

  • Maintenance technicians will undergo training to become even more acquainted with the new aircraft. They will receive at least 40 hours of “differences training,” which distinguishes the variations between the new MAX and the airline’s existing 737 NG fleet. Certain technicians will receive up to 40 additional hours of specialized training focused on the plane’s engines and avionics systems. 
  • Alaska’s pilots will put the 737-9 through its paces, flying it more than 50 flight hours and roughly 19,000 miles around the country, including to Alaska and Hawaii. These “proving flights” are conducted to confirm our safety assessments and those of the Federal Aviation Administration (FAA), and to ensure a full understanding of the plane’s capabilities in different climates and terrain. 
  • Our pilots will receive eight hours of MAX-specific, computer-based training prior to flying the aircraft over the course of two days, which includes at least two hours of training in Alaska’s own certified, state-of-the-art MAX flight simulator. That’s where they fly several maneuvers specific to the aircraft and better understand the improvements that have been made to the plane.

Deliveries of Alaska’s 737-9 aircraft by Boeing will be flown with sustainable aviation fuel (SAF), which helps the aviation industry reduce CO2 emissions on a life-cycle basis. The SAF will be used on all MAX aircraft deliveries and will be supplied by Epic Fuels. 

Alaska announced a restructured order agreement with Boeing in December 2020 to receive a total of 68 737-9 MAX aircraft in the next four years, with options for an additional 52 planes. The airline is scheduled to receive 13 planes this year; 30 in 2022; 13 in 2023; and 12 in 2024. The agreement incorporates Alaska’s announcement last November to lease 13 737-9 aircraft as part of a separate transaction.

These 68 aircraft will largely replace Alaska’s Airbus fleet and move the airline substantially toward a single, mainline fleet that’s more efficient, profitable and environmentally friendly. The 737-9 will enhance the guest experience and support the company’s growth.

Alaska Airlines receives delivery of its first Boeing 737-9 MAX aircraft on Jan. 24, 2021.

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