Alaska Air Swings to Loss as March 'Cancellations Overwhelmed Bookings'

Alaska Air reported a loss in the face of the coronavirus. March "cancellations overwhelmed new bookings," the carrier said.
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Alaska Air Group  (ALK) - Get Report on Tuesday swung to a first-quarter loss stemming from the "unprecedented impact" of the economic shutdown driven by the coronavirus pandemic.

Shares of the Seattle carrier at last check were up 0.2% at $28.84.

The air carrier swung to a net loss of $232 million, or $1.87 a share, from net income of $4 million, or 3 cents a share, in the year-earlier period. 

The adjusted loss came to 82 cents a share, narrower than the FactSet consensus forecast of a deficit of 95 cents a share.  

Revenue totaled $1.64 billion, down 13% from $1.88 billion a year ago, and missing the FactSet estimate of $1.73 billion.

"The impacts of Covid-19 on our business have been unprecedented," the company said in a statement. "Demand deterioration began in February, and in March cancellations overwhelmed new bookings. Today demand remains over 90% below normal levels."

Alaska Air said it introduced new measures in response to the outbreak, including requiring face masks for passengers starting May 11. 

As of Tuesday, employees who cannot maintain six feet of social distance from passengers or coworkers were required to wear masks.

The company will also be blocking out middle seats on large aircraft and aisle seats on small aircraft through May 31.

The airline industry has been hit hard by the coronavirus outbreak. On Monday, the investor Warren Buffett told investors at the annual meeting of his Berkshire Hathaway  (BRK.A) - Get Report investment group that he's disposed of all his holdings in the sector in the wake of the coronavirus pandemic.

Buffett said the airline business has "changed in a very major way" that will leave carriers more indebted and with fewer commercial passengers and "too many planes."

Separately, United Airlines Holdings  (UAL) - Get Report is reportedly planning massive job cuts when rules linked to its government rescue plans expire at the end of September.

Reuters said the company planned to cut at least 3,400 management and administration positions in October, some 30% of that sector's headcount.

The Chicago carrier also warned that a similar percentage of its 12,250 pilots could be laid off as well, since near-term travel demand remains "essentially zero."

United Airlines shares were recently off 1.6% at $24.85.