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Alaska Airlines Announces 2020 Financial Results, Receives First 737 MAX
Just two days after taking delivery of their first Boeing 737-9 MAX aircraft, the Alaska Air Group has announced their fourth quarter and full year earnings for 2020. Like other airlines in the United States around the globe, Alaska felt the impacts of COVID-19, posting losses both quarterly and annually.
The Seattle-based carrier reported losses of $430 million for the fourth quarter following Generally Accepted Accounting Principles (GAAP). For the year, the airline saw losses of $1.3 billion.
Higher operating revenues for the Air Group were offset by higher costs, most significantly a drop in the amount of wages offset by the Payroll Support Program. In the third quarter the group reported $398 million in wage offsets from the payroll program, but it had just $22 million offset in the fourth quarter.
In a press release, Alaska Air Group CEO Brad Tilden said, “We are not out of the woods, but we are seeing signs of bright days ahead…We’re positioned to come out of this crisis with our balance sheet unimpaired and our competitive advantages intact, and both of these set us up for a strong future and a long runway for growth.”
The airline’s losses were very similar to those reported in the third quarter of 2020, improving by just one million dollars in the latter quarter. While losses only improved slightly in the third quarter, the airline did see an increase in passenger revenue up to $657 million for the three month time period ending on Dec. 31, 2020.
The airline saw 3.9 million revenue passengers in the fourth quarter and 17.9 million passengers for the entire calendar year. While the overall load factor fell too in the fourth quarter, it still sat at 45.3%, just three percent lower than the third quarter. Overall, the yearly load factor sat at 55.2%, largely on the back of a strong first quarter load factor.
First 737 MAX for Alaska Airlines
Mainline Alaska’s fleet sits at 197 aircraft, down 40 from the end of 2019. However, on Jan. 24, Alaska took delivery of its first 737-9 MAX aircraft from Boeing. The airline’s newest aircraft arrived at a cloudy Seattle-Tacoma International Airport and was presented to top leadership at the carrier’s maintenance hangar.
Alaska Airlines President Ben Minicucci said, “We’ve eagerly waited this day. It was a proud moment to board our newest 737 aircraft and fly it home. This plane is a significant part of our future. We believe in it, we believe in Boeing and we believe in our employees who will spend the next five weeks in training to ensure we’re ready to safely fly our guests.”
The specific airframe, registered N913AK, has been off of the production line for over a year and a half. However, delivery was delayed due to the nearly-two-year-long grounding of the 737 MAX type.
Alaska Airlines has planned for the new aircraft to enter service on March 1 with flights to both San Diego and Los Angeles from Seattle. These flights are currently scheduled to last the entire month of March, with a second MAX expected into service in late March.
After initial introduction the aircraft is expected to be deployed on longer routes around the country. Alaska currently has 68 of the 737-9 on order with the airframes set to replace the airline’s Airbus fleet.
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