Reduced Demand Could Leave Alaska Airlines With 3,000 Surplus Staff

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In a webcast Thursday, Alaska Airlines’ President told staff that the company might have to cut 3,000 jobs by 2021 as a result of reduced passenger demand. That would mean a reduction of its workforce by as much as 13%.

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Alaska Airlines could be cutting 3,000 jobs due to decreased travel demand. Photo: Alaska Airlines

Working assumption without details

In an internal webcast, the details of which were obtained by Puget Sound Business Journal, Alaska Airlines President Ben Minicucci told the company’s workers that there might be 3,000 less of them in 2021. Although, he emphasized that this is a working assumption that may change according to circumstance.

At its lowest point in March this year, the SeaTac-based airline carried less than 5,000 people per day. On Wednesday, it greeted 22,000, which is, while a distinct improvement from two months ago, 85% less than the same time in 2019.

“Our current working assumptions – and that’s all they are – are that we will operate about 20% less capacity during the summer of 2021 than we did in 2019, and that could mean operating with about 3,000 fewer people across all parts of Air Group,” Minicucci told staffers.

He did not provide any details as to how many pilots, flight attendants, ground crew and maintenance workers would be affected. However, staff would be informed of specific workgroup numbers by July 30th.

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Airline President Ben Minicucci told staff he wanted to provide as much clarity as possible despite the uncertainty of the situation. Photo: Alaska Airlines

Tough winter ahead

Minicucci further stated that he and CEO Brad Tilden did not believe that demand would be back to 2019 levels through at least the summer of 2021. He suggested this winter would be the toughest (apart from the actual peak of the restrictions, one would assume) with Alaska flying at 35% to 50% lower capacity than 2019.

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Alaska Air Group, which includes mainline carrier Alaska Airlines and regional Horizon Air, has received $992 million through the Coronavirus Aid, Relief and Economic Security (CARES) Act.

The conditions for the government-assisted funding, part loans and part payroll grants, prohibits airlines from making any layoffs until October 1st. The carrier has reportedly applied for another $1.1 billion in aid from the Federal Treasury.

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“There’s still a lot we still don’t know for sure: When will our states open? How fast will people return to travel? How deep will economic impacts be of Covid-19?” Minicucci added, saying that it would not be fair or responsible to try and provide certainty too soon.

Alaska Airlines expects to operate at between 35% and 50% of capacity this winter. Photo: Alaska Airlines

Retired aircraft and staff on unpaid leave

The airline recently revealed dismal results for the first quarter of 2020. Net losses equaled $102 million, while capacity during April dropped 80% compared to the same month last year. It also retired 12 Airbus aircraft, all ten of its A319s and two A320s, all inherited from Virgin America four years ago, in early May.

The carrier has also suspended $500 million in capital spending, mostly by deferring pre-delivery payments for new aircraft. It has also confirmed that more than 5,000 of its staff had taken voluntary and unpaid leave as of last month.

Simple Flying has reached out to Alaska Airlines for a comment but was yet to receive one at the time of publishing.

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