Alaska Airlines will deepen previously announced flight reductions and has instituting a hiring freeze among other cost containment steps.
The carrier now plans to immediately reduce system-wide capacity for April by 10% and another 15% for May. Alaska said it would monitor demand and make additional capacity reductions on a 15-day rolling basis as needed.
“This situation is rapidly evolving, and passenger demand has continued to deteriorate, resulting in extremely soft new bookings and unprecedented levels of cancellations,” said Alaska spokesman Daniel Chun.
In an 8-K, the company also announced other cost mitigation efforts:
>> Pursuing additional borrowing of approximately $500 million;
>> Suspending at least $300 million of its capital spending, largely through the deferral of pre-delivery aircraft payments and certain non-aircraft capital project;
>> Chief Executive Officer Brad Tilden President Ben Minicucci have reduced their base salaries to zero effective March 7;
>> Suspending share repurchases;
>> Offering employees unpaid leaves of absence for 30-, 60- and 90-day time frames;
>> Freezing hiring across the company except to fill essential front line and management roles.