Alaska Airlines is reducing its April and May flight schedule by 70 percent and is planning for substantial reductions for at least the next several months.
Alaska said US carriers were seeing demand reductions of more than 80 percent as lockdowns and fears about the coronavirus sweep across the country.
It said flight schedules for June and beyond would be based on demand “but it is our expectation that reductions will be substantial for at least the next several months”.
“Alaska’s goal, since the onset of this outbreak, has been to keep our employees and guests safe and healthy, and to ensure that our airline is here to support and serve them in the future,” said Alaska chief executive Brad Tilden.
“But we also know that given the lack of demand for air travel and profound impact on the financial management of our business, hard work and aggressive control of costs and cash are required, even with additional support.”
Shares in Alaska and other US carriers jumped Wednesday on the news an agreement had been reached on Capitol Hill to pass a $US2 trillion stimulus package that contains $50 billion support for airlines.
However, the airline said it was taking action to improve liquidity and reduce spending by suspending its cash dividend and share buy-back program, drawing down $US400m on its line of credit and securing an additional secured loan for $US425m.
Tilden and Alaska president Ben Minicucci are foregoing their pay and other managers are taking cuts of between 20 percent and 50 percent.
Employees are being asked to take a voluntary leave of absence but are being offered health and travel benefits if they do.
Pay increases have been suspended, hours are being cut and contractors and temporary workers are being released.
“These actions are unprecedented, but these are truly unprecedented times,” said Tilden. “Alaska has been here for 88 years to serve our customers and communities and to provide good jobs for our people.
“It is imperative that we act swiftly and courageously to ensure that we’re here to continue our mission in the future.”