Alaska Airlines Loses $20 Million Due To Historic Winter Storms
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
While it’s easy to see the immediate impact of winter weather on commercial aviation, as airlines cancel flights and issue travel waivers, it’s not always as easy to see the long-term cost. February was a tough month for airlines, as dueling winter storms Maya and Nadia cancelled hundreds of flights from US coast to coast. At Alaska Airlines’ main hub of Seattle Tacoma International Airport, a record-breaking 14.1 inches of snow fell, making this the snowiest February in Seattle history.
Alaska just released a guidance update for investors, including a detailed analysis of the losses suffered due to the storm. Over a 10-day period, Alaska had to cancel 1,100 flights leading to a loss of about $20 million. This includes $15 million in lost revenue and $7 million in expected incremental costs, offset by a $2 million savings in fuel costs. Airlines measure their profits and costs against the number of available seat miles (ASMs) flown, and these flight cancellations led to a reduction of 95 million ASMs for the first quarter. All else being equal, this will drop Alaska’s first quarter revenue per ASM growth by .2% and increase its first quarter cost per ASM growth by .5%. The announcement also explains that Alaska’s revenue per available seat mile (RASM) was more heavily affected by the airlines reliance on regional flights:
“Canceled flights were disproportionately higher-RASM regional flights and the direct revenue impact will provide a modest headwind to our RASM for the quarter.”
Alaska’s stock, which is up slightly on the year, was relatively unaffected by the storms themselves, but it dropped 2.65% to $64.56 a share when this investor update was made public. Alaska is still forecasting first quarter revenue per available seat mile growth of 2.5%-4.5% relative to one year ago, though the impact of the storms and rising fuel costs are going to hurt the carrier’s bottom line.
Featured image by Benji Stawski / The Points Guy
Welcome to The Points Guy!
Earn 50,000 bonus miles and 5,000 Medallion® Qualification Miles (MQMs) after you spend $2,000 in purchases on your new card in your first three months of card membership. Plus, earn up to $100 back in statement credits for eligible purchases at U.S. restaurants with your card within the first 3 months of membership.
With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.
- Earn 50,000 bonus miles and 5,000 Medallion® Qualification Miles (MQMs) after you spend $2,000 in purchases on your new Card in your first 3 months.
- Plus, earn up to $100 back in statement credits for eligible purchases at US restaurants with your card within the first 3 months of membership.
- Accelerate your path to Medallion Status, with Status Boost®. Plus, in 2021 you can earn even more bonus Medallion® Qualification Miles (MQMs) to help you reach Medallion Status.
- Earn 3X Miles on Delta purchases and purchases made directly with hotels.
- Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
- Earn 1X Miles on all other eligible purchases.
- Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
- Enjoy your first checked bag free on Delta flights.
- Fee Credit for Global Entry or TSA Pre✓®.
- Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
- No Foreign Transaction Fees.
- $250 Annual Fee.
- Terms Apply.
- See Rates & Fees