Alaska Airlines sees coronavirus as an opportunity to 'rerack' its route map
Alaska Airlines is not sitting on its laurels waiting for travelers to come back amid the coronavirus pandemic, which its executives call the "biggest demand contraction" in the carrier's history.
Instead, the Seattle-based carrier is moving forward on a number of major initiatives, including joining the Oneworld alliance and a "rerack" of its route map to places where it is strong, Alaska Air CEO Brad Tilden said during a second quarter earnings call on Thursday.
All of these come even as Alaska prepares to be around 20% smaller next summer than it was in 2019. Even looking ahead, the airline does not expect travel to fully recover for at least two years — or well into 2022.
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The crisis "does give us a chance to rerack the route network," Tilden said in response to questions on how Alaska plans to use the downturn. The shifts give the airline a chance to "build the network around what we do best.”
Since the pandemic began, Alaska has unveiled eight new routes from its Los Angeles (LAX) hub. Most are to destinations primarily in the West where it already has a strong presence — places like Bozeman, Montana (BZN), Eugene, Oregon (EUG), and Spokane, Washington (GEG).
However, no big sweeping overhauls are planned. Tilden noted the map shift back to markets along the West Coast was already in the works prior to the crisis.
Related: Alaska Airlines makes bigger play for Los Angeles with 8 new routes from LAX
Alaska is far from the only airline making changes to its map. Delta Air Lines has downgraded crew bases at its former Cincinnati (CVG) hub and JetBlue Airways will end service to its former West Coast base in Long Beach (LGB) in October. United Airlines executives have said that no hub is "sacred" as it tries to push through the crisis.
“There is a re-baselining of the nation’s [airline] networks," said Alaska chief commercial officer Andrew Harrison on Thursday.
Related: How will airlines rebuild their route maps after the coronavirus?
Alaska lost $439 million before special items in the second quarter. Many of the airline's core markets, including California and Seattle, were hit early by COVID-19, though infections in those locations had subsided before their current resurgence. As that unfolded, Alaska reduced its flying during the April-through-June to just about a quarter of what flew during the same period in 2019.
"We were on a really nice clip thru the July 4 weekend… but as the narrative changed and the headlines changed, I think every airline has seen softness in bookings for future travel," said Tilden.
Tilden views consumer confidence as key to getting travelers back on planes. The airline requires all passengers 12 and older to wear masks onboard flights. It also has rolled out an intensive cleaning regime it calls Next Level Care in order to prevent the spread of COVID-19.
Related: Alaska Airlines will officially be the next Oneworld alliance member
With the recovery in air travel seemingly stalled, Alaska is preparing to notify staff of possible furloughs on Aug. 1. Airline executives did not say how many notices they will send, but noted that under their current forecast the carrier needs around 7,000 fewer employees — or about 30% of its 23,000-strong workforce —by the end of the year.
American Airlines has warned 25,000 staff members of possible furloughs, United 36,000 employees and Delta more than 2,500 pilots. American and United are backing union-led efforts to extend employment protections under the federal government's coronavirus aid package, or CARES Act, through March 2021.
In the quarter ahead, Alaska plans to fly about half of what it flew a year ago during July, August and September.
Related: United is latest to back union-led effort to extend coronavirus employment protections
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There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
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- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
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- Annual Fee is $325.
- Terms Apply.
Rewards Rate
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 3X | Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com. |
| 2X | Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com. |
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Intro Offer
You may be eligible for as high as 100,000 Membership Rewards® Points after spending $6,000 in eligible purchases on your new Card in your first 6 months of Membership. Welcome offers vary and you may not be eligible for an offer.As High As 100,000 points. Find Out Your Offer.Annual Fee
$325Recommended Credit
Credit ranges are a variation of FICO® Score 8, one of many types of credit scores lenders may use when considering your credit card application.Excellent to Good
Why We Chose It
There’s a lot to love about the Amex Gold. It’s a fan favorite thanks to its fantastic bonus-earning rates at restaurants worldwide and at U.S. supermarkets. If you’re hitting the skies soon, you’ll also earn bonus Membership Rewards points on travel. Paired with up to $120 in Uber Cash annually (for U.S. Uber rides or Uber Eats orders, card must be added to Uber app and you can redeem with any Amex card), up to $120 in annual dining statement credits to be used with eligible partners, an up to $84 Dunkin’ credit each year at U.S. Dunkin Donuts and an up to $100 Resy credit annually, there’s no reason that foodies shouldn’t add the Amex Gold to their wallet. These benefits alone are worth more than $400, which offsets the $325 annual fee on the Amex Gold card. Enrollment is required for select benefits. (Partner offer)Pros
- 4 points per dollar spent on dining at restaurants worldwide and U.S. supermarkets (on the first $50,000 in purchases per calendar year; then 1 point per dollar spent thereafter and $25,000 in purchases per calendar year; then 1 point per dollar spent thereafter, respectively)
- 3 points per dollar spent on flights booked directly with the airline or with amextravel.com
- Packed with credits foodies will enjoy
- Solid welcome bonus
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 3X Membership Rewards® points per dollar spent on flights booked directly with airlines or on AmexTravel.com.
- Earn 2X Membership Rewards® points per dollar spent on prepaid hotels and other eligible purchases booked on AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- $120 Uber Cash on Gold: Add your Gold Card to your Uber account and get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an American Express Card for your transaction. That’s up to $120 Uber Cash annually. Plus, after using your Uber Cash, use your Card to earn 4X Membership Rewards® points for Uber Eats purchases made with restaurants or U.S. supermarkets. Point caps and terms apply.
- $84 Dunkin' Credit: With the $84 Dunkin' Credit, you can earn up to $7 in monthly statement credits after you enroll and pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment is required to receive this benefit.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year after you pay with the American Express® Gold Card to dine at U.S. Resy restaurants or make other eligible Resy purchases. That's up to $50 in statement credits semi-annually. Enrollment required.
- $120 Dining Credit: Satisfy your cravings, sweet or savory, with the $120 Dining Credit. Earn up to $10 in statement credits monthly when you pay with the American Express® Gold Card at Grubhub, The Cheesecake Factory, Goldbelly, Wine.com, and Five Guys. Enrollment required.
- Explore over 1,000 upscale hotels worldwide with The Hotel Collection and receive a $100 credit towards eligible charges* with every booking of two nights or more through AmexTravel.com. *Eligible charges vary by property.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.