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Alaska Airlines sees coronavirus as an opportunity to 'rerack' its route map

July 23, 2020
5 min read
Alaska Airlines sees coronavirus as an opportunity to 'rerack' its route map
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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 Airlines is adding 12 new routes from LAX in 2020, with service on eight beginning this fall and winter. (Image courtesy of Alaska Airlines)
Alaska Airlines is adding 12 new routes from LAX in 2020, with service on eight beginning this fall and winter. (Image courtesy of Alaska Airlines)

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.

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“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

Featured image by An Alaska Airlines E175 at Portland International Airport. (Photo by Edward Russell/TPG)

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Best for the well-traveled foodie
TPG Editor‘s Rating
Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
Go to review

Rewards Rate

4XEarn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S.
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    Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

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    $250
  • Recommended 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.

    670-850
    Excellent/Good

Why We Chose It

There's a lot to love about the Amex Gold card. It's been a fan favorite during the pandemic because of its fantastic rewards rate on restaurants (that includes takeout and delivery in the U.S.!) and U.S. supermarkets. If you're hitting the skies soon, you'll also earn bonus points on travel. Paired with up to $120 in Uber Cash (for U.S. Uber rides or Uber Eats orders) and up to $120 in annual dining statement credits at eligible partners, there's no reason that the foodie shouldn't add this card to their wallet. Enrollment required.

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Cons

  • Weak on travel outside of flights and everyday spending bonus categories
  • Not as useful for those living outside the U.S.
  • Some may have trouble using Uber/food credits
  • Few travel perks and protections
  • Earn 60,000 Membership Rewards® points after you spend $4,000 on eligible purchases with your new Card within the first 6 months of Card Membership.
  • Earn 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X).
  • Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • $120 Uber Cash on Gold: Add your Gold Card to your Uber account and each month automatically get $10 in Uber Cash for Uber Eats orders or Uber rides in the U.S., totaling up to $120 per year.
  • $120 Dining Credit: Satisfy your cravings and 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, Milk Bar and select Shake Shack locations. Enrollment required.
  • Choose the color that suits your style. Gold or Rose Gold.
  • No Foreign Transaction Fees.
  • Annual Fee is $250.
  • Terms Apply.
  • See Rates & Fees