Alaska Air Group, parent of Alaska Airlines, swung to a quarterly loss on Thursday on higher fuel costs and said it plans to cut mainline capacity later this year and again in 2009.
Among the changes, management personnel at the mainline carrier will be reduced by 5 percent, effective September 1. The company plans to have "more information" on how capacity cuts will impact other workers at that time.
Alaska Air Group's regional unit, Horizon Air, reduced its management work force by 13 percent earlier this year and will further reduce operational and management positions in connection with capacity cuts.
"We are keenly aware of the impact on our employees and regret having to take these actions," said Bill Ayer, Alaska Air Group's chairman and chief executive.
"Current fuel prices -- which are devastating for airlines and consumers alike -- require these measures to ensure the viability of our company," Ayer said.
Excluding special items that include charges for the transition to an all Boeing 737 fleet, the Alaska Air Group reported a loss of USD$14.1 million. That compared to 2007 net income of USD$47.2 million.
Alaska's mainline operating revenue per available seat mile increased 0.9 percent, and its operating cost per available seat mile, excluding fuel and the special items, increased 2.9 percent.
Alaska Air Group ended the quarter with USD$1 billion in cash and short-term investments.
Ayer announced that Alaska's fourth-quarter mainline capacity will decline by 5 percent from 2007 levels, and mainline capacity for 2009 will decrease by 5 percent to 10 percent, compared with 2008.
Source: http://news.airwise.com/story/view/1216928202.html