Alaska Airlines: Business Travel Recovery Accelerating

One quarter after projecting that business travel volume could recover to half of 2019 levels by year-end, a healthy demand boost in June has persuaded Alaska Airlines executives that the carrier could reach that benchmark earlier in 2021, they said Thursday during the carrier’s second-quarter earnings call. 

Meanwhile, passenger capacity at its Seattle hub for the second quarter was 2 percent higher than in the second quarter of 2019, and the carrier now flies about 80 percent of its pre-pandemic network, said Alaska Air Group EVP and chief commercial officer Andrew Harrison. The carrier plans to fully restore its network no later than the summer of 2022 and possibly earlier, president and CEO Ben Minicucci said.

Harrison said the carrier was “encouraged” by what he called “an acceleration of the return of business travel.” In the past three weeks, he said, indirect corporate bookings have reached 40 percent to 50 percent of 2019 levels, “and we’re optimistic this will continue to improve.” The carrier now expects to reach 50 percent of 2019 business travel volume “ahead of” the end of the year, Harrison said. 

The carrier’s entry into the Oneworld alliance and its partnership with American Airlines also has paid dividends in terms of access to corporate accounts, Harrison said. “To date, over 90 percent of Alaska’s top-tier corporate accounts have either executed or are expected to execute a joint contract with Alaska and American,” he said. 

In light of the increasing demand, Alaska in the fall and winter expects to temporarily reactivate 10 Airbus aircraft to help build capacity quickly, Minicucci said. The Covid-19 delta variant “may pose some risk in the recovery trajectory,” he said, but added that “to date, we are seeing no signs of demand slowing.”

Alaska Air Group’s passenger revenue increased 338 percent year over year to $1.35 billion in the second quarter. The carrier reported net income of $397 million for the second quarter, compared with a net loss of $214 million in the second quarter of 2020. The most recent quarter’s income included money from the federal Payroll Support Program, and excluding that and other special items, Alaska had a net loss of $38 million.

RELATED: Alaska Q1 earnings

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