Alaska Airlines doesn't avoid post 9-11 fiscal losses

Posted: Wednesday, September 11, 2002

FAIRBANKS (AP) -- Before last September it looked as if Alaska Airlines was one of a few commercial airlines in the nation that was avoiding, however slimly, the financial crises other air carriers were facing.

But by the end of 2001's fourth quarter, Alaska lost $36.4 million, the lion's share of the company's year end loss of $39.5 million.

''9-11 was the right hook after the bell,'' said Jack Evans, Alaska Airlines spokesman.

According to the Air Transport Association, the nation's airlines lost $7.7 billion in 2001. A year after Sept. 11 and while still losing money, Alaska is still faring better than its counterparts.

The airline avoided layoffs, added new routes and moved aggressively to establish itself in cities where the opportunity to do so existed, Evans said. The company was one of the first airlines to get back to running 100 percent of its pre-Sept. 11 schedule and first to secure its cockpit, using crossbars and bulletproof doors.

One reason the airline did better than most is because most of the company's routes run from the north to the south. Other airlines depended on East to West coasts routes and their passengers quit traveling. Alaskans, Washingtonians and Californians traveled more frequently than others after Sept. 11, he said.

''We've got a tremendously loyal customer base,'' he said. Alaska also benefited from leisure travelers, while business travelers across the country stayed home.

Alaska's figures for 2002 are good compared to the rest of the industry, but they are poor enough for concern, said Bill Ayer, Alaska's president.

''Through the first six months of the year we racked up a hefty loss of $39 million,'' he wrote in a column featured on Alaska Airline's employee Web site.

''There is no chance we'll be profitable this year and, given the current state of affairs, 2003 looks iffy,'' he said.

Despite that outlook, the company plans to grow -- 9 percent this year and 8 percent in 2003. By adding more flights, Alaska will spread its fixed costs over a broader range of passenger revenue, Ayer reasoned. The growth will be centered out of Anchorage, Seattle, and Los Angeles, he said.

Alaska will offer flights from Seattle to New York and Newark, N.J. on Oct. 28 and flights to Miami on Nov. 21. The airline added flights to Denver, Boston and Washington D.C. this past year.

Ayer reiterated that the company wants to avoid layoffs and pay cuts, preferring instead to look discretionary spending cuts. If need be, the company will consider offering less customer service, if that's what competitors are offering, he said.

''Provided that we maintain our margin of difference over other carriers,'' he said.

Ayer cited Alaska's strong balance sheet which includes $665 million in cash and marketable securities.

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