Alaska Airlines set to get $100 million in federal aid

Posted: Sunday, September 23, 2001

ANCHORAGE (AP) -- Alaska Airlines and its sister carrier, Horizon, are in line to get about $100 million if the federal aid package for airlines is approved.

The $15 billion measure approved by the Senate Friday calls for $5 billion in cash aid and $10 billion in loan guarantees for the industry.

The aid formula is based on the number of passenger miles airlines flew in August, according to Jack Walsh, a spokesman for Alaska Airlines. Alaska and Horizon, both owned by Alaska Air Group, represent about 2 percent of the industry's total.

Alaska Airlines is losing in excess of a million dollars a day currently, Walsh said, after suffering about $8 million in losses for just the two days last week when the airline was shut down.

The Seattle-based carrier is running about 75 percent of its flights right now, and they're only about half-full, Walsh said. Normally, about 70 percent of the seats are filled.

The airline has had a number of cancellations, and bookings at the Alaska Air reservation center are running at about half the normal rate, he said.

With the huge cost of a jet plane, it's expensive for them to sit on the ground. Most of an airline's costs are fixed costs that keep piling up even when planes aren't flying, Walsh noted.

But while other carriers are letting thousands of workers go, ''right now layoffs would only be a last resort'' for Alaska Airlines, Walsh said.

The carrier has been running virtually all of its flights in the state of Alaska this week, but only about 75 percent of its normal operations across the system.

The airline plans to boost its schedule to 80 percent of the normal level on Saturday, and ramp up to about 85 percent within the next week. Horizon, which flies smaller planes on shorter routes, is planning a fall schedule that's about 75 percent of normal.

Alaska Airlines has a strong cash position, unlike most of its competitors, and has only a single flight to the East Coast. That flight, however, is supposed to go to Reagan National Airport, which has been closed indefinitely.

''Right now,'' Walsh said, ''a lot depends on passenger confidence in the safety of the airways. That will depend on what the government does in the coming days.''

Alaska Airlines agrees with the other major carriers that the airport security checkpoints should be federalized. The issue is one of national security, not industry security, at this point, he said.

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