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March 16, 2020, 12:42 p.m. EDT

Alaska Air to cut April capacity by 10%, suspends stock buybacks as part of COVID-19 response

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By Tomi Kilgore

Alaska Air Group Inc. /zigman2/quotes/200972303/composite ALK +5.62% disclosed a number of actions it was taking as a result of the COVID-19 pandemic, including an immediate reduction in April capacity by at least 10% and in May capacity by 15% from its original expectations. The air carrier said it was also pursuing additional borrowing of about $500 million; suspending at least $300 million worth of capital expenditures; suspending share repurchases, offering employees unpaid leaves of absences for 30, 60 and 90 day time frames; freezing hiring across the company; and has cut salaries of Chief Executive Brad Tilden and President Ben Minicucci to zero. The company said it expects to make other changes and take other cost cutting measures over the next several weeks as demand changes. The company said it has recently seen load factors decline through the month, as "materially fewer bookings" occur, offset by "significant cancellations." Typically, the company said load factors increase steadily in the month, leadikng up to the travel departure date. The stock, which tumbled 16.4% toward a 6 1/2-month low, has plummeted 52% over the past month, while the Dow Jones Transportation Average /zigman2/quotes/210598063/realtime DJT -0.04% has dropped 33% and the S&P 500 /zigman2/quotes/210599714/realtime SPX +0.38% has fallen 26%.

/zigman2/quotes/200972303/composite
US : U.S.: NYSE
$ 36.11
+1.92 +5.62%
Volume: 2.88M
June 1, 2020 4:00p
P/E Ratio
8.45
Dividend Yield
0.00%
Market Cap
$4.19 billion
Rev. per Employee
$353,525
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/zigman2/quotes/210598063/realtime
US : Dow Jones Indices
8,965.91
-3.88 -0.04%
Volume: 220.61M
June 1, 2020 5:27p
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/zigman2/quotes/210599714/realtime
US : S&P US
3,055.73
+11.42 +0.38%
Volume: 2.50B
June 1, 2020 5:27p
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