Alaska Air Group (ALK) provides January results and expectations for the first quarter

February 24, 2021 6:26 AM EST
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Price: $70.22 -1.51%

EPS Growth %: -357.3%

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Alaska Air Group (NYSE: ALK) disclosed:

The public health and economic crises resulting from the outbreak of COVID-19 have dramatically impacted demand for air travel and driven significant change to our business operation and performance. From the beginning of these crises, the recovery path has been volatile and difficult to predict. If circumstances no longer support the plans we have established, our expectation for these metrics could change.
The table below provides January results and our expectations for the first quarter.
January Results(a)
Q1 Expectation(a)
Previous Q1 Expectation(c)
Capacity (ASMs) % change versus 2019(a)(b)Down ~37% Down ~30% Down ~30%
Revenue passengers % change versus 2019(a)Down 65% Down 55% to 60% Down 60% to 65%
Passenger load factor42% ~45% to 50% ~40% to 45%
Total revenue % change versus 2019(a)Down 62.5% Down 55% to 60% Down 60% to 65%
Cost per ASM excluding fuel and special items % change versus 2019(a)n/a Up ~20% Up ~20%
(a)Due to the unusual nature of 2020, all year-over-year comparisons are versus the comparable period 2019.
(b)Capacity guidance excludes the impacts of close in cancels that could occur as we monitor demand throughout the period.
(c)See investor update filed January 26, 2021.
LIQUIDITY EXPECTATIONS
Throughout 2020, we provided updates on cash burn, a measurement that includes all operating cash receipts and disbursements, such as cash from bookings net of refunds, other operational cash in (loyalty, cargo, etc.), plus investment earnings, offset by all cash expenditures, including normal debt service and capital expenditures. Cash burn excludes financing raised or payroll support funding. January cash burn was $137 million.
From this point forward we will no longer be providing guidance on cash burn, but will provide quarterly guidance for cash flow from operations, which we believe to be a more appropriate measure of the condition of our business in the next phase of recovery. We expect that our first quarter cash flow from operations, including funds related to the CARES Act Payroll Support Program grant, will be approximately negative $100 million to zero.


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