Alaska Airlines Owes Nearly $600 Million in Credits to Travelers
Jun 8, 2020, 9:36 pm
#1
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Original Poster
Join Date: Jun 2000
Location: Benicia CA
Programs: Alaska MVP Gold 75K, AA 3.8MM, UA 1.1MM, enjoying the retired life
Posts: 31,849
Alaska Airlines Owes Nearly $600 Million in Credits to Travelers
To keep cash, most U.S. airlines have pushed travel credits, not refunds, for travelers affected by Covid-19. It’s better than returning money to customers, but for airlines, those credits create their own liabilities.
Alaska Airlines told investors last week it has between $500 million and $600 million in outstanding travel credits, about 10 times more than usual. Perhaps more concerning, the airline does not know how consumers will use them.
Airlines executives typically do not divulge such details in public, so Alaska’s revelation offers insight into yet another hurdle carriers face during this pandemic.
Alaska Airlines told investors last week it has between $500 million and $600 million in outstanding travel credits, about 10 times more than usual. Perhaps more concerning, the airline does not know how consumers will use them.
Airlines executives typically do not divulge such details in public, so Alaska’s revelation offers insight into yet another hurdle carriers face during this pandemic.
I finished up all my prepaid Alaska travel last week of February for the winter, so no credits for me. Had international award travel for March and May with miles that was fully refunded, including taxes.
Jun 9, 2020, 9:30 pm
#7
Join Date: Jun 2015
Location: Seattle, WA
Programs: Alaska Airlines
Posts: 659
https://www.seattletimes.com/busines...million-a-day/
They have $2.8 billion in cash reserves or "short term investments" as of June 1st.... I'm assuming that includes the $992 million of bailout assistance in April.
The good news of the article is that they seem to be exceeding their plan to cut the burn rate... but they're still in the negative expecting to burn $200 million in June. As expected, March was the worst since they couldn't react fast enough, at $400 million burnt.
Hopefully they can get the burning under control because if they go bankrupt or have to dip into the Mileage Plan, they'll lose any concept of loyal frequent flyers in my lifetime.