September 15, 2008

Alaska Airlines to Slash Capacity By 8%, Announces Staff Cuts

Alaska Airlines has announced that it is reducing capacity by 8%, compared to 2007, effective November 9, 2008, and continuing into 2009. The reduction in capacity represents 15% fewer departures and as a result, the airline is reducing its work force by 9% to 10%.

Alaska Airlines is trimming its schedule by canceling low-demand flights on Saturdays and holidays, and by reducing flights, typically one roundtrip-a-day in high-frequency markets, including Seattle-Bay Area and Seattle-Southern California. However, the airline will fly one extra daily Seattle-San Francisco and Seattle-Los Angeles roundtrip.

The airline will end seasonal service on three Mexico routes, between San Francisco and Cancun, Mazatlan and Ixtapa-Zihuatanejo. Alaska Airlines continues to serve these destinations non-stop from Los Angeles, and operates a daily seasonal non-stop flight between Seattle and Cancun.

The airline has also ended service between Portland and Orlando, and between Vancouver and San Francisco. Alaska Airlines continues to fly two daily roundtrips between Seattle and Orlando.

The effect of a smaller schedule on Alaska Airlines's work force includes a previously announced management headcount reduction of 80 positions. The company will eliminate 850 to 1,000 operational positions, including pilots, flight attendants, aircraft technicians, and reservations, customer service and ramp agents.

Bill Ayer, chairman and CEO of the Alaska Air Group, said: "The one-two punch of record oil prices and a softening economy, on top of increased competition, has burdened the Alaska Air Group with a $50 million loss on an adjusted basis for the first half of 2008. We are changing our schedule to make sure we are flying the right routes with the right frequency and right aircraft. Regrettably, a reduced schedule means we need fewer employees."