Due to the massive downturn in air travel from the COVID-19 pandemic, Alaska Air Group, parent company of Alaska Airlines and Horizon Air, last year lost $1.3 billion, or $10.59 per share, according to financial results announced Tuesday.
That compares with a profit of $769 million, or $6.19 per share, the previous year.
In the fourth quarter, the airline lost $430 million, or $3.47 per share. That compares with a profit of $181 million, or $1.46 per share, in the final three months of 2019, the last quarter unaffected by the pandemic.
Air Group CEO Brad Tilden Tuesday projected the beginning of a recovery this year.
To help make it through the next three months, the airline reached an agreement with the U.S. Treasury this month for an extension of payroll support totaling $533 million. It received $266 million of that amount on Jan. 15.
As a condition of the extension, it won’t lay off any more employees or cut pay or benefits through the end of March.
Alaska ended the year with $5.2 billion in liquidity, consisting of $3.3 billion in cash and the rest in available loans.
Tilden insisted that the company’s strong cash position will allow the airline to survive the pandemic and that because the airline has a mostly domestic, low-fare business, it will recover faster than larger competitors with more exposure to international markets that are likely to take longer to come back.
“We are not out of the woods, but we are seeing signs of brighter days ahead,” he said in a statement.
“We’re positioned to come out of this crisis with our balance sheet unimpaired and our competitive advantages intact, and both of these set us up for a strong future and a long runway for growth,” he added.
For comparison, Alaska’s much larger rival, Delta Air Lines, announced earlier this month that last year it lost $12.4 billion, including $755 million in the fourth quarter.
As part of Alaska’s recovery plan, Tilden has committed to renew Alaska’s fleet with the newly ungrounded Boeing 737 MAX, getting rid of its less efficient Airbus A320s.
Alaska has 68 MAXs on order and took delivery of the first one on Sunday. That airplane is due to begin passenger service March 1, and the airline will have 13 MAXs in its fleet by year end.