As the coronavirus pandemic cut passenger traffic by more than 90%, Alaska Air Group, the parent company of Alaska Airlines, on Tuesday reported a first-quarter loss of $232 million.
Alaska CEO Brad Tilden said the airline industry faces "one of the greatest challenges in the history of commercial aviation."
He said a priority is to reduce the rate at which the company is burning through cash, which hit $400 million for the month of March.
By cutting out advance payments to Boeing, parking 80% of its jet fleet, reducing salaries of senior management and offering voluntary leave incentives that were accepted by more than 5,000 employees, the company reduced the cash burn to $260 million in April and has set a goal of reducing it further to $200 million next month.
Alaska accepted a $992 million grant from the U.S. government's Coronavirus Aid, Relief and Economic Security (CARES) Act Payroll Support Program, which will ensure employees are retained and paid through the end of September.
That money swelled the company's available cash to $2.9 billion. It has also drawn $400 million from existing credit facilities, executed an agreement for a further $425 million 364-day term loan facility, and obtained an additional $50 million in secured financing on April 22.
In addition, Alaska has applied for a separate loan through the CARES Act, which would give it the option to access up to $1.1 billion in federal loans through the end of September.