Alaska Air Earnings: Focusing on Cash Preservation
Like pretty much every other airline, Alaska Air (NYSE: ALK) has been hit hard by the COVID-19 pandemic this year. Last Thursday, the company reported a substantial revenue decline and a big loss for the second quarter of 2020.
However, the Alaska Airlines parent did an exceptionally good job of minimizing cash burn under the circumstances. Meanwhile, the company has been aggressively bolstering its liquidity with new borrowings. As a result, Alaska Air is positioned to survive the pandemic without compromising its long-term growth potential.
Alaska Airlines slashed its capacity nearly 75% year over year last quarter, as the pandemic caused air travel demand to virtually disappear in April. Revenue plunged by 81.6% to $421 million. This was actually a better result than what most other airlines have reported. However, given that Alaska could only reduce its adjusted operating expenses by 47%, the company still reported a big loss for the quarter.
Source Fool.com
