Alaska Air Group’s business travel bookings for the second quarter are at 60 percent of 2019 levels so far, the company reported Thursday during an investor day conference in New York.
In addition, as part of its 2025 strategic plan, the company targets about $ 135 million of incremental revenue from its network and alliances, with corporate travel a key component of that figure, Alaska chief commercial officer Andrew Harrison said.
“One of the great things about the West Coast International Alliance, and the big Microsofts, Amazons and all the big companies, is they have to invite us in,” Harrison said, referring to Alaska’s alliance with American Airlines.
“Over 90 percent of all the major corporations have invited us in and said we want a joint deal that combines Alaska’s network with American Airlines’ network and have corporate deals as a single unit,” he said. “We have made huge inroads there. As business travel starts to come back, you’ll see goodness from that.”
Reiterating a common refrain regarding the correlation between corporate clients’ return to offices and business travel, Harrison said technology companies especially are “traveling back and forth and collaborating. We’ve seen a step change in business travel. I do not have a crystal ball, and we’ve always maintained we have a strong leisure component, but whatever business was before [the pandemic]”We think we’ll do better.”
He added that Alaska has joined the Global Business Travel Association and is getting “meaningful share” in partnership with travel management companies. Alaska’s 2021 entry into the Oneworld alliance also has expanded the carrier’s international options.
“A lot of members loved us domestically, but for long-haul would travel on a competitor,” Harrison said. “Today, with what we have done [with alliances]we can keep them in the family, and that will increase the ability to get corporate shares for long-haul. ”
Updated Guidance, Strategic Plan
Alaska announced that it is accelerating its transition to a single mainline fleet, with plans to retire all Airbus A320 aircraft by early 2023 and all A321 aircraft by the end of 2023. The carrier then solely will operate Boeing 737s for mainline operations and Embraer E175 jets for regional service. The company operated 311 aircraft in 2021 and expects to have 323 by 2023 and 396 by 2026. With the change in aircraft, Alaska plans to offer 62 percent more premium seats by 2026 compared to the number it offered in 2019.
The company also announced $ 2.3 billion in infrastructure upgrades to its hubs in Seattle, Portland, Ore., San Francisco and Los Angeles, adding more gates and updating lounges and lobbies.
For the first quarter, Alaska expects its capacity levels to be down 11 percent to 12 percent from 2019 compared to previous guidance of a 10 percent to 13 percent decline. Passenger revenue is expected to be down 17 percent to 18 percent from 2019, versus prior guidance of a 19 percent to 21 percent decline. Its passenger load factor is expected to 76 percent to 78 percent, compared with a precious estimate of 71 percent to 74 percent.
Full-year 2022 guidance includes a 1 percent to 3 percent increase in capacity compared to 2019. Previous guidance anticipated an increase of 2 percent to 6 percent.