Alaska Airlines yesterday said revenue will decline because of its decision last week to cut some flights from its summer schedule. The Seattle-based airline, a...
Alaska Airlines yesterday said revenue will decline because of its decision last week to cut some flights from its summer schedule.
The Seattle-based airline, a unit of Alaska Air Group, on June 10 said it would cut 16 flights to ensure it will have spare planes amid an unusually high rate of flight cancellations and delays. Flights were disrupted partly because the airline was using new, inexperienced workers, spokeswoman Caroline Boren said yesterday.
Cutting the flight schedule allowed the carrier to reduce overall cancellations and improve on-time performance, the company said. The airline’s reduction in flights represents about 3.5 percent of the airline’s third-quarter capacity, Alaska said in a regulatory filing.
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“We do expect some negative impact to revenue during the summer months, although the impact cannot be quantified at this time,” the company said in the filing.
“It’s important to get on-time performance back up so they don’t alienate their customers,” said Jamelah Leddy, an analyst with McAdams Wright Ragen in Seattle.
The disruptions began after Alaska Air last month fired 472 Seattle bag handlers and fleet workers and hired a contractor to provide replacement workers. The airline has been trying to cut costs to stem losses and has been unable to negotiate a new contract with the bag handlers’ union.
Higher passenger loads as the airline moved into a summer schedule also contributed to disruptions, Boren said.
Separately, the company and the Aircraft Mechanics Fraternal Association, which represents 700 workers at the airline, said yesterday in a joint statement that they reached a tentative agreement on a new four-year contract. The contract includes wage increases, the union said. Further details won’t be released before a worker vote on the contract.
The airline said in the filing that it expects “a substantial restructuring charge in the second or third quarter” for severance payments and other costs as a result of switching to the new bag-handling contract in Seattle. The company said previously that it expected to save $13 million a year by contracting out the work.
The company won’t know the financial impact of the change until it reaches agreement with the International Association of Machinists on a new contract for about 480 remaining bag handlers employed outside of Seattle. The airline is also still in talks with the union on a contract for about 2,800 customer-service agents and clerical workers.