Expressing confidence that the effect of the omicron variant of Covid-19 will be limited to the first quarter of 2022, Alaska Airlines executives on Thursday said the carrier would match 2019 capacity levels by this summer and exceed them in the fall.
"Like our industry peers, Q1 will clearly be impacted by omicron both for revenues and unit costs," Alaska Airlines parent Alaska Air Group CEO Ben Minicucci said Thursday during the company's fourth-quarter earnings call. "We do believe that virus will move to endemic status and that demand will ultimately stabilize."
While the carrier's first-quarter capacity—cut recently on omicron staffing issues and concerns—will run 10 percent to 13 percent less than in 2019, capacity will rebound in the summer and fall and will end 2022 2 percent to 6 percent higher than full-year 2019 levels.
"We expect the bulk of the omicron impact to be felt in the first quarter, specifically in January and February," Minicucci said. "This will be short-term in nature and has not changed our expectations about the overall recovery."
Capacity out of Alaska's Seattle hub already exceeds pre-pandemic levels, EVP and chief commercial officer Andrew Harrison said, adding that "California demand has recovered more slowly than the rest of the network."
Alaska executives remain bullish about the possibility of a 2022 business travel demand rebound. Harrison noted the carrier has "not seen anywhere close to a full business demand recovery."
Alaska Air Group's fourth-quarter passenger revenue increased 161 percent year over year to $1.72 billion, compared with $2.06 billion in the fourth quarter of 2019. The carrier reported net income of $18 million for the fourth quarter of 2021, compared with a net loss of $478 million in the fourth quarter of 2020.
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