ITEM 7.01. Regulation FD Disclosure

Alaska Air Group, Inc (Air Group) continues to experience demand that is significantly below normal levels as a result of the COVID-19 outbreak. Air Group remains committed to the health and safety of our guests and employees, and remains focused on building liquidity and dramatically reducing cash burn rate.

April 2020 flown capacity was approximately 78% below April 2019 levels, with approximately 15% load factor. May 2020 flown capacity was approximately 79% below May 2019 levels, with approximately 40% load factor. Reflecting the modest week over week improvements in demand, we plan to reduce June capacity 70% to 75% from prior year levels.

On May 22, 2020, we obtained $88 million in secured financing. We are working with the U.S. Treasury to finalize terms for McGee Air Services' (McGee) participation in the Payroll Support Program (PSP) made available under the Coronavirus Aid, Relief and Economic Security (CARES) Act, and anticipate that McGee will be eligible to receive approximately $29 million in PSP funding. We have also applied for $1.1 billion in federal loan funding through a separate program authorized under the CARES Act, and continue to work with the U.S. Treasury on the terms of that funding. As of June 1, 2020, Air Group had cash and short-term investments, of approximately $2.8 billion. This balance excludes any cash and short-term investments held at McGee and ASA Assurance, Inc.

Our cash burn measurement includes all operating cash receipts and disbursements, such as cash from bookings net of refunds, other operational cash in (loyalty, cargo, etc.), offset by all cash expenditures including debt service and capital expenditures. Cash burn excludes financing raised or payroll support funding. Air Group's cash burn rate for May was approximately $170 million, or $5.5 million per day. We continue to expect to achieve a $200 million per month cash burn rate in June, and remain focused on reducing it to zero by year end.

In accordance with General Instruction B.2 of Form 8-K, the information under this Item 7.01 shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such a filing. This report will not be deemed an admission as to the materiality of any information required to be disclosed solely to satisfy the requirements of Regulation FD.

ITEM 9.01 Financial Statements and Other Exhibits



(d) Exhibits.
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