Alaska Air sees travel demand declining in November, and cash burn increasing

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Shares of Alaska Air Group Inc. slipped 0.3% in premarket trading Thursday, after the air carrier provided a downbeat outlook for November, in which traffic and load factor are expected to decline from October while cash burn increases. The company said October total revenue fell 62% from a year ago after a 66% decline in September, and expects a decline of 60% to 65% in November. While October revenue passengers increased to 1,400 (down 64%) from 1,212 (down 68%) from September, passengers are expected to decline to 1,200 to 1,300 (down 65% to 70%) in November. Load factor improved from 47% in September to 49% in October, but is expected to decline to 40% to 45% in November. October cash burn was 97% million, which was lower than September because of improved ticket sales, but cash burn for November is expected to increase to $125 million to $150 million amid a softening in demand. “We believe that renewed restrictions by many state and local governments have negatively impacted demand in the immediate term,” the company said in a statement. “Future booking patterns remain difficult to predict given continued uncertainty in COVID-19 cases and timing of available vaccines and treatments.”
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