Alaska Air Latest US Airline To Slow Growth

Grounded regional aircraft are forcing the airline to stay conservative on capacity.

Credit: Joe Pries

Alaska Air Group is being forced to cut its capacity further for this year as staffing challenges at its regional partners–including wholly owned affiliate Horizon Air–show no signs of improving.  

During a July 21 earnings call, Alaska CEO Ben Minicucci said the US industry’s regional capacity is down 20% to 30% compared with 2019. 

Seattle (SEA)-based Alaska has removed 35% of block hours covered in capacity purchase agreements with its regional partners for the remainder of this year compared with 2019, said chief commercial officer Andrew Harrison. That will impact Alaska’s capacity in the second half of the year by approximately three percentage points. 

In its latest guidance, Alaska expects full year 2022 capacity to be down 8% to 9% compared with 2019 levels. Previously, the company estimated its capacity in 2022 would flat to down 3%. 

“We expect these headwinds to persist well into 2023,” said Harrison. 

Alaska is suspending service in a limited number of markets through the spring of next 2023. 

Alaska plans to shed its De Havilland Dash 8-400s operated by its wholly owned reHorizon by the end of next year, and earlier this week Alaska placed an order for eight Embraer 175s. 

Horizon Air president Joe Sprague explained the carrier’s plans to shed the -400s will make the airline smaller in the near term. But that would allow the airline to rebuild its fleet size in tandem with “rebuilding our pilot staffing capability over the next few years.”