Alaska Air Group, Inc. (NYSE:ALK) Q4 2022 Earnings Call Transcript

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Andrew Harrison: Yes. Savi, thanks for that. And I think it’s a great question because the first thing I will say is that even though the headlines are recent on these job cuts, we’ve been experiencing especially some really large tech companies, their corporate travel has already been severely depressed for some time now. So the corporate numbers that you see from us already include a lot of high-tech companies with that already, in some cases, nearly turned off their travel, but have severely depressed. So as we move forward, I don’t think these cuts personally impact the technology side because I think we’ve already seen them. And the question is, will they come back? I’m more bullish and confident certainly on the non-tech side of corporate travel and continue to share there.

I will say the jury is a little bit out on where tech does go. But I think overall, portfolio-wise, business is somewhat stable that the 85%, 75%, 85% range. But again, I hope with our share movement and continued strength over time that we do get back there.

Shane Tackett: And Savi, I might just add, the one thing not to lose sight of is these tech companies while they haven’t been traveling for quite a while, these are like the most valuable companies on earth. And at some point, they are going to expand again and they’re going to get traveling again. So it’s probably future goodness for us. We just don’t know when it’s going to really come back. It could be a year away or more.

Savi Syth: Makes sense. And I just thought of the — getting back to the utilization and productivity — trying to understand, again, then you talked about the aerospace is what it is, and we’re still below and yet you’re seeing everybody struggling with and then questioning if we get back to kind of the previous productivity, what’s kind of controllable on Alaska side and the timing around that versus what — what’s kind of out of your control?

Benito Minicucci: No, Savi. Just let me start with a couple of things. I think for us, well, coming back from a pandemic and getting the inertia up for the operation, I think that’s where not just Alaska, but the entire industry struggled getting back up to a certain level of capacity. So there was some — there was a lot of issues there. Like as I look forward now into 2023, when I look at the benefits of single fleet and having the majority of your fleet Boeing and the majority of your fleet Embraer 175, that just drives massive efficiency in terms of crews, in terms of swapping airplanes and getting reserve crews. So just there alone for us is a major improvement. Secondly, again, getting through a little bit of the volatility with staffing and training, that goes away.

So that volatility goes out. So our folks is pure in every part of the operation where we see volatility in staffing, where we see volatility and performance is to go in in on those issues and snuff them out. And I mean that’s what good airlines do and operational reliability is just critical in doing that right. Now there will be things that will never go back to the way they were in 2019, but I think a lot of this is in our control. And we just don’t give up on those type of things. It’s savings that you can go after, and we’re going to go after them.

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