Alaska Air to cut 200 jobs, warns of potential $700 million annual loss

By Rajesh Kumar Singh

CHICAGO, Oct 30 (Reuters) - Alaska Air Group ALK.N said on Friday it would eliminate about 200 non-contract positions as soaring fuel prices and geopolitical challenges squeeze its finances, with its chief executive warning of a potential $700 million annual loss.

The cuts suggest that the effects of airlines' fuel-price shock are extending beyond higher fares and reduced flight schedules, to threaten airline jobs.

They also expose mounting pressure on Alaska as it pursues an ambitious expansion into premium and international travel, with strong revenue growth insufficient to shield its earnings from surging fuel costs.

Chief Executive Ben Minicucci told employees in a memo seen by Reuters that the company could lose as much as $700 million this year if current conditions persist, marking its first adjusted pretax loss outside the pandemic since 2003.

"We must return to the financial discipline that has long been a key competitive advantage," Minicucci said, adding that overhead expenses had grown at a disproportionate rate to revenue in recent years.

The reductions affect less than 1% of Alaska's roughly 32,500 employees, a company spokesperson said. They include 125 positions in Washington state and 48 in Hawaii.

No frontline, non-management jobs are being eliminated. The last working day for affected employees will be November 13 although they will continue receiving pay through December 31, along with severance and other support.