Alaska Airlines CEO Ben Minicucci said Tuesday that business travel is coming back, including in Seattle.
“We’re seeing more business traffic come back,” Minicucci told those attending the J.P. Morgan Industrials Conference Tuesday. “What’s really been helpful is the return of business and corporate traffic for us in our West Coast hubs.”
The SeaTac-based company’s West Coast hubs include Seattle, Portland, San Francisco and Los Angeles.
In the Seattle market, Amazon’s business travel has exceeded 2019 levels for the airline. Microsoft’s travel on Alaska hasn’t hit the 2019 level, but is two times what it was last year, Minicucci said.
“We’re just optimistic that business travel is starting to return to 2019 levels, and in combination with the strong leisure traffic we’re seeing, we’re in a good spot,” the chief executive said.
Alaska is also seeing improvement in the Bay Area, which Minicucci noted was slow to come out of the pandemic, along with Portland.
“We’re seeing a lot of signs of life now out of Portland and the Bay Area, so you’re going to see us start adding back capacity,” Minicucci said.
At San Francisco International Airport, Alaska plans to make its much-anticipated move this year from Terminal 2 to Terminal 1, where it will be located closer to Oneworld Alliance partner American Airlines.
Alaska Air Group Inc. (NYSE: ALK) said in a regulatory filing Tuesday that it expects a stronger first quarter than Wall Street anticipates. The parent of Alaska Airlines expects to lose between 55 cents and 45 cents per share in the first quarter, far better than the average analysts’ expectation of a loss of $1.18 per share, Reuters reported, citing LSEG data.
“Given recent strength in demand through spring break travel periods and continued recovery of West Coast business travel, we now expect an even greater year-over-year improvement in (first quarter) profitability,” Alaska said in a regulatory filing Tuesday.
On the acquisition front, Alaska is in the process of responding to the Justice Department’s second request for information on its $1.9 billion planned purchase of Hawaiian Airlines. The carrier expects to get the information to regulators by May.
Meanwhile, the carrier is working on how the two companies will come together, having already decided that both the Alaska Airlines and Hawaiian Airlines names will continue to fly.
“We’re going through a huge branding exercise right now,” Minicucci said. “One of our strengths is our brand, and it’s also a limiter for us,” Minicucci said, pointing to New Yorkers who think the airline only serves Alaska.
“We see this as an opportunity now to take two really regional but strong brands with strong loyalty and say what is the overarching brand?” he said, adding that the airline hopes to have more to say publicly about its branding in six to nine months. As he has said before, Minicucci likes the Marriott Bonvoy loyalty program that covers more than 30 hotel brands.
He noted that the Bonvoy app opens by asking users where they want to go rather than pitching a hotel. Minicucci envisions his company’s app would also ask users where they want to go and then offer the company’s service that will get them there.
“Alaska is going to be more of a national and global carrier going forward, and so we’re putting the building blocks in place for that,” Minicucci said.