Alaska Airlines Says Tech Sector Business Travel ‘Severely Depressed’

Tech industry cutbacks are having an impact on business travel.

During a Thursday (Jan. 26) earnings call, Alaska Airlines reported that while its overall corporate travel volume has recovered to 75% of pre-pandemic levels, the tech industry-heavy West Coast has lagged behind.

“West Coast business remains less recovered, which is not surprising given the significant workforce reductions happening across large technology companies located up and down the coast,” Alaska Airlines Executive Vice President and Chief Commercial Officer Andrew Harrison said during the call.

These remarks followed a calendar year when tech companies eliminated more than 153,000 jobs. That 2022 total was up from the previous year’s count of just 15,000 job losses in the sector, according to Layoffs.fyi.

Only weeks into the new year, 2023 has already seen Microsoft announce 10,000 job cuts, Google parent Alphabet announce 12,000 job cuts and Amazon announce that its cuts that began in November will eventually total 18,000.

“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,” Harrison said during the Alaska Airlines earnings call. “So, the corporate numbers that you see from us already include a lot of the high-tech companies that already, in some cases, nearly turned off their travel.”

As the airline industry struggles to recover from the pandemic, global and multinational firms have been slower to return to business travel than small and medium-sized businesses (SMBs).

Industry-wide, airlines have seen that the amount of money spent on business travel by SMBs has rebounded to 80% of pre-pandemic levels. In comparison, the larger firms remain at only 61%, the Wall Street Journal reported Jan. 23, citing figures from Amex Global Business Travel (GBT).

Alaska Airlines Chief Financial Officer and Executive Vice President of Finance Shane Tackett said during the call: “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. At some point, they are going to expand again and they’re going to get traveling again.”