SEATTLE — Nordstrom and Alaska Airlines both announced big cutbacks due to the coronavirus pandemic.
Officials with Nordstrom said it’s never faced a problem quite like this in its 119-year history, announcing it would stay closed for one more week, and then after April 5, some corporate employees would be furloughed.
“They’ll have a little bit less money to spend and that will reverberate through the local economy as well, because it means less money for retail, less money for restaurants,” University of Washington economist Jacob Vigdor said.
The Seattle retailer closed 380 stores in 40 states.
Vigdor said companies like Nordstrom are scrambling.
CEO Erik Nordstrom said, “This is the most difficult decision we have made in our company’s long history.”
“This is a big threat. Even the largest businesses in the economy, they got to think carefully about whether they have enough cash to cover expenses if they have no customers coming in the door,” Vigdor said.
The other major company, Alaska Airlines, announced it would reduce its flight schedule by 70% for April and May due to a huge falloff in demand.
Alaska CEO Brad Tilden said, “These actions are unprecedented, but these are truly unprecedented times.”
“With nobody booking new tickets, they don’t have the money to keep those planes in the air. So, what they’re really trying to do now is cut back and go into survival mode,” Vigdor said.
Vigdor said companies like Alaska are maxing out lines of credit just to stay afloat.
As for Alaska’s flight schedules for June and beyond, it will base them on demand but their expectation is that reductions will be substantial for at least the next several months.
And because of social distancing, the airline said it is seeing demand reductions of more than 80%.
"Alaska's goal, since the onset of this outbreak, has been to keep our employees and guests safe and healthy, and to ensure that our airline is here to support and serve them in the future," said Tilden. "But we also know that given the lack of demand for air travel and profound impact on the financial management of our business, hard work and aggressive control of costs and cash are required, even with additional support."
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