Some airlines processing refunds outside ARC coronavirus

Eight airlines have informed ARC that they will manage
refunds directly and not allow them to be processed via GDSs or ARC’s
Interactive Agent Reporting (IAR) system.

The carriers are Air France, KLM, WestJet, El Al, TAP
Portugal, Air Transat, Kazakhstan-based Air Astana and Spain’s Plus Ultra
Lineas Aereas.

The changes come as refunds are far outpacing sales because
of the coronavirus pandemic. Travel advisors, said ARC, should contact the
airlines directly and follow their individual policies for refunds. 

ARC said it will update its own webpage as soon as it is
notified of any change in an airline’s refund process. The airline-owned
corporation also said that it recognizes the changes will impact the business
flow and processes of agencies, including records, back-office files and

“ARC settlement is designed to facilitate efficient sales,
exchange and refund processes between airlines and travel agencies. While we
are unable to process refunds for airlines that have made the decision to
manage these transactions directly, we are striving to make it as easy as
possible for agencies to quickly and efficiently contact airlines regarding
refunds,” the corporation’s website says. 

Columbus, Ohio-based travel agent Richard Lewis said he
worries that evolving policies by airlines will lead him to undertake
transactions that result in debit memos. 

“I can’t afford to fight a battle if I’m debited back by a
carrier,” he said. 

Peter Vlitas, senior vice president of airlines for Travel
Leaders Group, said that he expects cancellation rules to continue evolving. He
added that debit memos are on the rise. 

ARC declined to comment on debit memos.

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United Airlines Reinstating Some International Flights to Help Travelers Get Home

With the rapidly dwindling number of commercial flights available to those tens of thousands of Americans who are still stranded abroad and attempting to find a way home in the face of abrupt international border closures, United Airlines is doing its best to offer some solutions.

Just days ago, in response to the COVID-19 global health crisis, the White House issued a Level-4 Travel Advisory, the State Department’s most severe restriction, encouraging U.S. citizens to avoid all international travel and advising that those currently outside the country should “arrange for immediate return”.

Aware that U.S. residents still abroad are frightened, frustrated and faced with unprecedented travel challenges, United Airlines is revising its previous announcement (released March 20), which had promised a 95-percent reduction in the carrier’s international schedule for April 2020.

In an effort to help displaced travelers get where they need to go, United will continue flying six daily operations to and from select destinations in Asia, Australia, Latin America, Europe and the Middle East. While the airline’s international schedule will still be reduced by about 90-percent in April, United’s aim is to provide some additional options for those still struggling to get home.

Although a full listing of flights is available on the United Hub website, some specific routes set to continue through May 2020 include service between Newark/New York and Frankfurt, Newark/New York and London; Newark/New York and Tel Aviv; Houston and Sao Paulo; San Francisco and Sydney; and San Francisco and Tokyo-Narita.

Newly-reinstated outbound flights running through March 27 include United’s service between Newark/New York and Amsterdam; Newark/New York and Munich; Newark/New York and Brussels; Newark/New York and Sao Paulo; Washington-Dulles and London; and San Francisco and Frankfurt. Also, operating through March 29, service will connect San Francisco and Seoul.

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American Airlines parking some 450 planes coronavirus

In a message to American Airlines employees on Thursday,
president Robert Isom said the carrier has taken steps “unparalleled in our
history” to reduce capacity amid the Covid-19 pandemic.

International flying has been reduced by 75% in April and
domestic flying by 30%. Further reductions are planned for May. In all, 55,000
flights have been scrubbed from AA’s April schedule. The airline will park approximately
130 widebody jets and 320 narrowbodies.

All long-haul international flying has been grounded, except
once-daily service between London Heathrow and both Miami and Dallas/Fort Worth
plus thrice-weekly service between Dallas and Tokyo Narita. 

AA has offered voluntary leave to most employees. The
airline is also offering an early out so workers with at least 15 years at American who are ready to leave can keep their medical care at active employees’

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American Airlines Announces Changes to Admirals Club, Flagship Lounges

American Airlines announced it would make operational changes to Admirals Club lounges and Flagship Lounges at airports around the world.

Due to the ongoing coronavirus outbreak and the resulting decrease in demand, American has changed food and beverage procedures in Massachusetts, New Jersey, New York, Orlando, Pennsylvania and San Francisco.

The airline has been forced to temporarily close some U.S. Admirals Club locations in airports with multiple lounges due to decreased demand. Facilities in Paris, Rio de Janeiro, Sao Paulo, Buenos Aires and London have also been temporarily closed.

American announced alcohol would no longer be served to guests at lounges in Boston, New York City, Orlando, Philadelphia and San Francisco. Other facilities have instituted policies stating all food would be served as to-go items.

The carrier announced earlier this week it would cut 75 percent of its international capacity through May 6 to combat the loss of revenue from decreased customer demand due to the coronavirus.

Other airlines are also making changes, with United Airlines reducing the number of flights scheduled for next month by a total of 60 percent, including a 42-percent drop across the U.S. and Canada and an 85-percent decrease in international flights.

The U.S. Travel Association also announced Tuesday it projects an $809 billion hit on the U.S. economy and the loss of 4.6 million travel-related jobs in the country.

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United Airlines Reducing Capacity, Cutting Salaries

United Airlines is reducing capacity for April and May by 50 percent and cutting corporate officers’ salaries in half amid the global impact of the coronavirus (COVID-19) outbreak.

The airline’s CEO Oscar Munoz and President Scott Kirby shared the alarming numbers in a message to United’s nearly 100,000 employees late Sunday.

“As you know, March is typically our busiest month of the year. But this year, in just the first two weeks of March, we have welcomed more than one million fewer customers on board our aircraft than the same period last year,” the executives said. “We’re also currently projecting that revenue in March will be $1.5 billion lower than last March.”

“The bad news is that it’s getting worse. We expect both the number of customers and revenue to decline sharply in the days and weeks ahead.”

Last week, United announced that Munoz and Kirby would forgo their base salaries through June 30 following a dramatic decline in bookings.

Despite these efforts, the United brass also told employees that it anticipates the deep cuts to extend into the peak summer travel period. “We’re expecting load factors to drop into the 20-30 percent range—and that’s if things don’t get worse,” added Munoz and Kirby.

United’s decreased capacity and pay cuts are quickly becoming the new norm for the airline industry as governments impose travel bans and restrictions on the advice of medical experts.

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Airlines, Travel Industry React to Latest Travel Restrictions

It was, to say the least, an extraordinary day on Wednesday as the country continues to grapple with the spread of COVID-19.

The virus touched virtually every aspect of life in one incredible eight-hour span.

– The National Basketball Association abruptly suspended its season after the final game on Wednesday after a player from the Utah Jazz had a preliminary positive test for the coronavirus.

– New York City officials canceled the revered St. Patrick’s Day Parade on Fifth Ave, the first time in 258 years. The parade is so established it is older than the United States.

– In Chicago, there will be no pub crawl and no dyeing the Chicago River green – the city also canceled its annual St. Patrick’s Day parade.

– The National Collegiate Athletic Association announced that its wildly popular men’s and women’s basketball tournaments – three weeks known as ‘March Madness’ – will still be played but no fans will be permitted inside any arena during the length of the tournament.

All of those affect travel in one way or another.

But perhaps the most startling news – and certainly the most troubling to the airline industry – came during President Trump’s address to the nation from the Oval Office on Wednesday night. To combat the spread of the virus in the U.S., and on the heels of the World Health Organization declaring COVID-19 a global pandemic, the president has suspended travel from 26 European countries to the United States starting at midnight on Friday, March 13. The United Kingdom was not part of the banned nations.

Immediately, the reaction has been palpable.

U.S. stock futures plummeted overnight, falling more than 1,000 points or 4.6 percent. When the markets opened this morning at 9:30 EDT, the Dow Jones dropped more than 1,700 points and within six minutes the so-called “circuit breaker” implemented by the New York Stock Exchange to temporarily halt trading for 15 minutes kicked in.

Not that they have a choice, but the airlines all said they will comply with Trump’s directive.

“At this point, all I can say is that we will comply with the administration’s announcement,” United Airlines spokesman Frank Benenati told CNN.

“The safety and health of our customers and employees is always our highest priority,” said Delta Air Lines spokeswoman Elizabeth Ninomiya in a statement. “Delta has and will continue to quickly make adjustments to service, as needed, in response to government travel directive.”

American Airlines said it is in contact with government officials to further understand and comply with the directive.

The airlines are expecting a precipitous drop in business and Trump talked about making financial help available from the government along the lines of the bailout after the Sept. 11, 2001 attacks. He did not elaborate, however.

The transatlantic routes for airlines are among the most lucrative, something Airlines For America President and CEO Nicholas E. Calio said in a statement. Airlines For America is the umbrella lobby group for the airline industry.

While commending Trump for his “decisive action,” Calio said “the unforeseen outbreak of the coronavirus has directly impacted the U.S. airline industry, which is critical to the U.S. and global economies. This action will hit U.S. airlines, their employees, travelers and the shipping public extremely hard. However, we respect the need to take this unprecedented action and appreciate the Administration’s commitment to facilitate travel and trade.”

According to the International Air Transport Association (IATA), the aviation industry could lose around $63 billion if the viral infection is contained in the countries currently experiencing confirmed cases.

Ralph Hollister, Travel & Tourism Analyst at GlobalData, a leading data and analytics company, said a travel ban now might be too little too late.

“A travel ban may be too little too late now that the virus is spreading throughout the global population,” he said. “Additionally, the disruption from this ban will cause a significant impact on the US travel sector. US travel intermediaries, hotels and airports are examples of industries that will be heavily disrupted. US airlines may be the first to feel a significant impact, due to travel between North America and Europe providing a valuable revenue stream.”

Roger Dow, President and CEO of the U.S. Travel Association said that the government must now consider equally aggressive steps to financially bolster the industry. House Democrats did introduce a multi-billion dollar bill in response to the outbreak following the president’s speech.

“Temporarily shutting off travel from Europe is going to exacerbate the already-heavy impact of coronavirus on the travel industry and the 15.7 million Americans whose jobs depend on travel,” Dow said. “We have and will continue to engage Congress and the administration on policy steps that are necessary to ensure that travel employers—83% of which are small businesses—can keep the lights on for their employees.”

According to U.S. Travel Association economists, 850,000 international visitors flying from Europe (excluding the UK) entered the United States in March of 2019, accounting for about 29% of total overseas arrivals to the U.S. These visitors spent approximately $3.4 billion in the U.S.

Trump’s decision on the 30-day ban also sent Europe into a tailspin. MotherJones reported this morning that Paris’ Charles de Gaulle International Airport was swamped with Americans and others trying to get out of France on flights to the U.S., with one person paying $3,300 for a one-way coach set from Paris to Phoenix. And a Delta ticket agent said one person spent $20,000 online in tickets to get home to the U.S.

Needless to say, the European Union was not thrilled with Trump’s decision.

“The European Union disapproves of the fact that the U.S. decision to impose a travel ban was taken unilaterally and without consultation,” European Council President Charles Michel and European Commission President Ursula von der Leyen said in a joint statement. “The coronavirus is a global crisis, not limited to any continent and it requires cooperation rather than unilateral action.”

According to flight tracker FlightAware, around 400 flights across the Atlantic from Europe to the United States each day.

Terry Dale, President & CEO of the United States Tour Operators Association, said while he understands and appreciates the urgency to curb the growth COVID-19 within the United States, “we were surprised and discouraged by the Administration’s announcement of the 30-day travel ban with Europe. It adds more confusion and uncertainty to our already beleaguered industry.”

In the meantime, Walt Disney World in Florida and Disneyland in California continue to hold out and have not closed the parks. In fact, Executive Chairman Bob Iger said at the company’s annual shareholder meeting this week that staying open is what the country needs.

“It’s fair to say we’re all sobered by the concern that we feel for everyone affected by this global crisis,” Iger said in prepared remarks. “These are challenging times for everyone. (But) what we’ve demonstrated over the years is that we’re incredibly resilient. If you think about the world today, what we create has never been more necessary or more important.”

In a statement, the American Society of Travel Advisors (ASTA) said it is “diligently working with policy makers in both the Trump Administration and in Congress to obtain a variety of relief options to help advisors, and the travel industry as a whole, weather this storm. We will, of course, keep ASTA members fully apprised of the latest developments in this rapidly evolving situation.”

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American Airlines caps Europe fares after ban decree

American Airlines has placed
a cap on one-way economy ticket prices to and from Europe, including the U.K.,
following a rush to buy in the wake of the travel suspension decreed by
President Trump on Wednesday. 

The carrier has capped
economy fares from Europe and the U.K. at 799 euros and 799 British pounds,
respectively. Fares from the U.S. have been capped at $1,000. The caps are in
place for travel through March 24. The travel ban begins Saturday and applies
to foreign nationals who would be entering the U.S. from 26 mainland Europe

American also said it is
offering “reasonably priced” fares in premium cabins. 

Delta, too, has capped its
Europe fares, though the carrier did not immediately provide details on
Thursday afternoon.

Also on Thursday, Delta waived
change fees through May 31 on Europe travel. Flyers may also cancel their
ticket and receive credit toward future flights booked by Dec. 31.

Delta and several other U.S.
carriers were already offering free changes on all booked flights, including
domestic, though the end of April.

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Airlines reduce schedules coronavirus

U.S. airlines announced service cuts Tuesday to counter the
plummeting demand caused by the Covid-19 virus. 

“This is a crisis that is going to have a large near-term
impact on revenue,” United president Scott Kirby said during a presentation at
the J.P. Morgan Industrials Conference. 

United had already announced a 10% cut to domestic capacity
and a 20% cut in international flying for April. On Tuesday, Kirby said the
carrier expects to increase the cut to 20% systemwide for May, and to either
maintain or increase the reduction after May until it sees concrete signs of
increasing demand. 

Other airlines made similar moves Tuesday. 

Delta will implement a 15% system reduction. The changes are
to include a 10% to 15% drop in domestic capacity. Transatlantic capacity will
be down 15% to 20% and transpacific capacity will be down 65%. The carrier also
plans to drop its Latin America capacity by 5%.

American said it would drop domestic capacity by 7.5% for
April while reducing international capacity for the summer peak season by 10%.
The cuts are to include a 55% reduction in transpacific capacity. Domestic
cuts, the carrier said, will be undertaken through frequency reductions on
heavily serviced routes and via the cancellation of selected routes that can be
easily re-accommodated. 

Spirit, too, will trim its April schedule. The carrier still
plans to offer 9% more capacity in April than it did last year, but that’s down
from a planned 14% increase. 

JetBlue, meanwhile, previously committed to a capacity cut
of 5% through early May.

Bucking the trend is Alaska, which stated Tuesday that is
has no material cuts scheduled for March and April. 

“We are analyzing the need to consolidate frequencies or
trim flights that would operate at a cash loss in May and beyond,” said the airline.

Kirby presented some of the most dismal data at
the conference, saying that since the spread of Covid-19 outside Asia, United’s
gross domestic bookings are down 25%. Net bookings, which factor in
cancellations, have dropped 70%. The figures are even worse for Asia and
Europe, where gross bookings are down 50% and 70%, respectively. 

Delta CEO Ed Bastian had similar news. Delta has seen a 25%
to 30% decrease in net bookings since the virus spread beyond Asia. And the
carrier is preparing for the situation to get worse.

United is modeling for a scenario in which demand falls 70%
systemwide in April and May, and then 60% in June and July. Kirby stressed that
the model isn’t a forecast, but rather a method to prepare for whatever comes. 

News out of the conference wasn’t entirely bad. American CEO
Doug Parker said that ahead of the summer season, the carrier last week took
the unusual step of putting some of its lowest fare buckets on the market
early. As a result, bookings increased.

“There’s a real demand for air travel,” Parker said. 

Airlines also reported that domestic load factors have
remained strong, even if slightly down from before the crisis. Spirit, for
example, reported that load factors from March 1 to March 8 ranged from a high
of 88.5% to a low of 76.6%. The carrier estimates that its load factor for the
full month will be 81.4%. 

The various airlines also boasted of their strength entering
this sharp downturn, including high levels of liquidity. The Covid-19 outbreak
will put a halt to what has been the longest sustained run of profitability in
the U.S. airline industry’s history. 

American, for example, has $7.3 billion in cash on hand,
Parker said.

“Seven billion isn’t a target we need to run the company.
It’s a target we always wanted to have in place for situations like this,” he

JetBlue has $1.2 billion in cash and cash equivalents, said
CEO Robin Hayes, which is approximately 15% of total 2019 revenue. 

Kirby said United is prepared to weather the storm, even if
federal assistance, hinted at by President Donald Trump on Monday, doesn’t

“We are not going to count on any sort of government
intervention,” he said. “We are going to manage the airline to make sure we
make it through the crisis without any of that.”

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Are US airlines offering status extensions for customers impacted by coronavirus?

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The last few weeks have been fraught with uncertainty as the coronavirus pandemic sweeps across the globe. Travelers have shared myriad concerns with TPG, wondering if they should proceed with their travel plans, if award availability has improved or decreased in recent weeks, and asking if their trips are eligible for travel insurance protection. Brands across the travel industry have issued waivers offering no-fee cancellations and trip credits, from airlines to hotels to cruise lines.

Elite travelers have also begun to feel the impact of canceled business travel as the stock market fluctuates at its wildest instability since the financial downturn over a decade ago. Major trade shows, conferences and corporate events are canceled. Airlines are curtailing or eliminating routes outright, and preventative quarantines are impacting cruise ships, museums, cities, states and even entire countries.

As a result, business travelers have begun asking TPG, “What can we expect from airlines regarding our ability to maintain elite status?”

a close up of a flower: One of many direct messages to Brian Kelly from a concerned TPG reader.

Here’s what the airlines have to say

We know that some customers’ travel plans are changing due to COVID-19, which is causing some SkyMiles members to worry about earning miles, qualifying for status or completing a promotion,” a Delta spokesperson told TPG. “While this is an evolving situation, members can rest assured that we’ve got their back.”

American Airlines and Southwest had similar sentiments to share, with spokespeople from each company telling TPG that they are aware of their customer’s concerns, and will communicate directly with their elite travelers as the situation progresses.

Here’s what the experts say

The International Air Transport Association (IATA) anticipates that the impact of the coronavirus pandemic will be felt across the airline industry for a long time to come.

Airline share prices have dropped by nearly 25% — significantly more than during the SARS outbreak of 2003. Industry analysts believe the commercial aviation industry will take a global revenue loss of between $63 billion and $113 billion, according to an updated IATA report published on March 5. A previous analysis published two weeks prior on Feb. 25 had approximated the loss at just $29.3 billion, based on insights gleaned from when the outbreak was primarily confined to China and its associated markets.

New York-based Cowen, a research firm focused on business insights and analytics, does not believe that airlines will make a decision on extending elite status this early on in the year. 

“Given how many companies have asked their employees not to travel or have banned travel altogether, we expect the airlines do nothing in the short term” about extending elite status qualifications, said Helane Becker, Cowen’s senior research analyst covering airlines and air-related industries.

“You are asking about a decision that does not have to be made until later in the year,” Becker told TPG. “The key question is duration. If this virus and ban on travel lasts until the fourth quarter of 2020, for example, then we expect the airlines will waive requirements and let everyone keep their 2020 status for 2021. If this is short lived — say one month or six weeks — then there might be enough time for people to continue to earn their status. In our view, it comes down to duration.”

But airline industry analyst Robert W. Mann, Jr. takes a slightly more customer-centric viewpoint on the matter. “Given [that] many airlines extend elite status for life events, this [pandemic] may be viewed as comparable,” Mann told The Points Guy. “Airlines need the continuing loyalty of their most important few customers, even if events occur that interrupt travel plans or propensity. Loyalty ought to be a two-way street.”

Mann’s insights regarding customer loyalty are as important as they are hard-earned: Mann previously served as an executive at American Airlines, Pan Am and TWA, where he either designed or directed each airline’s loyalty program. Today, he consults airlines on industry trends and insights. 

Airline consultant Mark Ross-Smith cautions against comparing the airline and hotel industries, pointing out that the two businesses are run very differently despite falling under the mutual category of travel. As such, Ross-Smith, who previously headed up the loyalty program for Malaysia Airlines, believes the approach to the question of status extension should be handled with different considerations as well.

“Choosing the wrong approach based on the program structure type can be costly,” Ross-Smith recently stated on his site, Travel Data Daily. “Or put more bluntly – gifting or to extend elite status to the wrong customer at the wrong time will have disastrous consequences for airlines on forward bookings and future ticket revenue.”

In other words, airlines that already are hurting from lost revenue will only worsen the issue by extending unnecessary benefits in this time of crisis.

Ross-Smith sums up the issue by saying that there is no blanket “right” or “wrong” answer. Rather, each airline will have to evaluate its individual business strategy to determine the right move at the right time.  “There are two certainties, no matter the path,” Ross-Smith said: A percentage of a brand’s customer base will stop spending with that airline, while another percentage of that customer base will continue spending with the airline.

“Knowing which percentage and which segments of the database will swing more business your way, and which segments will spend less is the key to steering a successful elite status extension program in times of crisis,” Ross-Smith concluded in his analysis.

Still, business is never just about the numbers. “Airlines should not underestimate the PR damage they will suffer if they do not show some flexibility,” said Henry Harteveldt, president and industry analyst at Atmosphere Research Group. “Our 2019 US traveler research shows that only 22% of U.S. airline passengers are loyal to at least one airline. If airlines don’t show some willingness to compromise on elite re-qualification, they risk seeing that number sink even more.”

That being said, Harteveldt shares Becker’s opinion that it’s too early in the year to tell what airlines will — or should — do. “If the virus starts to abate in May or June, it leaves passengers about half a year to re-qualify,” Harteveldt told TPG. “But if the virus remains a threat, and if organizations continue to restrict business travel past July, I believe airlines will have to re-examine re-qualification criteria – unless an airline intentionally wants to thin certain elite-tier ranks.”

Bottom line

As of yet, none of the major U.S. carriers are offering elite status concessions as of yet. But we’re not even a quarter of the way through 2020 at this point in time, and there are many months ahead for travelers to beef up their mileage count for the year.

Spring is coming, and respiratory diseases like the coronavirus and common flu tend to die down with the advent of warmer weather. Hopefully that’s true for COVID-19 as well. If that happens, it’s very likely that both business and personal travel will pick back up again, and elite travelers no doubt will find plenty of sale fares and opportunities to use their travel credits toward building up status for 2021.

“With fewer airlines today than when 9/11 or SARS [occurred], two events that had massive impact on air travel, frequent fliers need to remember that airlines don’t have to be as flexible or generous as they may have been in the past,” travel industry analyst Harteveldt told TPG. “But all it will take is for one of the ‘core four’ airlines — American, Delta, Southwest, and United — to relax elite-tier re-qualification criteria, and the others will likely follow in order to remain competitive.”

Featured photo by Zach Griff for The Points Guy.

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Alaska Airlines to Launch Daily Nonstop Service Between Seattle and Cincinnati

Alaska Airlines is set to make its debut in Cincinnati this summer.

The carrier announced it will launch daily nonstop service between Seattle-Tacoma International Airport (SEA) and Cincinnati/Northern Kentucky International Airport (CVG) on August 18.

Cincinnati marks the airline’s 93rd nonstop destination served from its hub in Seattle.

The daily flights will be operated by a Boeing 737 aircraft, with the first departing SEA at 9:20 a.m. and arriving at CVG at 4:50 p.m. The return flight from CVG will depart one hour later and arrive at SEA by 8 p.m. local time.

“For years we’ve heard from flyers and our corporate clients that they’d like Seattle’s hometown carrier to connect Cincinnati with the Puget Sound region,” said Brett Catlin, Alaska Airlines managing director of capacity planning and alliances, in a statement accompanying Friday’s announcement. “We couldn’t be more excited to roll out our newest Midwest destination adding the Cincinnati/Northern Kentucky region to the Alaska Airlines network while furthering our commitment to Seattle, where we will offer 350 daily departures this summer.”

“The Cincinnati/Northern Kentucky community is excited to welcome Alaska Airlines and its strong West Coast presence to CVG,” added the CEO of CVG, Candace McGraw. “The new nonstop service from CVG to Seattle offers excellent schedule times and will enhance travel options for both business and leisure travelers in the tri-state region going to the Pacific Northwest, Hawaii and Alaska.”

A new route? OH, yeah! Fly nonstop between Seattle, WA (SEA) and Cincinnati, OH (CVG) starting August 18, 2020. Book your flight now at

Alaska Airlines recently announced plans to add daily nonstop service between Seattle and Monterey, California. Those flights are scheduled to begin on June 18.

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