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Six Flags expects ‘new normal’ as they report 1Q loss

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Six Flags Corp. is pondering a mid-May opening at lower capacity for its all its North American parks, as shuttered operations due to COVID-19 pandemic continue to drain company finances.

The Grand Prairie-based theme park company reported a net loss of $85 million for the first quarter.

Six Flags anticipates a “new normal” when parks reopen and is preparing for a “prolonged minimal revenue business,” President and CEO Mike Spanos said during Thursday’s investor call.

“I want to emphasis [that] we will open our parks,” Spanos said. “Our company and our industry will emerge stronger.”

Six Flags suspended scheduled openings of all its parks on March 13 due to the intensifying spread of COVID-19. The company had to indefinitely close down 11 of its parks that were open as well.

Following local authority and CDC guidelines, all reopening dates and stipulations would vary from park to park. But, the company expects to resume operations in the next two to three weeks.

Before the suspension of park operations, park attendance number was 19%, or about 255,000 guests, higher as compared to the first quarter of last year. So far this year, Six Flags parks have experienced a 27% decrease in attendance, which the company said was due to pandemic-related suspensions.

“We eliminated nearly all of our seasonal labor costs. We announced a 25% salary reduction for all our executive officers and salaried employees and a 25% reduction in scheduled hours for all full-time hourly employees,” chief financial officer Leonard Russ said. “We suspended all advertising and marketing costs. We deferred the $20 million of increased investments we had planned to improve the guest improvement.”

Six Flags said it will ramp up its sanitization efforts and wipe and clean the rides with increased frequency. There will be hand washing stations and hand sanitizers deployed throughout a park’s area.

To maintain social distancing protocols, CEO Spanos said the parks would restrict the total number of guests allowed to congregate in certain areas and enter a ride.

Six Flags is working on enhancing and integrating digital platforms inside the parks to limit larger crowd gatherings. The plans include a virtual queuing system, an increase in cashless transactions and the ability to order food items through a mobile app, among others.

“Coincidentally, this would also help we operate in a socially-distant environment by reducing the need for people to stand in line next to one another. Technology will also allow us to improve our ways of working in the parks to be more effective and efficient, slowing the growth rate of operating expenditures as we execute productivity initiatives,” Spanos said.

To start, the company said, parks would open with only 25% of the total capacity. Spanos noted that due to a relatively lower impact, parks in the Texas region could open before parks in the Northeast.

“Looking ahead in 2020, we cannot predict with any certainty the lengths and severity of the disruptions from COVID-19, or how long the economic impact will be,” Spanos said. “We are working with state, local government officials to determine which parks can open first based on lifting the restrictions of local health authorities.”

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