Don C. Brunell: Alaska Airlines Performance Unsurpassed

Fifty years ago, Boeing, Weyerhaeuser and PACCAR were the “Crème de la crème” of Washington’s publicly traded corporations. Twenty-five years ago, Microsoft, Costco and Starbucks joined the list. Now, when people talk about our state’s top businesses, Alaska Airlines is part of that conversation.

Alaska Air Group, consisting of Alaska, Horizon and now Virgin America airlines, is Seattle-based. It is important to Washington because 7,000 of its 19,000 employees are located here, and when indirect employment is added, it creates nearly 22,000 jobs statewide.

The airline contributes $2.28 billion directly to our state’s economy and $5.58 billion overall when indirect economic output is calculated.

Alaska earned the reputation as our nation’s most prestigious airlines, sweeping top awards for performance, customer service and innovation over the last five years.

The airlines industry is fiercely competitive. Alaska, which once partnered with Delta on frequent flier programs, finds itself going head-to-head with it today. Delta wants a big chunk of Alaska’s business and is working to close the gap in performance ratings.

In 2016, Alaska was J.D. Power’s choice for “highest customer satisfaction among traditional carriers in North America” for the ninth straight year. Earlier this month, the Wall Street Journal (WSJ) again named it the “No. 1 overall U.S. carrier.” It is an award which Alaska has won every year since 2013, but now Delta has moved into second place.

U.S. News and World Report ranked Alaska’s mileage plan as the best rewards program for 2016-17, and the International Council on Clean Transportation said it was the “Most Fuel Efficient U.S. Airline from 2011-15”. The list is lengthy, but the Federal Aviation Administration’s Diamond Award of Excellence is one every air carrier covets.

Interestingly, a decade ago, regional airlines, like Alaska, were supposed to fade away or be grabbed up by the big guys. Some industry analysts believed Alaska would not withstand the pressure from low-cost carriers such as Southwest.

In fact the opposite has happened. Alaska continues to grow while industry pioneers, namely TWA, Continental and Northwest, vanished.

Air Transport World (ATW) stated: “In many respects, Alaska Airlines is the David of a consolidated U.S. airlines industry now dominated by Goliaths who control more than 80 percent of the domestic capacity. … But this Seattle-based, fiercely independent carrier is not daunted by the challenges of maintaining its leading place in the U.S. Pacific Northwest.”

ATW added that “Alaska Airlines is a carrier that certainly won’t win awards for patience. ‘If it doesn’t exist, invent it,’ seems to be the modus operandi of the airlines.” ATW’s example is Alaska developed the advanced onboard navigation system which allows pilots to fly safely into terrain and weather challenged airports like Juneau.

Just as other iconic Washington companies are known for innovation, it has been vital to Alaska Air. Alaska revolutionized on-line ticketing and check-in. At airports, it relies upon passenger friendly kiosks to move fliers quickly through check-in to boarding flights.

If a problem develops, Alaska moves rapidly to solve it. For example, when it started slipping in baggage performance, Alaska began bar-coding every bag going on planes. Rather than awaiting bags to be sorted at terminals, Alaska loads carts from arriving flights and delivers them directly to aircraft to transfer onto connecting flights.

Alaska Air Group faces challenges ahead as it brings Virgin America into its fold. It is never easy merging corporate cultures; however, Virgin America is also a top performer. It ranked third in WSJ’s 2016 scorecard for overall airline performance.

The bottom line is if the past is an indicator of future success, Alaska will turn problems into opportunities and remain atop the performance charts.

(Don C. Brunell is a business analyst, writer and columnist. He retired as president of the Association of Washington Business, the state’s oldest and largest business organization, and now lives in Vancouver. He can be contacted at [email protected].)