Careers at Alaska Airlines
Alaska Airlines’ mission is to be one of the most respected U.S. airlines by its customers, employees, and shareholders.
Linious “Mac” McGee was an entrepreneur with a fur-buying operation in Alaska. In 1931 he partnered with his friend, pilot Harvey Barnhill, to buy a three-passenger Stinson plane that could be used for his business. However, by 1932 the two were using the plane to offer charter flights to local residents. Barnhill soon left and McGee took over, naming the company “McGee Airways.”
The airline grew to seven planes, but it struggled due to the Great Depression and the seasonal Alaskan economy. To keep it afloat, McGee merged it with Star Air Service in 1934, taking on Star’s name and bringing its portfolio to 15 planes – the most of any Alaskan airline. In 1938 it faced change when Congress created the Civilian Aeronautics Authority (CAB) to regulate the industry.
Still struggling financially, Star was purchased by New York businessman Raymond Willett Marshall in 1941. In 1942 Star purchased three other Alaskan airlines and a hangar. Reflecting its broad scope, the airline was renamed Alaska Star Airlines, changing to Alaska Airlines in 1943. Alaska Airlines is now part of the holding company Alaska Air Group, along with Horizon Air Industries.
Benefits at Alaska Airlines
Business model of Alaska Airlines
Alaska Airlines has a mass market business model, with no significant differentiation between customer segments. The company targets its offerings at all consumers seeking low airfare.
Alaska Airlines offers six primary value propositions: innovation, pricing, cost reduction, performance, risk reduction, and brand/status.
The company has embraced innovation from the beginning, with examples including the following:
- Became the first airline to use the Head-Up Guidance System, used to reduce disruptions caused by fog, during a passenger-carrying flight (1989)
- Became the first U.S. airline to offer flights and sell tickets through the Internet (1995)
- Became the first airline to integrate GPS with Enhanced Ground Proximity Warning System (EGPWS) technology (1996)
- Became the first U.S. airline to provide an online check-in option (1999)
- Introduced wireless check-in using a wireless device or web-enabled phone (2001)
- Became the first scheduled-service passenger carrier to operate a flight using Wide Area Augmentation System (WAAS) technology (2009)
- Became the first airline to use iPads in the flight deck (2011)
- Offers service at check-in kiosks, enabling travelers to avoid ticket counters
- Offers biometric (fingerprint) access options for members of its Board Room lounges
The airline offers a pricing value proposition. When customers book a reservation on its website or through one of its agents, the lowest available fare at the time is identified. If a customer finds a cheaper fare for the flight on the company’s or a rival’s site, it will refund or credit the difference.
The company reduces costs through various initiatives. It offers discounts through group deals and vacation packages. It also enables travelers to earn bonus miles for flying with its global partners.
The company has demonstrated strong performance through tangible results. It was the first airline to guarantee checked baggage delivery to the carousel within 20 minutes.
The company reduces risk. 100% of its aircraft technicians have completed the requirements for the Federal Aviation Authority’s "Diamond Certificate of Excellence" award – representing the 14th consecutive year it has received the honor. Alaska Airlines also posts travel advisories on its site.
The company has established a strong brand due to its success. Combined with sister company Horizon Air, it transports 32 million customers annually to over 110 cities with an average of 970 flights daily. It provides more non-stop flights from Seattle than any other air carrier. Lastly, it has won many honors, including "Highest in Customer Satisfaction among Traditional Carriers in North America" in the J.D. Power North American Airline Satisfaction Study for nine years in a row (2008-2016) and the #1 major North American carrier in on-time performance by FlightStats (2016).
Alaska Airlines’ main channel is its website, AlaskaAir.com, which accounts for 60% of its revenues.
Its other major channels are traditional travel agencies (23% of business), online travel agencies (11% of business), and reservation call centers (6%). The company promotes its offering through its social media pages, TV and online advertising, sports sponsorships, and participation in conferences.
Alaska Airlines’ customer relationship is primarily of a personal assistance nature. Customers are transported by a pilot and receive in-flight service from flight attendants.
That said, there is a self-service component in the form of the ability to book reservations online. In addition, customers can sign up to receive updates on discount offers through e-mail.
Alaska Airlines’ business model entails providing quality service for its passengers.
Alaska Airlines maintains partnerships with 16 other airlines that provide benefits to its customers. The alliances fall into the following categories:
- Frequent Flier Agreements - Offer mileage credits and redemptions for the company’s Mileage Plan members.
- Codeshare Agreements - Allow one or more marketing carriers to sell seats on a single operating carrier that services passengers under multiple flight numbers.
- Interline Agreements - Allow airlines to jointly offer a competitive, single-fare itinerary to customers traveling via multiple carriers to a final destination.
The company’s specific partners are as follows: Aeromexico, American Airlines, Air France, British Airways, Cathay Pacific Airways, Delta Air Lines, Emirates, Icelandair, Hainan Airlines, KLM, Korean Air, LAN S.A., Fiji Airways, Qantas, Rav’n Alaska, and PenAir.
Alaska Airlines’main resources are its planes and its human resources, who include the agents who book reservations, the customer service staff members who provide support, the pilot staff members that fly its aircraft, and the flight attendants that provide on-flight service.
Alaska Airlines has a cost-driven structure, aiming to minimize expenses through significant automation and low-price value propositions. In 2015 it lowered its unit costs (excluding fuel) by 0.7%, representing the sixth year in a row of such annual reduction.
Its biggest cost driver is likely cost of services, a variable expense. Other major drivers are in the areas of sales/marketing and customer support/operations, both fixed costs.
Alaska Airlines has two revenue streams:
- Passenger Revenues – Revenues generated from the sale of tickets for flights (mainline and regional).
- Other Revenues – Revenues generated from freight and mail services as well as the sale of ancillary products/services such as on-board food and beverages and bag check-ins.
info: Brad earned a BBA at Pacific Lutheran University and an Executive MBA from the University of Washington. He previously served as Chief Financial Officer, Corporate Controller, and Executive Vice President of Finance and Planning at Alaska Air Group.
info: Ben earned Bachelor's and Master's degrees in Mechanical Engineering from the Royal Military College of Canada. He previously served as VP of Seattle Operations and Staff VP of Maintenance and Engineering at Alaska Airlines.
info: Brandon earned a Bachelor’s degree in Business Administration and Economics at the University of Washington. He previously served as VP of Finance and Controller at Alaska Air Group and as a Partner at KPMG.
info: Andrew earned a Bachelor of Commerce degree at the University of Melbourne. He previously served as SVP of Planning and Revenue Management at Alaska Airlines and Horizon Air, and as a Senior Manager at KPMG.
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