While I was up in Seattle, I had the chance to sneak away from the APEX expo to go meet with the good people of Alaska Airlines. You already read about my visit to the Seattle airport, but I was also able to go over to headquarters and meet with a variety of people.
The headquarters itself really seems fitting for Alaska. It’s an unassuming building in a business area just south of the airport. The main entrance is just a tiny little room with a receptionist there waiting to help. Apparently there used to be a different entrance, but security procedures in recent years required them to lock it down in to this “cozy” spot.
The building is actually two buildings brought together by a long corridor (with awesomely large models of airplanes). The buildings use a very open floor plan with everything facing a large atrium in the middle of each – both have fountains that provide nice soothing background noise while you work. There are plenty of skylights and windows, likely to take advantage of the stray rays of sunlight that rarely find their way to Seattle. Surrounding the building, however, is dense jungle-like foliage giving it a very green feeling. It feels like the Pacific Northwest.
It was in this setting that I was able to meet with a bunch of different people in several areas at the airline. Led by Bobbie Egan, Manager of Media Relations, I spent time with Joe Sprague, Vice President of Marketing; Caroline Boren, Managing Director of Loyalty Marketing & Customer Advocacy; Andrew Harrison, Vice President of Planning & Revenue Management; Torque Zubeck, Managing Director of Alaska Air Cargo; Megan Lawrence, Managing Director of Governement and Community Relations; Paul McElroy, Managing Director of Strategic & Corporate Communications; and I even had the chance for a quick talk with President Brad Tilden and CEO Bill Ayer. It was an action-packed couple hours.
I’ll do my best to just stick to the more interesting parts of our conversation.
On the Mileage Plan frequent flier program
Joe Sprague explained that the program starts with the premise that Alaska is a small airline, so partnerships are important. Award redemption options are key, and Alaska has worked to maximize those opportunities by partnering with Air France/KLM, Air Pacific, American, British Airways, Cathay Pacific, Delta, Era, Icelandair, Kenmore Air, Korean Air, LAN, PenAir, and Qantas. You see a lot of SkyTeam and oneworld airlines in there – a nice perk that can’t be found in many other programs.
So the airline really focuses on providing options for frequent fliers and giving them reasons to keep coming back. Last year’s introduction of the new MVP Gold 75k level is an effort to keep people flying Alaska, giving the more reasons to stick around.
The recent changes in the route network have given the airline more to think about. Hawai’i, in particular is, as Caroline Boren suggested, a “key aspirational destination.” A lot of people want to redeem there, so it has provided new options to make the program more valuable. It has added to the utility of the program in the key markets of Portland, Seattle, and Alaska, but it’s also opened up new opportunities. It has built up more interest in the airline throughout California, where there are now 4 cities with nonstop service to Hawai’i. I wouldn’t be surprised to see more coming.
Because of that, fliers are showing more interest in Mileage Plan as they start flying Alaska. So far, that strategy has worked well. The focus has been on bringing people to Hawai’i but not necessarily on those who are in Hawai’i already. That’s changing a bit – they’ve just hired a local sales and marketing person there.
On the Eskimo
I posed a reader question about the relevance of the Eskimo on the tail these days, and Joe explained that the question has been raised for about 25 years at least – ever since expansion went into Southern California and Mexico. But the company identifies with the Eskimo and “there is no ignoring how important the State of Alaska is to our company.” That doesn’t mean it won’t get a refresh to appeal to younger generations if needed at some point, but he “would be surprised if the Eskimo came off the tail.”
On Technology
Alaska is working hard to appeal to younger generations via technology. Part of that is technology – a redesign of the website, a mobile redesign coming, new apps for smartphones (Android coming soon), and yes, wifi on airplanes. When I asked about wifi usage, I was told it was “similar to every other airline.” Translation: not much. But Joe did say that routes like Seattle to Newark and Washington had 3 times the usage because of their length and business-focus.
I asked about the all-important question of onboard power. It’s debated a lot internally, but I heard some of the same refrains I hear elsewhere – battery life is improving, etc. I’m not getting my hopes up despite my belief that it’s essential. Instead, it sounds like we might see more effort to have charging stations on the ground to make it less necessary in the air but that’s about it for now.
On Partnering with Delta and American
Andrew Harrison was very clear in saying that it’s a huge advantage for Alaska to have partnerships with both those Delta and American. It gives Alaska the national reach it needs for its frequent fliers, and it also gives American and Delta a stronger west coast presence where they wouldn’t otherwise have one.
But how does he keep the peace while managing relationships with two rivals? He at one point compared it to an airline providing feed as an Express carrier. Airlines like SkyWest and Republic work with rival mainline airlines, and Alaska is providing the same utility in that sense. Of course, the branding is very different from an Express operation, but the idea is the same. Alaska fills a need for both airlines, and Andrew and the rest of the Alaska Airlines team make it work.
On Codesharing
I mentioned the issues that exist with codesharing and asked if Alaska was trying to fix some of those problems. Andrew affirmed that he thinks codesharing provides great benefit, but there are issues. With that in mind, Alaska is actively working with partners to make it a better experience. He said a classic example is when you get to AlaskaAir.com to check in but it’s a codeshare flight and you can’t. Those are the kind of things they need to resolve, and it sounds like there is a lot of effort going toward that in the next year.
On the Fleet
There really wasn’t much to say about the fleet. The airline is pretty happy these days. Horizon’s turboprop fleet is working well and now with the CRJ-700s at SkyWest, Horizon can focus on what it does best. For Alaska mainline, the airline loves the 737-800 and is excited for the 737-900ERs. But what about MAX, the new 737 derivative. Nothing to report just yet. “We’re waiting to hear more.”
On Cargo
I really enjoyed speaking with Torque Zubeck about cargo since it’s so important to the airline. Beyond cargo in the belly, there are 5 737-400 Combi aircraft that seat 72 in the back with cargo space up front. (A normal 737-400 for Alaska seats 144.) There is also 1 dedicated 737-400 freighter. As you can imagine, most of these get their workouts up in Alaska, where cargo and people often have little choice but to go by air. Those 737s are soliders up in the north. They’ve only been in service as combis and freighters for a couple years, replacing the old 737-200 Combis, but there has already been discussion about what will replace them when the time comes. I don’t expect to see that soon, however.
Those were the broad points, but I do have one or two more posts on individual topics in the hopper. Look for those in the next few weeks. If you have any specific questions about one of these topics, drop it in the comments and I’ll do my best to expand upon our conversations.
