AK Air bounces back after 9/11

Challenges after attacks spur airline to expand its services

Posted: Wednesday, February 13, 2002

Five months after the terrorist attacks of Sept. 11 caused the nation's airlines to curtail service and lay off tens of thousands of employees, Juneau's only carrier, Alaska Airlines, has resumed its full flight schedule - without having to furlough anyone.

"We are the first of the majors back on plan," said Susan Bramstedt, the airlines' public affairs officer for Alaska.

"2001 wasn't pretty for us before the 11th, but that (terrorism) exacerbated the situation way beyond anything anyone could have forecast," said Joseph Sprague, director of regional sales-Alaska, during a recent visit to Juneau.

Alaska Airlines was operating only 65 percent of its flights when carriers were allowed to return to the air several days after Sept. 11, Evans said, but quickly returned to 75 percent, and then 85 percent for the remainder of the quarter. However, Evans made clear, those reductions did not apply to its Alaska service.

"Because folks in Alaska are much more dependent on air travel, we got up to 100 percent within a few days, including Juneau and Southeast," Evans said. "We didn't think we could call ourselves 'Alaska Airlines' if we couldn't provide that service."

As a result, passenger numbers for the fourth quarter of 2001 were down only 5.6 percent compared to the fourth quarter of 2000.

Alaska Air scrambled to avoid the layoffs and cutbacks its competitors experienced.

"We tried to stay nimble and take advantage of opportunities like regular flights to Denver and flights from Alaska to Washington, D.C.," Sprague said. "When we were made to leave National Airport (the airport closest to the White House), quick as Ed White (customer service representative) could arrange it, we started to serve Dulles," another Washington airport. The Denver flights will begin in April.

By inaugurating new flights, Alaska Air is one of the few airlines in the United States that managed to avoid layoffs, Sprague said.

"We did not think it made sense to lay off people for a month or two or three," said White. "Our strength is our folks. We allowed people to take voluntary time off, and did creative scheduling without an involuntary reduction in force."

Sept. 11 caused a decrease in earnings, exacerbated, Evans said, by "the aftereffects of Flight 261," a crash off California on Jan. 31, 2000, which killed all 88 aboard. For the year 2001, Alaska Air Group had a loss of $39.5 million or $1.49 per share. For the year 2000, when Flight 261 crashed, the loss was $13.4 million or 51 cents per share. (Alaska Air Group is the parent company of Alaska Airlines and Horizon Air.)

Like other major carriers, Alaska Airlines received emergency funds from federal sources soon after Sept. 11. As of Jan. 25, they had received $81.4 million in federal assistance, Evans said. "We have submitted an application for the remaining funds we can apply for," which he expects to be an additional $12.3 million.

These funds were to compensate for reduction of income due to reduction of services. The loss includes the emergency assistance.

The pause in regular service after Sept. 11 caused Alaska Airlines "to take a different perspective, and look further East," said Jack Evans, manager of corporate communications.

"Because of 9/11, we really focused on our hubs and the service it made sense to provide," Evans said Monday. "We realized that at Seattle, which is our largest hub, we control about 44 percent of the flights. Other carriers tend to fly larger numbers from their hubs, so we decided to (increase our flights) and compete more with other major carriers, like United."

Alaska Air realized that many of the requests of frequent fliers out of Seattle were for Denver flights, so it will inaugurate three daily flights to Denver on April 25, timed so Juneau residents can make the connection. On April 4, Alaska will begin a daily flight from Seattle to Boston.

In the last few months, several new flights were added:

• In November, service to Ronald Reagan National Airport, in Washington, D.C.

• In December, service to Cancun, Mexico, from Los Angeles, timed so Alaskans can make the connections.

• On Feb. 8, flights to Calgary, Alberta.

Service to Reagan National actually began exactly a week before Sept. 11, but was shut off for security reasons and reopened in phases, Evans said. "As the newest carrier (to Reagan), we were well down the list to restart, so we did not actually restart until November. Then we made the decision to continue flights to Dulles. Both flights have been performing well above our expectations," Evans added.

As of the close of 2001, Alaska Airlines has 11,025 employees, both full- and part-time. It owned 102 planes. It served 44 cities, including six in Mexico; plus 75 cities, with its Horizon flights. States served are Alaska, Washington, Oregon, California, Arizona, Nevada, and Illinois, plus the District of Columbia.

The company will acquire the first of its 900 series 737s in October, although it has postponed acquiring three more until 2003.

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