Alaska Airlines

Alaska Airlines Alaska Airlines For nearly 70 years, Alaska Airlines has served the west coast of North America. Alaska Airlines has grown from a small regional airline in 1932 to one today that carries more than 12 million customers per year. Alaskas route system spans more than 40 cities and primarily services four countries: Canada, United States, Mexico, and Russia. Its fleet of 88 Boeing jets is the youngest among all major airlines and it has earned U.S. airline recognition from Travel & Leisure and Cond Nast Traveler magazines. The foundation of Alaska Airlines began in 1932, when Mac McGee started flying his three-seat Stinson between Anchorage and Bristol Bay, Alaska.

In 1934, a merger with Star Air Service created the then-largest airline in Alaska. By the late 1940s, using surplus military aircraft, Alaska had branched into worldwide charter work, including the Berlin Airlift in 1948 and Operation Magic Carpet, the airlift of thousands of Yemenite Jews, to Israel in 1949. In the late 1960s, Alaska strengthened its operating base by merging with Alaska Coastal-Ellis and Cordova airlines, legendary Southeast Alaska carriers owned by aviation pioneers Shell Simmons, Bob Ellis and Mudhole Smith. Alaskas world now stretched from Fairbanks south to Ketchikan and down to Seattle. And in some of the coldest days of the Cold War, Alaska made headlines with regular charters to the Soviet Union. In 1972, Alaska Airlines faced severe financial difficulties.

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Fairbanks businessmen Ron Cosgrave and Bruce Kennedy were hired and they are credited with salvaging the airline, and winning the trust of creditors, employees, and customers by improving time performance and customer service. In addition, construction of the trans-Alaska pipeline brought a surge in business to the airline through the transport of supplies, equipment and workers. Finally, Cosgrave and Kennedy focused on customer service. In 1987, Alaska Airlines merged with Horizon Air and Jet America and increased its fleet five-fold. The following section provides an overview of the history of Alaska Airlines. Alaska Airlines History by Decade 1930s The company that ultimately became Alaska Airlines was born in 1932 when Linious Mac McGee painted McGee Airways on the side of a three-passenger Stinson and started flying out of Anchorage.

In 1934, McGee merged with Star Air Service, creating the largest airline in Alaska with 22 aircraft. Flying in those days wasn’t scheduled. You typically flew when the plane was full, be it passenger, furs or groceries. Finances were tight, but perseverance ruled the day. Business expanded in 37 with the purchase of Alaska Interior Airlines.

Late that year, McGee sold Star to a group led by one of his former pilots, Don Goodman, who renamed the carrier Star Air Lines. The 1938 creation of the Civil Aeronautics Authority to regulate airlines signaled the end of the true bush-flying era. 1940s Star Air Lines received most of the routes it wanted from the CAA but was denied the coveted Alaska/Seattle run. That went to Pan American. Star bought three small Alaskan carriers in 1942, changed its name to Alaska Star Airlines and then Alaska Airlines in 1944. The company grew despite a shortage of workers during the war, feuds with the CAB, and cash troubles that had employees paying for fuel out of their own pockets. In the late 40s, charter operations overshadowed scheduled service, and Alaska became the largest charter operator in the world.

Using surplus military aircraft, it flew everywhere, carrying food in the Berlin Airlift and refugees to the settlement of Israel. 1950s The airline expanded in 1950 with the purchase of two more small Alaskan carriers. Under CAB mandate, the far-flung charter business of the 40s was ended. But Alaska’s dream came true in 51, when it received authority to fly from Anchorage and Fairbanks to Seattle and Portland. The CAB forced what it considered a business-saving change in management a short time later.

As a result, Alaska’s financial footing was improved, though still tenuous, when Charlie Willis, a decorated World War II pilot, came aboard as chairman and CEO in 57. A born marketer, he ushered in one of the most colorful eras in company history, and brought in-flight movies to the nation’s skies for the first time. 1960s While the jet age was just coming to Alaska Airlines in the 1960s, the marketing age was in full stride. Flight attendants wore Gay 90s and Russian Cossack costumes. Charters were flying to Russia, and in-flight announcements were turned to rhymes.

A life vest neat is beneath each seat. They’re stored so we won’t lose em. Now fix your eyes on the stewardies. They’ll show you how to use em. Alaska became the first commercial carrier to fly the Lockheed Hercules, hauling drilling rigs to Alaska’s oil-rich North Slope and later to the jungles of Ecuador. The Boeing 727, the company’s signature aircraft for 25 years, joined the fleet in the mid-60s.

Alaska debuted in Southeast Alaska at Sitka in 67, and a year later merged with two long-time Southeast airlines, Alaska Coastal-Ellis and Cordova. 1970s Alaska was on the brink of collapse when the Board prescribed a change in management in 1972. A new team, led by Ron Cosgrave, took the helm. The financially faltering ship was righted, and pains were taken to improve customer service, particularly on-time performance. In 73, the company turned a profit and, for the first time in years, there appeared to be prospects for long-term stability.

Bruce Kennedy, an integral part of Cosgraves team, became CEO in 79, the same year U.S. skies were deregulated. Alaska was one of only three carriers that pushed for deregulation, knowing significant growth would be impossible without it. At the time, the airline served 10 cities in Alaska and one – Seattle – in the lower 48. Its fleet numbered 10.

1980s Alaska expanded in a measured, yet opportunistic fashion throughout the 1980s. Following the 79 start of service to Portland and San Francisco, expansion over the next five years brought Alaska to Southern California, Oakland, San Jose, Spokane, Boise, Phoenix and Tucson and saw resumption of service to Nome and Kotzebue. Revenues and profits soared. Alaska Air Group was formed in 85 as a holding company for the airline and a year later acquired Horizon Air and Jet America Airlines. In a move bolstering its north-south route structure and complementing the seasonal nature of travel to Alaska, the airline launched service to Mexico in 1988. Growth there has been dramatic. 1990s With the growing success of low-cost/low-fare carriers, the airline industry changed in fundamental ways in the 90s. Streamlining its cost structure and increasing aircraft utilization, Alaska Airlines reshaped itself faster and more comprehensively than any carrier all while maintaining a competitive advantage in customer service.

The new motto, For the same price, you just get more, resonated with customers. When coupled with an unmatched market presence on the West Coast, the recipe added up to record passenger traffic and greater profitability. An aggressive fleet modernization plan and a nationally recognized commitment to technological innovation have positioned the airline well as it moves into the new century. NTSB Statistical Data The following chart illustrates the statistical data available on incidents per Alaska/Horizon versus All Carriers: 1980-89 1990-95 1996-1999 2000 AA: B727 4 1 0 0 AA: B737 0 1 5 0 AA: deHaviland 1 0 1 0 AA: MD80 0 0 4 0 All: B727 154 48 36 4 All: deHaviland 101 46 52 6 All: MD80 7 3 9 1 All:B737 64 77 89 11 ( In Millions, Except Per Share Amounts) 1998 Revenues and Income Operating revenues $ 1,897.7 Operating expenses 1,686.7 Operating income 211.0 Net income 124.4 Basic earnings per share 5.32 Diluted earnings per share 4.81 Average number of common shares outstanding Basic 23.4 Diluted 26.4 Assets and Equity Total assets $ 1,731.8 Total shareholders equity 789.5 Return on shareholders equity 19.7% % Book value per share $ 30.11 Debt/ equity ratio 18: 82 Employees at year end 12,464 Shareholders of record at year end 4,687 Consolidated Financial Highlights Corporate Profile Alaska Air Group, Inc., is the holding company for Alaska Airlines and Horizon Air, Seattle- based carriers that collectively serve more than 70 destinations in the Western U. S., Canada, and Mexico. Alaska Air Group was organized as a Delaware corporation in 1985.

Alaska Airlines, Inc., an Alaska corporation founded in 1932, is noted for its award- winning customer service. The airline, which accounts for about 80% of Air Group revenues, provides scheduled air service to 36 cities in Alaska, Washington, Oregon, California, Nevada, Arizona, and British Columbia, plus six destinations in Mexico. Its major hubs are Anchorage, Seattle, Portland, and Los Angeles. Horizon Air Industries, Inc., a Washington corporation organized in 1981, is similarly noted for outstanding customer service. Horizon accounts for about 20% of Air Group revenues and provides air transportation to 40 destinations in Washington, Oregon, Idaho, Montana, California, British Columbia, and Alberta. Its major hubs are Seattle, Portland, and Boise.