Growing Forward

Alaska Airlines Navigates Growth With Advanced Technology And Processes

A trendsetter in both leisure and business travel, Alaska Airlines continues to forge a path to a promising future through strategic implementation and utilization of the latest, most powerful technological tools.

Without the latest technology, industries cannot advance. And that’s especially true for airlines. Through innovative application of the latest technology, as well as considerably more automated delineation of decision parameters, they can broadly differentiate themselves from the rest.

At Alaska Airlines, effective application of the latest technology is a given. But that wasn’t always the case. In 2003, top management realized the airline’s systems required a significant upgrade, and a change was undertaken. Today, Alaska Airlines continues to successfully evolve, as it has throughout its storied history.

That history provides a solid foundation upon which the airline is building an integrated, more effectively automated future.

Serving More Passengers

Seattle, Washington-based Alaska Airlines is the seventh-largest U.S. airline based on passenger traffic. It is the dominant U.S. West Coast airline, and it carries more passengers between the state of Alaska and the Lower 48 than any other airline.

A Tradition Of Trailblazing Innovation

Alaska Airlines has long been a trendsetter in multiple aspects of air travel, both for business and leisure destinations within and outside of Alaska.

The Seattle-based carrier’s repertoire of highly desirable routes continues to expand. Recently, for example, the airline significantly enlarged its overall U.S. footprint when it initiated service to destinations, including Albuquerque, New Mexico; Tampa, Florida; New Orleans, Louisiana; Detroit, Michigan; and Baltimore, Maryland, as well as adding Cancun to its bevy of vacation destinations in Mexico.

These additions augment an Alaska Airlines flight schedule that has been expanding beyond the impressive array of destinations it had already been serving. The frequency increases will further enhance the airline’s presence at its Seattle hub, with 27 additional daily flights by spring 2015.

That’s an increase of 11 percent in Alaska Airlines’ schedule at the hub, raising its daily flight count there to 280.

The expansion fits the pattern for Alaska Airlines.

New destinations and innovative service have always been part of the airline’s pioneering spirit, matching the vibrant mindset of its namesake state and the adventurous attitude of the general populace of the airline’s headquarters city of Seattle.

Even more to the point, Alaska Airlines has chosen throughout its existence, which now dates back (counting the airline’s predecessor companies) more than 80 years, to not only be a technology leader but to use that advanced technological capability to solve difficult transportation problems and initiate customer service that is globally known and admired.

Alaska Airlines, along with its sister carrier Horizon Air (which flies turboprop equipment on shorter routes), was the first airline in North America to introduce online flight booking in the 1990s. Additionally, Alaska Airlines was the first in the industry to enable customers to check in and print their boarding passes using the Internet. Then, in the early 2000s, Alaska and Horizon introduced wireless check-in.

Furthermore, among the innovative features Alaska Airlines has advanced through its “airport-of-the-future” concept are check-in kiosks and bag-check stations, which have effectively diminished, and in some cases, eliminated the need for customers to visit the front desk, allowing quicker check-in and more efficient movement of passengers through the airport.

In addition, the airline also helped develop and pioneer the implementation of highly advanced navigational technology to more safely keep flights on schedule even in challenging weather, which the airline frequently encounters in many of its Alaska destinations, and in congested airspace situations such high-flight-traffic markets in New York and Washington, D.C.

Regional Carrier Horizon Air

Alaska Airlines’ sister company Horizon Air, a regional airline serv- ing shorter routes using turboprop aircraft), flies to 42 cities in Alaska, California, Idaho, Montana, Oregon, Washington, Baja California Sur (Mexico), and Alberta and British Columbia in Canada.

Proven Technological Leadership

Clearly, the technology leadership of Alaska Airlines is well established. But a new chapter in the Alaska Airlines technology-leadership story has been written within the past 10 to 12 years.

In 2003, recognizing the dated nature and sometimes stark inadequacies of its previous systems, Alaska Airlines implemented advanced technology from Sabre Airline Solutions® in several areas including schedule planning and codeshare as well as airport personnel management. Since then, it has been able to address and anticipate many industry issues through the technological applications and innovative adaptation of solutions to fit the airline’s specific needs.

From 2003 through 2013, Alaska Airlines achieved an impressive 44 percent growth in available seat miles, due, in large part, to its superior technological capabilities. Today, it has more than 300,000 flights in its network and earns about US$4.5 billion in annual revenue.

More recently, Alaska Airlines’ overall capacity increased 5 percent in the second quarter 2014, and its schedules have expanded capacity by 8 percent in the third quarter 2014 and up 11 percent in the fourth quarter.

So the question is: How has Alaska Airlines achieved its run of success, especially under sometimes-trying economic circumstances?

The answer is found in the airline’s highly effective application of its technological prowess to move toward more thorough automation of processes, thereby greatly enhancing overall efficiency.

For example, nearly 10 percent of the carrier’s annual revenue is generated by its airline codeshare partnerships. Performed manually, even with just one partner, the codeshare revenue-maximization process is, in general, incredibly complex.

However, by applying the parameters of its codeshare management system, Alaska Airlines is able to manage the synchronization of schedules with those of its 14 partner airlines through automation and schedule alerts. The system also ensures Alaska Airlines’ code or its partners’ codes are placed on the best connecting flights, thus maximizing codeshare traffic.

Moreover, in its plans for substantial growth, Alaska Airlines will continue to rely on the latest in automation development. This includes applying its schedule management system to develop and maintain a complex schedule, in addition to tracking and rapidly responding to market and competitive changes.

Also, there’s integration between its schedule planning and reservations systems to automate the schedule-change process, as well as a rules-based engine within the schedule planning system for adding commercial elements to the schedule before publication, rather than manually or via in-house automation.

Self-Bag Tagging

In 2013, Alaska Airlines and Horizon Air became the first to introduce self-bag tagging, giving customers the opportunity to print their bag tags at home. Those who choose to self-tag enjoy a designated Self-Tag ExpressTM lane at the airport. The program began on routes between Seattle and Hawaii, and the airlines continue to expand this service to more cities.

In addition, Alaska Airlines leverages its fleet management system to help assign the most appropriate aircraft type to each flight leg by combining economic and operational information from across the airline to create fleet recommendations that are feasible and most potentially profitable.

One of the innovative ways Alaska Airlines applies its advanced fleet management technology is in the proactive management of close-in re-fleeting situations.

Close-in re-fleeting involves meticulous analysis of near-term schedule factors, usually defined as about 10 days to 17 days prior to departure, and evaluation of “booked” versus “planned” passenger demand.

Analyzing the schedule in this manner, the airline is able to identify instances in which booked demand is higher or lower than capacity in a given market.

In practical application, Alaska Airlines calculates booked versus planned passenger demand using its revenue management solution. It applies revenue management and scheduling solutions to make aircraft changes that better match capacity with demand, thereby preserving the customer experience, accommodating more passengers and ultimately maximizing revenue.

A Future Of Growth

Alaska Airlines is committed to a future of growth, enabled largely through its advanced and pioneering technological capabilities and broader application of automated performance.

Sabre Airline Solutions will continue to upgrade and improve products, as well as develop new ones, to support the airline’s growth as it forges its way to new destinations and further expands its presence to better serve customers.

“We chose Sabre’s solutions because of their advanced visualization techniques and data integration, as well as communication with other systems,” said Andrew Harrison, Alaska Airlines senior vice president of planning and revenue management. “Since their implementation, the products have delivered the results Alaska Airlines was expecting.”