Alaska Air looking for ways to boost revenue
Published Tuesday, December 2, 2008
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Stumble It!ATLANTA -- An executive at Alaska Air Group Inc. said Tuesday the company is looking for ways to increase revenue as the weak economy puts pressure on demand for air travel.
Alaska Air operates Alaska Airlines and Horizon Air, which together serve more than 90 cities through their network in Alaska, Hawaii, the continental U.S., Canada and Mexico.
Brandon Pedersen, vice president of finance, said at the Credit Suisse Global Airlines Conference in New York that there may be a few markets where the Seattle-based company can increase fares.
He said the company has increased redemption levels for its frequent flier program, making it more expensive for customers to redeem miles for reward travel. Alaska Air charges for a second checked bag, but currently doesn't charge a fee for a first checked bag, Pedersen said.
On the demand side, Pedersen said that Alaska Airlines' occupancy rate based on advance bookings for December is up 3 points. It's up 3 points for January and up 1 point for February, he said. At Horizon Air, the occupancy rate based on advance bookings is flat for each of the three months, Pedersen said.
He said the company reaffirms previously announced plans for capacity cuts that will extend into next year.
"We think we have a realistic view of the world today," Pedersen said.
In September, Alaska Airlines said it would cut capacity by 8 percent this winter and slash up to 1,000 jobs. The carrier said the capacity reductions will start in November and continue into next year. At the time, it was disclosed that Horizon Air expects to reduce capacity in the fourth quarter by about 20 percent compared to the same period last year.
Last month, Alaska Air Group inked an expanded marketing alliance with Atlanta-based Delta Air Lines Inc. The move will help feed passengers to support new international routes Delta plans to launch next year. Delta's chief said at the time that the two carriers have not had any discussions about a combination.
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Closed minded executives have ruined the US Airline Industry. The solution is simple: develop new revenue streams.
Sell advertising on your seatbacks, on the overhead doors and on the sides of your planes. You have captive audiences for hours. Offer free digiplayers plastered with advertising, just like the television networks. There is a goldmine out there with your captive audience!
There are business models out there doing just this and charging passengers extremely low fares because they have diversified their revenue streams. Check out Ryan Air out of Ireland. Ryan AAir is able to sell seats on some routes for $1 each due to revenue diversification!
Your customers and employees are not liabilities, they are opportunities!!! Alaska Air Group merely needs to change their way of thinking about generating revenue.
At the same time Southwest has eliminated all extra fees and refuses to charge extra for baggage. How does -30 sound Southwest? We have lots of extra room at our new airport if you are interested.
They really need to take the word "Alaska" off their planes. First, we already were paying much more money per mile to get "down south" than their Lower 48 customers. Then it goes even higher due to fuel costs. This is followed by the $5 "snack packs," the extra bag charge, and the hike in frequent flier tickets. (Somewhere in there, it seems the flight attendants received "customer disservice" training as well...) It's come to the point where it is so expensive and so unpleasant to fly that some of us just chose to stay home.
Now fuel prices are finally dropping and they're looking for "new revenue streams" because no one wants to fly the overpriced, undersupported, unpleasant shell of what Alaska Airlines used to be? Oh, please!
While you're at it, why don't you send me some more of those great offers... for the valued customers in Lewiston, ID or any place that happens to not be in Alaska.
With the amount of money Brandon Pedersen makes, how can he say he thinks he has a realistic view of the world today? In fairbanks your only choice for flying is Alaska Airlines. It's too bad we can't stop the airlines from moving planes until they lower costs to fly.
How about lowering your fares and giving some example of service to the people of Alaska! How about cutting your over paid salary to ONE dollar a year like the auto industry CEOs' are doing to get the congress to bail there sorry asses out. CEO of Alaska air if you care about Alaska and the people who live here all year round then you will do exactly that. If not then remove the great word Alaska from your trash airline.
You continue to rape Alaskans with your outrageouse fares so you can give the outsiders lower fare offers. You and your trash airline should be ashamed!
Alaska Airlines has Fairbanks over a barrel and boy do they know it. The fares into and out of Fairbanks are outrageous, the service both on the plane and in the airport is horrible and has continuously gone downhill in the last ten years. I understand they want to raise revenue but if we have to pay even more shouldn't we at least get decent service . Finally there shipping rates are also outrageous. It would have cost me $150.00 to send my dog up to Fairbanks from Boston during the summer on Northwest but Alaska Air wanted to charge me $800.00 (as much as a ticket in coach).
Sell Pulltabs on the plane!
Strippers.
I agree with all of the people who've commented so far. I just want to point one thing out - the auto execs are saying they'll take a salary of $1 if Congress bails their sorry butts out; they didn't say anything about turning down their 5 million dollar bonus, and I'm sure that they won't. I could live on $5,000,001.
alaska air wanted 65000 flyer miles for a roundtrip ticket to california. Thats more than triple the miles that it was a year ago. How could they be hurting?
Since Alaska Air now partners with ERA and Frontier Flying watch them almost totally eliminate jet service between Fairbanks and Anchorage. That way they can meet their capacity reduction goals on our backs and not have to reduce their lower 48 capacity. The Alaska Air CEO is out of touch with his customers from Alaska. The way Alaska Air is treating we Alaskans they need to not onlt remove Alaska from the name but remove the Eskimo mural from the airplane tails and replace it with a large screw.
How about a mural of an empty wallet. My 15 year old daughter flew to Oregon, she had cash so she could eat on the plane, they no longer take cash, credit card only (information that could have been helpful at the ticket counter) On her way from Oregon to Fairbanks they said she might be able to purchase some type of a meal card in Seattle, but they weren't sure. They said sorry they can't help. Thanks Alaska Airlines.
When times were good , Alaska Airlines stuck it to you , Now they wonder why they are not loved !!! Plus they don't grease the jack screws . All in the name of saving money .
They could go the Southwest route. No food, no drinks, no service, no assigned seats. Just cattle call onto the plane, sit down and shut up for 3 hours. They overbook to absurdity and pull people off planes at will. Strange they want the world to see their flubs by putting it on national TV. I could do without airplane food or drink. Bring my own most of the time anyway. They sell a coach seat for $250 one day and $700 the next, might help to standardize the price to get more riders. Every empty seat costs them. A first class seat sells for $900 one way but you can buy an upgrade to a $250 seat for $100???? Something wrong with that math. Need some logic.
I personally don't have any complaints about Alaska Airlines. Their service has always been pretty good and I understand the reasons for their cutbacks.
As far as the article goes. If they want to earn more money they should sit back and look at the favorite places they fly too. If I were an Executive I would look (just for example) at Fairbanks and figure out the top 5 places Alaskans fly to in the next quarter. Say #1 is Anaheim. Then I talk to some major hotels and car rental companies and look for discounts on those types of things. Then I come up with some good package deals. I know they have package deals now, but they could do a lot better.
Offer some 2 for 1's on days the planes run with less passengers. You guys already know which time of the year is slow from past reports!
As far as not accepting cash on the airplane - that is ridiculous. Why not say if you don't have exact change then we can't help you. But to eliminate cash altogether is ridiculous!
Booze cruz to Seattle. Hookers, gambling, drinking, oh my.
yeah well how about when Alaska Airlines cancels a flight because, and I quote, "it wasn't full enough." So that's just a great big "F you" to all of us who were on said flight. They want to save by not flying the route...as if OUR time isn't worth something also? I am starting to hate Alaska. They take care of seattle and flush their commodes on the rest of our heads up here in AK.
i agree with both of NIceguy's posts. i think most alaska airlines customers would be much more willing to shell out $15 for a stripper than the rediculous $10 digiplayer.
Niceguy-If they put strippers and hookers on the plane, they'll have to hire an in flight doctor and have a medical lab and pharmacy to treat the diseases you'll come down with. Would you settle for virtual ho's? No sloppy seconds with that afterburn. Myself personally, I would pick the $10 digiplayer.
samiam: There was a US airline that tried this model - Skybus. And, they're already out of business. They didn't even last a full year. (http://en.wikipedia.org/wiki/Skybus_Airl...)
And, if Fairbanks was such a lucrative market for the airlines, why do Northwest, Delta, Air North, and Condor halt service over the winter? If there is so much money to be made here, why isn't Southwest already flying here. Hmm...makes one wonder...
AFAIC, Alaska Air started going down the toilet when they started flying back East.
That said, ASA--dock back the horns a little bit, and keep your flights west of Dallas and Denver. Even a farmer knows when to let a field lay fallow in hard times.
Who knows? If you do that you might return to that stellar outfit that I used to work for.
A former employee (at $7/hr)
They need to start charging fees to non-passengers. That's what American Airlines is doing, as reported here:
http://www.theonion.com/content/news/ame...
Thats what I say too NiceGuy, hookers, gambling, they WILL MAKE MONEY!! In the old days when we had several airlines coming into FBKS, it was MUCH better. Now we have one and look how it has treated us. LIKE CRAP!!!
And for all you complainers whining about not being able to use cash on the airplane here's a special comment just for you: IT'S 2008 - GET A CREDIT CARD!
I have a credit card, but my cash says right on it:
"This note is legal tender for all debts, public and private"
I believe that trumps your last statement libbylover.
I love the post that said to replace the eskimo with a giant screw!! That is classic
I bet if they offered more flights out at a lesser price they would sell out..... wicked fast!!
Hmm I have an idea. Just keep raising your prices. It used to be when i searched the travel sites AA turned up pretty cheap, but now they're being killed by the competitors. Anchorage to Seattles for $600 round trip? WTF. But I can fly Seattle to Boston, a 3 hour longer flight, for $240. Go figure.
hookers diseases strippers sounds like my exwife.
SouthWest out of Anchorage was the best flight I ever had. On time and no baggage issues. All the way to Florida and back. Ak Air cannot even get your baggage to you in state. Ak Air needs to get a clue.
Pat
pmcgraw: Southwest out of Anchorage? That'd be news to me! http://www.dot.state.ak.us/anc/travelerI...
Maybe it was NWA. It's easy to confuse....
vitrox you stated:
12/2/2008, 11:28 a.m. Suggest removal alaska air wanted 65000 flyer miles for a roundtrip ticket to california. Thats more than triple the miles that it was a year ago. How could they be hurting?
=====================
No Alaska isn't hurting, it's just greed.
Alaska Airlines boast it had saved $42.3 million in changing it's "Mileage Plan terms" according to their SEC filings and have also "hedged" (profited) from their fuel costs changes through an unnamed OTC third party. (Flint Hills refinery maybe?)
'$42.3 million. This benefit is recorded separately in operating revenues as "Change in Mileage Plan terms."'
See Alaska's third quarter SEC filing:
http://www.sec.gov/Archives/edgar/data/7...
from:
http://www.sec.gov/cgi-bin/browse-edgar?...
Get together with mexicos drug lords and form some sort of a partership with them for all thier shipping needs.Then layoff all those overpaid airport security guys.Ive herd UPS tried to make a go at it.And its just a matter of time before Fed Ex or some other airline thinks of it first. ELAlaska AIRLINES The only way to fly.
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