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About Alaska Air Group, Inc

The fifth-largest airline in the US, Alaska Air Group ferries more than 46 million passengers each year to nearly 120 destinations through its two carrier brands, Alaska Airlines and Horizon Air. It completes an average of 1,200 flights per day from the US, Canada, and Mexico. The group's primary hub is Seattle (accounting for around three-quarters of passengers), but it also flies out of key markets such as Portland, Oregon; Los Angeles; and Anchorage, Alaska. Alaska Airlines' fleet comprises about 160 Boeing 737 and about 40 Bombardier Q400 turboprops. Alaska Air Group expanded in 2016 with the acquisition of Virgin America and wasted no time integrating the company and eliminating the Virgin America brand.

Operations

Alaska Air comprises three reportable segments, Mainline, Regional, and Horizon.

The Mainline segment accounts for some 80% of Alaska Air's sales and offers long-haul flights from the western US, particularly Seattle, Portland, and the Bay Area, throughout the US, Canada, Mexico, and Costa Rica on its 162 Boeing 737s and 71 Airbus A320s. It also includes cargo services mainly to and within Alaska.

Alaska Air's Regional business consists of shorter-haul flights operated by Horizon, SkyWest, and PenAir (collectively Air Group), which together carry around 10 million passengers annually in Washington, Oregon, Idaho, and California. Horizon's fleet, which carries some 70% of Air Group's regional passengers, comprises 26 E175 jets and 39 Bombardier Q400 turboprops. The Regional segment generates 15% of Alaska Air's sales.

The Horizon segment brings in the remaining 5% or so of sales. It consists of capacity sold to Alaska under capacity purchase agreements.

Geographic Reach

Alaska Air Group serves nearly 120 destinations through an expansive network in Alaska, the contiguous 48 states, Hawaii, Canada, Costa Rica, and Mexico. The company leases operations, training, and aircraft maintenance facilities in Portland and Spokane, as well as line maintenance stations in Boise, Bellingham, Eugene, San Jose, Medford, Redmond, Seattle, and Spokane. It also leases call center facilities in Phoenix and Boise.

Sales and Marketing

Alaska Air's airline tickets are distributed through the airline's website and through traditional and online travel agencies. The travel agencies use global distribution systems to obtain fare and inventory data from airlines and reservation call centers, located in Phoenix; Kent, Washington; and Boise, Idaho.

As its name implies, Alaska Air Group transports more passengers between Alaska and the US mainland than any other airline. Besides its own flights, the passenger segment provides passenger service through contracts with SkyWest Airlines and Peninsula Airways.

Financial Performance

Alaska Air's revenue has achieved lift-off in recent years as the Virgin America acquisition took sales to new heights.

In 2018 the company's sales grew 5% to $8.3 billion as network expansion and aircraft additions expanded Mainline capacity by 5%, helping Alaska Air grow passenger numbers by 1.8 million. The Regional business took delivery of 25 new E175s, growing capacity by 20%.

Net income fell sharply in 2018, down 54% to $437 million, as increases in oil prices had a knock-on effect on Alaska Air's fuel costs, to the tune of roughly $500 million. Wages and benefits also grew substantially due to a 7% increase in full-time employees, a result of general business growth and certain ground-handling positions being taken in-house.

Alaska Air's cash on hand fell $83 million during 2018, ending the year at $114 million. The company's operations generated $1.2 billion, while its investing activities used $631 million and its financing activities used $647 million. Alaska Air's main cash uses were aircraft and other flight equipment purchases, capital expenditures, net payments of long-term debt, and dividends.

 

Strategy

After the milestone acquisition of Virgin America in 2016, Alaska Air wasted no time integrating the company its operations and discontinuing the Virgin America name. Airline mergers typically take years to complete due to the messy nature of integrating booking, maintenance, and dispatch systems, combining labor unions, training cabin crew, and repainting and retrofitting jets. But Alaska had Virgin America more or less fully integrated by the start of 2019.

To bring the acquired Virgin America jets (all Airbuses, compared to Alaska's previously all-Boeing fleet) in line with its flight strategy, Alaska added more first class seats, fitted seats with tablet holders and power outlets, enabled satellite WiFi, and introduced an extra-legroom section. 

 

Alaska Air Group, Inc

19300 INTERNATIONAL BLVD
Seatac, WA 98188-5304
Phone: 1 (206) 392-5040

Stats

Employer Type: Publicly Owned
Stock Symbol: ALK
Stock Exchange: , NYSE
Managing Director: Ryan Butz
President and COO, Alaska Airlines: Benito Minicucci
Chairman, President and CEO, Alaska Air Group, Inc., Chairman and CEO, Alaska Airlines, Inc., and Chairman, Virgin America and Horizon Air Industries, Inc.: Bradley D. Tilden
Employees (This Location): 114
Employees (All Locations): 23,376

Major Office Locations

Seatac, WA

Other Locations

Anchorage, AK
Bethel, AK
Cordova, AK
Fairbanks, AK
Gustavus, AK
Juneau, AK
Ketchikan, AK
King Salmon, AK
Kodiak, AK
Petersburg, AK
Prudhoe Bay, AK
Sitka, AK
Wrangell, AK
Yakutat, AK
Phoenix, AZ
Burbank, CA
Costa Mesa, CA
Fresno, CA
Los Angeles, CA
Oakland, CA
Ontario, CA
Palm Springs, CA
Sacramento, CA
San Diego, CA
San Jose, CA
Denver, CO
Washington, DC
Fort Lauderdale, FL
Tampa, FL
Honolulu, HI
Kailua Kona, HI
Hailey, ID
Lewiston, ID
Chicago, IL
Indianapolis, IN
Boston, MA
Minneapolis, MN
Kansas City, MO
Saint Louis, MO
Belgrade, MT
Billings, MT
Helena, MT
Kalispell, MT
Morrisville, NC
Newark, NJ
Las Vegas, NV
Reno, NV
Eugene, OR
Medford, OR
Portland, OR
Redmond, OR
Nashville, TN
Austin, TX
Humble, TX
San Antonio, TX
Salt Lake City, UT
Bellingham, WA
East Wenatchee, WA
Kent, WA
Pullman, WA
Seatac, WA
Spokane, WA
Walla Walla, WA
Yakima, WA
Edmonton, Canada
Kelowna, Canada
Sidney, Canada
San Jose Del Cabo, Mexico