flx757
I gotta have more cowbell
- Joined
- Mar 6, 2002
- Posts
- 1,356
A bit (emphasis on "bit") of good news?! But, it seems these days good news comes with a price tag attached.
Alaska to grow 6.5% in '04
Ayer tells shareholders airline will continue to focus on
lowering costs to achieve profitability and job security for employees.
Posted May 24, 2004
Alaska Airlines expects to grow its capacity about 6.5 percent this year, thanks to greater aircraft utilization and fleet expansion, Chairman and CEO Bill Ayer told the nearly 200 people gathered last week at Seattle’s Museum of Flight for the annual shareholders meeting of Alaska Air Group.
But the forecast for next year is lower growth.
“Until our unit costs are where they need to be, it makes no sense to expand,” Ayer told the assembly.
The 2004 growth derived from higher utilization of the fleet plus the full-year effect of aircraft additions last year. In 2003, there was a net addition of seven aircraft, as the airline retired four and took delivery of 11 new ones last year. Only two aircraft deliveries -- both 737-800s -- are planned for 2005.
FACING UP: Alaska Airlines Chairman and CEO Bill Ayer spelled out the "brutal facts" confronting the airline industry and Alaska Air Group during the annual shareholders meeting in Seattle.
In response to a question from the floor, Ayer said Alaska Airlines remains firmly committed to providing cargo service to the smaller communities in Alaska.
In fact, the airline is in discussions with two aircraft manufacturers to determine whether they can modify 737-400s or 737-300s to suit Alaska’s need for new combi planes to replace its aging 737-200Cs that ferry people, freight and mail throughout the Great Land.
Asked by Anchorage-based Alaska pilot Captain Mike Buckley about the commitment to cargo service in Alaska, Ayer said the service is a “vital link” for the state but that the growing cost to maintain the 737-200Cs makes them uneconomical. If discussions about the 737-400 or -300 retrofits succeed, an announcement about the replacement timeline could be made later this year.
Another Alaska pilot, Captain Mark Bryant, ALPA’s MEC chair, asked Ayer what his strategy is to reach a mutually beneficial agreement with Alaska’s pilots on a new labor contract.
Ayer said “honest communications about the brutal facts of the airline industry” and dedication to “finding a common ground” for fulfilling the Alaska 2010 vision to achieve profitability, growth and a secure future would be his approach.
Ayer touched on this point later in his summary of Alaska’s plans to meet the challenges visited by the industry’s turmoil and stiff competition from low-cost carriers.
Q&A: VP Marketing Gregg Saretsky talks with shareholders following the formal meeting.
He said permanent cost reductions of $307 million must be accomplished. More than $80 million already has been achieved. And another $70 million in reductions is in process. Other initiatives to bring down costs, he said, include market-based adjustments to wages, benefits and work rules, coupled with product changes and a series of management initiatives to improve efficiency and effectiveness. All together, he said, these measures can yield a cost structure that supports consistent profitability.
“Long term profitability is the only thing that ensures a secure future for employees,” Ayer said.
In response to a question about high fuel prices, Ayer said Alaska is working hard to reduce fuel consumption. Newer, more fuel-efficient aircraft are helping.
Another effective fuel-saving strategy is, “tankering.” This involves balancing whether it is more cost-effective for an aircraft to carry extra fuel on certain flights in order to avoid refueling at stations with particularly high prices. Or, whether it is better to carry only enough fuel to safely complete a flight. “It costs fuel to carry fuel,” Ayer noted.
Other fuel saving measures involve the fuel purchasing strategy called “hedging.” Hedging enables Alaska to level out some of the higher cost by buying fuel for delivery at a future date at a known price. Ayer said about 40 percent of this year’s fuel is hedged.
Notable:
Four of 10 shareholder proposals passed. Most of the 10 proposals were discussed by Steve Nieman, a pilot at Horizon Air. The four adopted dealt with voting procedures, including a call for simple majorities when balloting on proposals submitted by either the board of directors or shareholders.
Ayer was re-elected to a three-year term on the board of directors. Re-elected with him on the board-recommended slate were Dennis F. Madsen, president and CEO of Recreational Equipment Inc, Seattle; R. Marc Langland, president of Northrim Bank, Anchorage; and, John V. Rindlaub, CEO, Pacific Northwest Region, Wells Fargo Bank, Seattle.
Alaska to grow 6.5% in '04
Ayer tells shareholders airline will continue to focus on
lowering costs to achieve profitability and job security for employees.
Posted May 24, 2004
Alaska Airlines expects to grow its capacity about 6.5 percent this year, thanks to greater aircraft utilization and fleet expansion, Chairman and CEO Bill Ayer told the nearly 200 people gathered last week at Seattle’s Museum of Flight for the annual shareholders meeting of Alaska Air Group.
But the forecast for next year is lower growth.
“Until our unit costs are where they need to be, it makes no sense to expand,” Ayer told the assembly.
The 2004 growth derived from higher utilization of the fleet plus the full-year effect of aircraft additions last year. In 2003, there was a net addition of seven aircraft, as the airline retired four and took delivery of 11 new ones last year. Only two aircraft deliveries -- both 737-800s -- are planned for 2005.
FACING UP: Alaska Airlines Chairman and CEO Bill Ayer spelled out the "brutal facts" confronting the airline industry and Alaska Air Group during the annual shareholders meeting in Seattle.
In response to a question from the floor, Ayer said Alaska Airlines remains firmly committed to providing cargo service to the smaller communities in Alaska.
In fact, the airline is in discussions with two aircraft manufacturers to determine whether they can modify 737-400s or 737-300s to suit Alaska’s need for new combi planes to replace its aging 737-200Cs that ferry people, freight and mail throughout the Great Land.
Asked by Anchorage-based Alaska pilot Captain Mike Buckley about the commitment to cargo service in Alaska, Ayer said the service is a “vital link” for the state but that the growing cost to maintain the 737-200Cs makes them uneconomical. If discussions about the 737-400 or -300 retrofits succeed, an announcement about the replacement timeline could be made later this year.
Another Alaska pilot, Captain Mark Bryant, ALPA’s MEC chair, asked Ayer what his strategy is to reach a mutually beneficial agreement with Alaska’s pilots on a new labor contract.
Ayer said “honest communications about the brutal facts of the airline industry” and dedication to “finding a common ground” for fulfilling the Alaska 2010 vision to achieve profitability, growth and a secure future would be his approach.
Ayer touched on this point later in his summary of Alaska’s plans to meet the challenges visited by the industry’s turmoil and stiff competition from low-cost carriers.
Q&A: VP Marketing Gregg Saretsky talks with shareholders following the formal meeting.
He said permanent cost reductions of $307 million must be accomplished. More than $80 million already has been achieved. And another $70 million in reductions is in process. Other initiatives to bring down costs, he said, include market-based adjustments to wages, benefits and work rules, coupled with product changes and a series of management initiatives to improve efficiency and effectiveness. All together, he said, these measures can yield a cost structure that supports consistent profitability.
“Long term profitability is the only thing that ensures a secure future for employees,” Ayer said.
In response to a question about high fuel prices, Ayer said Alaska is working hard to reduce fuel consumption. Newer, more fuel-efficient aircraft are helping.
Another effective fuel-saving strategy is, “tankering.” This involves balancing whether it is more cost-effective for an aircraft to carry extra fuel on certain flights in order to avoid refueling at stations with particularly high prices. Or, whether it is better to carry only enough fuel to safely complete a flight. “It costs fuel to carry fuel,” Ayer noted.
Other fuel saving measures involve the fuel purchasing strategy called “hedging.” Hedging enables Alaska to level out some of the higher cost by buying fuel for delivery at a future date at a known price. Ayer said about 40 percent of this year’s fuel is hedged.
Notable:
Four of 10 shareholder proposals passed. Most of the 10 proposals were discussed by Steve Nieman, a pilot at Horizon Air. The four adopted dealt with voting procedures, including a call for simple majorities when balloting on proposals submitted by either the board of directors or shareholders.
Ayer was re-elected to a three-year term on the board of directors. Re-elected with him on the board-recommended slate were Dennis F. Madsen, president and CEO of Recreational Equipment Inc, Seattle; R. Marc Langland, president of Northrim Bank, Anchorage; and, John V. Rindlaub, CEO, Pacific Northwest Region, Wells Fargo Bank, Seattle.
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