October 24, 2013
Good morning!
This morning we released financial results for the third quarter. To cut to the bottom line, we earned a profit of $157 million, making this the best quarter in our 81-year history.
That is quite an accomplishment, and I want to thank you for keeping us safe, working together, keeping us on time, delivering our J.D. Power-caliber customer service, and for leading and innovating. It is incredibly gratifying to work with such talented and dedicated people!
As you know, we had much more competition in Anchorage this summer than in previous years, but we were prepared. Because of our recent growth and route diversification, other geographic regions performed well while Anchorage markets were under pressure. Hawaii, in particular, had a very strong third quarter thanks to recent schedule adjustments in our California-Hawaii markets.
I also want to thank those of you who participated in our recent employee meetings in Seattle, Los Angeles and Anchorage. The meetings were very well attended (1,500 of you showed up in Seattle!), and we had a good chance to talk about our performance, our future and your concerns.
One area that many of you asked about was our relationship with Delta. As you probably know, they’ve added flying in some of our key markets, including between Seattle and San Francisco, Los Angeles, Las Vegas and Anchorage. Some of you have asked why Delta is doing this and how we’re going to respond. Alliances are often complicated relationships. Sometimes we cooperate in these relationships and sometimes we compete. For example, it makes sense for us to work with Delta to connect passengers who start in our network and want to connect to their growing number of international flights. In other cases, however, we compete. Much of Delta’s recent growth is in some of our core West Coast markets. In these markets, we plan to aggressively, completely and vigorously defend what we’ve all built together. You may have seen our recent announcements to add frequencies and provide double miles (with the extra miles counting toward MVP/Gold/75k status) in these markets.
There were also several questions during the employee meetings about the status of our negotiations with our flight attendants. As we mentioned at the meetings, our goal in this contract, as it is in every contract, is to recognize the hard work and dedication of our people while ensuring the company’s continued ability to compete and prosper in an increasingly competitive marketplace. The tone at the bargaining table has been positive and I am optimistic that we’re making good progress toward a comprehensive agreement.
I was chatting with a business associate recently and he said something that really resonated with me. It was this: “The best defense is … performance.” This struck me as really good advice for Alaska Air Group at this moment.
Alaska and Horizon are relatively small airlines in the grand scheme of things. Combined, we represent 3.5% of the U.S. airline industry. We could debate about what makes an airline successful, but I think that, at the core, it is acting on things that are in our control – even for a small 3.5% player. This includes putting safety first above all else and performing extremely well when it comes to on-time performance, delivering bags to the carousel on time, and providing our customers with the absolute best service in the industry from employees who are head-and-shoulders above the rest. It also includes having low fares, customer-friendly policies, low costs and excellent returns for our owners. Our Five Focus areas are an excellent road map for us all. We can control our performance in each of these areas and, as we do, we will control our destiny.
The leadership of this company is committed to doing what it takes to win. We want Alaska to thrive as an independent, Northwest-based company. We believe that’s best for you, our employees — as well as for our customers, our communities and our owners.
At our employee meetings we introduced a new 737-900ER with our “Employee-Powered” livery. This aircraft carries the signatures of the Alaska Airlines family and is dedicated to all of you. It's a constant reminder to me of the real power of people — our people — working together.
Thank you for everything you’re doing, and I look forward to seeing you out and about this fall.
Brad