Alaska Airlines – The OM Blog by Heizer, Render, & Munson

Video Tip: Using Our Five Alaska Airlines Video Case Studies

Barry and Jay filming in an Alaska Airlines cockpit — Barry and Jay filming the videos in an Alaska Airlines cockpit

The Wall Street Journal‘s annual scorecard of U.S. airline performance (Jan. 12, 2017), which ranks major carriers on 7 different measures important to travelers, has just been released. We note that the company we prominently feature in our latest edition, Alaska Airlines, topped the scorecard as the best overall performer for the 4th-straight year, edging out Delta. Alaska also scored 1st in: on-time arrivals, least extreme delays, least 2-hour tarmac delays, and in least number of complaints. It was 3rd in cancelled flights and involuntary bumping, and 4th in mishandled bags.

The Seattle-based airline says its poor baggage showing in the 2016 scorecard drove a deep study of which flights were causing the most mishandled bags. Alaska began bar-code scanning of every bag going on and off planes. It also figured out which cities, which shifts and which flights had the most problems and found delays with bags transferring from other airlines. So instead of waiting for bags to come through an airport sorting system, Alaska now takes carts to other airlines in Seattle and waits for connecting bags at the tails of arriving airplanes.

Here are the 5 short videos we provide free to adopters:

Quality Counts at Alaska Airlines (Ch.6): “If it is not measured, it is not managed,” says one Alaska exec in this case that provides explicit performance metrics.

Alaska Airlines: 20-Minute Baggage Process–Guaranteed! (Ch.7): Students can flowchart the process a bag follows from kiosk to destination carousel after watching this video.

The People Focus: Human Resources at Alaska Airlines (Ch.10): The employee “Empowerment Toolkit” reminds us of Ritz Carlton’s famous customer service philosophy.

Lean Operations at Alaska Airlines (Ch.16): The company’s aggressive implementation of Lean includes its 6-sigma Green Belt training, Kaizen events, Gemba Walks, and 5S applications.

Scheduling Challenges at Alaska Airlines (Module B and Ch.15): Good scheduling of crews and planes means optimization–the perfect fit for our coverage of LP and scheduling.

OM is indeed a centerpiece of Alaska’s success and we think your students will enjoy these videos.

Video Tip: Our New Series of Five Alaska Airlines Videos

Over the past 21 years (7 editions of our OM texts), we have created a theme of sorts by focusing on an organization that we thought would be of interest to students. We did this by creating a series of customized videos and case studies featuring such firms as Hard Rock Café, Arnold Palmer Hospital, Frito-Lay, Darden (Red Lobster/Olive Garden), and the Orlando Magic. The videos are tailored directly to our book and terminology, so each fits perfectly in a specific chapter, with a goal of reinforcing content with exciting and well-known examples.

The new editions of OM 12/e and Principles of OM 10/e continue this tradition with a service firm that is consistently the highest ranked in the U.S. in its field–Alaska Airlines. Why did we select an airline? Over the years we discovered that faculty and students really enjoyed learning about OM in fields that they understand, especially service organizations. Although filming at Frito-Lay was one of my favorites ever, I think the 5 new videos and case studies on Alaska may become your favorites. Here they are:

Quality Counts at Alaska Airlines (Ch.6): “If it is not measured, it is not managed,” says one Alaska exec in this case that provides explicit performance metrics.

Alaska Airlines: 20-Minute Baggage Process–Guaranteed! (Ch.7): Students can flowchart the process a bag follows from kiosk to destination carousel after watching this video.

The People Focus: Human Resources at Alaska Airlines (Ch.10): The employee “Empowerment Toolkit” reminds me of Ritz Carlton’s famous customer service philosophy.

Lean Operations at Alaska Airlines (Ch.16): The company’s aggressive implementation of Lean includes its 6-sigma Green Belt training in-house, Kaizen events, Gemba Walks, and 5S applications.

Scheduling Challenges at Alaska Airlines (Module B): Good scheduling of crews and planes means optimization–the perfect fit for our coverage of LP. This video can also be shown with Ch. 15, Short Term Scheduling.

We think your students will appreciate the smooth integration of these great topics into your lectures. All videos are provided free to adopters and are also embedded in MyOMLab. The see a copy of the new edition, just click on the Order Desk Copy button on the top of the blog.

OM in the News: Speeding Up the Airline Boarding Process

Jay and I just returned from a visit to Alaska Airlines headquarters, where we studied the intricacies of operations management at the top-rated U.S. carrier. One of the many issues we discussed was the speed of boarding passengers onto their flights.

In the past 3 decades, the airplane boarding process has become an increasingly important industry-wide issue for airlines and passengers. Prior to 1970, the average boarding speed of passengers nationwide was 20 passengers per minute. By 1998, this rate had decreased to 9 per minute. The increased costs of checking luggage will continue to play an important role in the time to board, as passengers are going to respond to increasing fees by carrying more bags onto the plane. As a result, the boarding speed may continue to decrease.

When using an average boarding strategy, the difference in boarding times when passengers have 2 carry-on bags compared to zero is almost 60%. Long boarding times impact costs. The total cost of airline delays in 2007 was estimated to be $29 billion in the U.S. alone, with the cost to airlines ($8 billion), the cost to passengers ($17 billion), and the cost from lost demand ($4 billion). This indicates the possibility for large savings for the airlines and passengers with more efficient boarding methods.

So a recent article by Clarkson University researchers to develop a strategy for boarding flights caught our eyes. The new method, published in the Journal of Air Transport Management (Jan., 2014), assigns airline passengers to a specific seat based on the number of bags they carry, causing luggage to be evenly distributed through the plane. Each row of seats would tend to have a passenger with 2 bags, a passenger with 1 bag and a passenger with no bags. “The new method would save at least several seconds in boarding time and prevent any one area of the plane from becoming overloaded with bags,” says author Prof. John Milne. “Airlines could provide a smoother boarding experience for passengers by utilizing the research.”

Classroom discussion questions:

1. Why is boarding an OM issue and what control do managers have over the process?

2. What other boarding procedures are in place across the industry?

OM in the News: New Looks at Loading and Boarding Planes

Loading an airplane quickly and efficiently isn’t an easy task. “It should be, and could be, but the humans involved can’t seem to get with the program,” writes Wired Magazine (Aug. 28, 2013). Better loading means more time in the air – which is where airlines make their money. The boarding process is far from standard – there are almost as many boarding procedures as there are airlines. This problem has long been pondered by operations managers, without a definitive answer. But there have been a few promising experiments.

The most unusual and deceptively simple idea is opening the door at the rear of the plane in addition to the door at the front. Alaska Airlines is trying this. The idea isn’t entirely new–many airlines open the front and rear doors at those airports where there is no jetway, only a staircase leading to the tarmac. Alaska has a new tool to help facilitate using both doors–a solar-powered ramp. Mounted on wheels, the ramp can be driven to the backdoor of the airplane, and passengers make two switch-back turns down the ramp to the ground, providing an alternative to stairs for easy suitcase rolling and wheelchair access. Using the aft door to unload passengers can reduce the turnaround time by 10 minutes.

One of the big reasons boarding has slowed to a crawl is people are carrying more bags aboard to avoid baggage fees. So American Airlines is experimenting with letting those who checked their bag board first. Ideally, these passengers will simply walk to their row and sit down. The airline says that overall it has shaved a few minutes off the boarding process.

Although airlines commonly board by sections, it’s generally a free-for-all with regard to where in that section you are. United uses the “outside-in” method of seating window passengers first, then middle, then aisle seats. The airline has been organizing passengers in better defined lines at the gate for each group, with the hope is there will be less of a bottleneck.

Discussion questions:

1. Why is boarding an important OM issue?

2. What else can airlines do to speed the process?

OM in the News: Alaska Airlines’ Operations Success

Alaska Airlines is puny compared to the major carriers, says The New York Times (March 3, 2013): it has 124 planes, while United has more than 700 and four times as many passengers. But because of the state’s topography and extreme weather, it was the first to develop satellite guidance, a navigation technique that has transformed landing at Alaska’s tricky airports. The technique is now at the heart of the FAA’s plan to modernize the nation’s air traffic system. The technology works much as GPS does in cars: it allows pilots to chart a precise course in the air and safely navigate hazardous terrain, weaving through valleys and around mountains with perfect accuracy right up to the edge of the runway. It opened a new landing approach for Juneau in 1996, allowing flights to come through the thickest fog. Jet wingtips practically graze the trees on the final stretch to the airport.

Largely because of that technology, flying in Alaska is now remarkably reliable — even in the dead of winter, when it is snowing, when there are just two hours of daylight, when runways are icy, when winds blow at more than 50 mph, and pilots can barely see out the windshield. Alaska Airlines, in fact, had the industry’s best on-time performance for the third consecutive year in 2012, with 87% of flights landing on time. And unlike carriers that have faced bankruptcy or acquisition, Alaska has turned a profit for 33 of the last 39 years.

The airline can keep costs down in part because it measures obsessively. It has established 50,000 points of data to improve its on-time performance, from the time bags are loaded and passengers board to when the pilot pushes back from the gate. Alaska also figured out that if it could shave just a minute of taxi time from each flight, it could save 500 minutes, or over 8 hours, a day — the equivalent of flying an extra plane daily, said COO Ben Minicucci. If such small efforts allowed the carrier to free up a plane, it could generate $25- $30 million in revenue a year.

Discussion questions:

1. How has technology helped drive Alaska Airlines’ success?

2. Why is productivity an important OM factor at Alaska?

OM in the News: How Alaska and Delta Airlines Reengineered Quality Control

If you fly a lot, you will want to read this article in The Wall Street Journal (Jan.5, 2012) and use it in class when you cover the topic of Managing Quality (Ch.6). It begins by dealing with American Airlines, which ranked dead last (again) in customer service in the Journal’s annual analysis of major air carriers. The score card ranks airlines on on-time arrivals, delays, cancelled flights, missing bags, bumped passengers , and complaints filed with the DOT.

Alaska Airlines, which overhauled its operations in 2007 after several dismal years of reliability came in 1st in 4 of the 7 key operational areas. What did it do to change? For one thing, Alaska has set 50 internal quality checkpoint standards on a timeline for each departure. Flight attendants have to be on board 45 min. before departure; agents must board the 1st passenger 40 min. before departure; 90% of passengers need to be boarded 10 min. before departure; the cargo door must be opened 3 min. after arrival; the 1st bag has to be on the conveyor belt within 15 min. of arrival; and so on with 45 other measures for which data are collected on every flight.

Similarly, Delta engineered a major operational turnaround last year after coming in 2nd worst in punctuality and baggage handling and worst in cancelled flights and customer complaints. It has opened maintenance operations in 9 new cities to keep more its fleet ready to fly. It has also invested in a new baggage system and new technology in its operations control center. “There are a lot of side benefits of running a good, clean operation”, says Delta’s VP-Operations.

Discussion questions:

1. Why do some airlines, like Jet Blue, have a terrible problems with delayed flights, while others, like Alaska, do not?

2. What quality measures would students select to monitor besides the ones mentioned here?

OM in the News: If You Don’t Get Your Bag in 20 Minutes, You Get $20!

We have seen it in the ERs…”we guarantee you will be seen in 30 min. or….”. But did we ever think we would see it in airports as we wait for our checked bags? After decades of mishandled and delayed suitcases arriving to the carousel (which costs the airlines $2.5 billion a year), the quality of service is finally improving dramatically—all because of OM efforts.

The Wall Street Journal (Dec.2,2010) reports that Alaska Airlines has just implemented a 20 min. guarantee. If a customer’s bag does not arrive at the claim area within 20 min. of arrival, fliers get a $20 voucher or 2,000 frequent-flier miles. Alaska has improved its misdirected baggage claims by 52% in the past 2 years. For all airlines the lost luggage figures are down by a whopping 38%. “If you are going to charge for bags, you better be really reliable”, says US Airways’ COO.

How did OM impact the change? New technology and revised processes (both in Ch.7) are the keys. Airlines have ramped up use of bar-code scanners to track bags along their journey–something cargo shippers and supermarkets have been doing for years. Delta invested $100 million in its Atlanta operations alone. It gutted the entire infrastructure under Terminal B to make room for an automated baggage system. Belt time is 7-10 min., vs. the old system of driving bags on carts, which took 15-30 min. Payback comes from less mishandled bags, which average $100 each.

Alaska Airlines has changed its processes and a new strict adherence to timeliness. Within 10 min. of arrival, all bags must be offloaded. And instead of measuring when the 1st bag hit the carousel, Alaska tracks when the last bag is delivered, posting scorecards for employees. “It is measuring and setting goals that are very specific”, says the airline.

Discussion questions:

1. Why and how did airlines improve so quickly?

2. What technology drives the changes?

3. What do students think of the 20 min. guarantee? Will other carriers be forced to match it?