Alaska Airlines - Introduction and Company Overview Essay examples

5452 Words Apr 20th, 2012 22 Pages
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August 12, 2011

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Introduction and company overview
Alaska Airlines was founded in Anchorage in 1932 and expanded to 22 aircraft operating within the state by 1934. In the late 70s, the airline began expansion to the lower Western states and by 1987 had acquired Horizon Air and Jet America bolstering its North South route structure and complementing the seasonal nature of travel to Alaska

Today Alaska Air Group, Inc. (Alaska Air) is the holding company for Alaska Airlines, Inc. and Horizon Air Industries Inc. The company offers passenger air service to more than 23 million passengers to more than 90 destinations. It also provides freight and mail services in the state of Alaska and on the West Coast.
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Other large issues are:

• Weather - Weather is variable and unpredictable. Extreme heat, cold, fog and snow can shut down airports and cancel flights, which costs airline money.

• Fuel Cost - According to the Air Transportation Association (ATA), fuel is an airline's second largest expense. Fuel makes up a significant portion of an airline's total costs, although efficiency among different carriers can vary widely. Short haul airlines typically get lower fuel efficiency because take-offs and landings consume high amounts of jet fuel. Fuel prices tend to fluctuate on a monthly basis, so paying close attention to these costs is crucial. • Labor - According to the ATA, labor is the an airline's No.1 cost; airlines must pay pilots, flight attendants, baggage handlers, dispatchers, customer service and others. [pic]

Analysis

Threat of New Entrants: In the airline industry the barrier to entry is higher because new carriers find it difficult to obtain gates and landing slots at the major hubs. In addition the more new airlines that enter the market, the more saturated it becomes for everyone. Brand name recognition and frequent fliers point also play a role in the airline industry. An airline with a strong brand name and incentives can often lure a customer even if its prices are higher. The threat of entry at the current time for the airline industry is pretty high. New value carriers such as Virgin Air allow customers to save

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