For Airline, Loss Feels Like Deaths in Family

SEATTLE â€”  The bouquets started arriving in the lobby of Alaska Airlines’ corporate headquarters the day after Flight 261 crashed into the Pacific Ocean, killing all 88 aboard.

The flowers were a recognition that the small, Seattle-based airline, which likes to say that its nearly 10,000 employees are an extended family, suffered a terrible loss Monday.

Seven Alaska and Horizon Air employees, as well as 25 family members and friends, had flown standby from Puerto Vallarta, after taking advantage of employee-discounted plane tickets to spend a long weekend at the Mexican resort. During the slower times of the year, it is not uncommon for a flight to have a large number of airline employees filling otherwise empty seats, company officials said.

There was Sarah Pearson, a Seattle-based flight attendant. She was traveling with her husband, Rodney, daughter Rachel and their infant. On the same flight, Ileana Ost, a customer service agent based in San Francisco, was sitting with her husband, Bob, and their baby. Portland, Ore.-based flight attendant James J. Ryan was traveling with his parents and brother.

“I can tell you that the shock has not worn off,� airline President Bill Ayer said Tuesday. “This is without a doubt the saddest and most tragic day in the history of this company. We all have lost family here.�

In a message issued to all employees Tuesday, a shaken John Kelly, Alaska’s chairman and chief executive officer, said, “Words fail me. Emotions flood. It still seems unbelievable.

“With our excellent safety record, we haven’t had to deal with an accident such as this in over a quarter of a century, so this is new to the vast majority of us. But we are forced to deal with this difficult reality.�

The airline’s last fatal accident occurred in 1976, when one person died after a Boeing 727 overran a runway in Ketchikan, Alaska. In 1971, 111 people died when an Alaska Airlines 727 smashed into a mountain on approach to Juneau, Alaska.

On Monday, Kelly dispatched the company’s Care Team to the families of the passengers to offer various kinds of assistance, from arranging hotel accommodations to finding baby-sitters.

That kind of response is a hallmark of the company, employees say. The carrier, which began service in 1932 on just one route between Anchorage and Bristol Bay, Alaska, has never forgotten its small-town roots, though it eventually moved its headquarters to Seattle and acquired Horizon Air, a local carrier, in 1985.

Even though Alaska is now the 10th largest U.S. airline, flying 2% of all U.S. passenger traffic, employees say management hasn’t lost its people touch.

“We are like a really close family,� said one employee.

The airline also has consistently provided outstanding service to customers, according to independent surveys. In November, it was voted best major U.S. airline by readers of Conde Nast Traveler magazine for the 10th straight year.

Alaska “has been doing a good job and profitably growing,� said Raymond F. Neidl, an analyst at ING Barings. “They’ve got a niche that’s hard for the majors to match.�

Alaska so dominates some of the West Coast’s north-south routes that it has been able to prod rival carriers to enter alliances to feed traffic and share in its frequent-flier programs, Neidl said.

Although the company has established a firm grip on premium business traffic by offering amenities such as fine wines, it has maintained one of the lowest costs per available seat mile in the industry, along with competitors such as Southwest and Delta.

Part of the reason is its emphasis on automation in ticket sales. Alaska was the first carrier to let customers book and pay for tickets on the Internet. And its airport ticketing kiosks have been streamlined to allow passengers to get tickets with fewer keystrokes.

The focus on technology has been a signature of the company for years. In the 1980s, it was one of the first to adopt heads-up cockpit displays that assist pilots landing in fog.

Over the last decade, Alaska’s financial performance has been hit by industrywide troubles but has rebounded well. Since enduring painful cost-cutting in 1993 and 1994 so it could stave off Southwest, Shuttle by United, Reno Air and others in an industry slowdown, the company has posted increasing profits.

It earned $3.53 per share in 1997 and $5.19 per share in 1998.

Wall Street on Tuesday reacted to the crash by knocking down Alaska’s shares to a new 52-week low of $29.50 before allowing them to close at $31.75, still down 13 cents for the day.

The carrier has faced some other turbulence.

A federal grand jury is investigating Alaska’s Oakland maintenance facility, although company officials say they have the best and safest maintenance organization in the industry.

The firm faced four tough contract negotiations last year that threatened to divide employee loyalties and forced the carrier to cancel some flights.

Management finally settled the labor disputes, which included separate contracts with maintenance workers, flight attendants, clerical and ticket workers, and baggage handlers and ramp employees.

“What we went through with labor negotiations is not at all unusual for this industry,� Ayer said. “We felt that we did a miraculous job of ratifying four contracts with good pay increases. They were win-win agreements.�

The tragedy of Flight 261 should not change Alaska’s plans for growth, Ayer said.

“We’re very bullish on the future,� he said. “We’ve got plans to grow the company faster than we’ve been growing the past couple of years. I don’t think this changes a thing.�