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    Alaska Airlines - Summary

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    Alaska Airlines was founded in 1932 and acquired Virgin America in 2016. It has over 15,000 employees and a focus on superior customer service. The document compares financial and operating data for Alaska Airlines and Virgin America and describes how Alaska Airlines worked to improve customer service by empowering frontline employees and adopting practices from Virgin America's culture after the acquisition.

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    Alaska Airlines - Summary

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    hr
    53 views7 pages
    Alaska Airlines was founded in 1932 and acquired Virgin America in 2016. It has over 15,000 employees and a focus on superior customer service. The document compares financial and operating data for Alaska Airlines and Virgin America and describes how Alaska Airlines worked to improve customer service by empowering frontline employees and adopting practices from Virgin America's culture after the acquisition.

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    Alaska Airlines was founded in 1932 and acquired Virgin America in 2016. It has over 15,000 employees and a focus on superior customer service. The document compares financial and operating data for Alaska Airlines and Virgin America and describes how Alaska Airlines worked to improve customer service by empowering frontline employees and adopting practices from Virgin America's culture after the acquisition.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    53 views7 pages

    Alaska Airlines - Summary

    Uploaded by

    hr
    Alaska Airlines was founded in 1932 and acquired Virgin America in 2016. It has over 15,000 employees and a focus on superior customer service. The document compares financial and operating data for Alaska Airlines and Virgin America and describes how Alaska Airlines worked to improve customer service by empowering frontline employees and adopting practices from Virgin America's culture after the acquisition.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 7

    Alaska Airlines

    Founded:
    CEO:
    President & COO:
    Acquisation:
    Acquisation:
    Employees:
    Key feature:
    Competitor
    Culture:

    New Values:
    New Values:

    Virgin America:
    Conceived:
    Officially started:
    Key Feature:

    Culture:

    IPO
    President:
    Alaska Airlines: Empowering Frontline Workers to Make It Right

    Summary:

    1932
    Bradley Tilden
    Ben Minicucci
    2016
    $4 Billion - Virgin America Airline, ($57 per share - i.e 46% premium = $2.6Million) ($4.2 billion - including debt & aircraft lease
    3,000 (Virgin America ), 15,000 (Alaska)
    Superior Customer service
    Delta Airlines
    "whatever it takes" - to please customers - failed
    "Service Framework" - for customer statisfaction - framework 4 points - "safety, courtesy, show & efficency"
    Revised Framework (after acquisation) - Own Safety, do the right thing, be kindhearted, deliver performance & be
    remarkable.
    After Acquisation: included Virgin's ideas & created - "Creating an airline people love"

    2004
    2007
    First in US to offer WiFi, purple & pink mood light/ advanced in-flight entertainment system
    Family Culture.
    "Create WOW" - put customers first- ensure good experience.
    "Elevate People" - for managers & peers - create opportunity for employees - team building - respectful
    environment.
    "Be Virgin" - reinforce fresh, cheeky experience.
    2014
    Hunt - promoted from CFO - after acquisation

    History:Alaska
    1990 - competition rise - encouraged employees to do "whatever it takes" to please customers - this failed - due to lack of trai
    2000 - plane crash - reputation down - started to focus more on safety.
    2001 - 9/11 terror attack - planes demand fell - price of raw materials rise - verge of bankrupcy - $43.4 Mil Loss.
    2004 - cut 2100 jobs - by 2005 started making profit $55 Million -still struggled with operational issues.
    2008 - created "departure & arrival" playbook - detailed rules for all - more disciplined.

    Had open communications with upper management - frontline workers showing frustration - no proper training on custmer se
    2014 - 8person task force created - to better customer service - called Beyond Service - 1pg document - to find "Secret Sauce"
    Hire Disney Institute - for this work
    create "Service Framework"
    Service Framework - create by and for workers
    1. Create personal connection.
    Great Customer service - "safety, courtesy, show & efficency"
    - considerable degree of freedom to employees - to bend rules - make exceptions - but should follow the 4 points of Framewo
    - Superior/ manager encouraged to followup - but not reprimand - treat them with empathy

    After Acquisation - Alaska - got access to San Francisco, Los Angeles & new york, california
    Virgin employees - didn't like Alaska - saw their culture dominating - only white employees

    Exhibit 6 Comparison of Alaska Airlines’ and Virgin America’s Operations, 2015

    Annual passengers
    Aircraft

    Daily departures
    Destinations

    Exhibit 4 Alaska Airlines’ Financials, 2008–2017 (in millions of U.S. dollars)


    Year:
    Total Revenue
    Growth Over Prior Year
    Gross Profit
    Margin
    EBITDA
    Margin
    EBIT
    Margin
    Earnings from Cont. Operations
    Margin
    Net Income
    Margin (3.7%)
    Diluted EPS (0.94)
    Growth Over Prior Year NM

    Exhibit 9 Virgin America’s Financials, 2009–2016 (in millions of U.S. dollars)


    Year:
    Total Revenue
    Growth Over Prior Year
    Gross Profit
    Margin
    EBITDA
    Margin
    EBIT
    Margin
    Earnings from Cont. Operations
    Margin
    Net Income
    Margin
    Diluted EPS
    Growth Over Prior Year
    g debt & aircraft lease)

    ed - due to lack of training .

    training on custmer service


    to find "Secret Sauce" behind exceptional frontline workers - created team of 25 best frontline workers

    Exhibit -1
    e 4 points of Framework.
    Alaska  Virgin 
     Airlines America       

    32 million 7 million
    152 Boeing 63 Airbus
    52 Q400
    15 regional jets

    1,000 200
    112 24

    2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
    3,663 3,400 3,832 4,318 4,657 4,964 5,368 5,598 5,931 7,495
    4.5% (7.2%) 12.7% 12.7% 7.9% 6.6% 8.1% 4.3% 5.9% 33.7%
    486.5 788.1 1,074 1,232 1,308 1,424 1,464 1,929 2,117 2,454
    13.3% 23.2% 28.0% 28.5% 28.1% 28.7% 27.3% 34.5% 35.7% 32.7%
    116.5 442.4 719.0 765.0 834.0 908.0 1203.0 1650.0 1816.0 1868.0
    3.2% 13.0% 18.8% 17.7% 17.9% 18.3% 22.4% 29.5% 30.6% 24.9%
    (88.1) 223.2 489.0 518.0 570.0 638.0 909.0 1330.0 1453.0 1511.0
    (2.4%) 6.6% 12.8% 12.0% 12.2% 12.9% 16.9% 23.8% 24.5% 20.2%
    (135.9) 121.6 251.0 245.0 316.0 508.0 605.0 848.0 814.0 775.0
    (3.7%) 3.6% 6.6% 5.7% 6.8% 10.2% 11.3% 15.1% 13.7% 10.3%
    (135.9) 121.6 251.0 245.0 316.0 508.0 605.0 848.0 814.0 775.0
    3.6% 6.6% 5.7% 6.8% 10.2% 11.3% 15.1% 13.7% 10.3%
    0.84 1.71 1.67 2.2 3.58 4.42 6.56 6.54 6.22
    NM 103% (2.3%) 32.1% 62.7% 23.5% 48.4% (0.3%) (12.8%)

    2008 2009 2010 2011 2012 2013 2014 2015 2016


    547.6 724.0 1,037 1,333 1,425 1,490 1,530 1,626
    NA 32.2% 43.2% 28.5% 6.9% 4.6% 2.7% 7.7%
    75.4 105.1 171.4 213.2 334.6 355.9 471.4 560.3
    13.8% 14.5% 16.5% 16.0% 23.5% 23.9% 30.8% 34.4%
    (22.8) (1.9) (19.6) (22.9) 86.8 106.6 190.3 248.5
    -4.20% (0.3%) (1.9%) (1.7%) 6.1% 7.2% 12.4% 15.3%
    (39.0) (12.4) (27.4) (31.7) 75.9 96.4 177.2 220.4
    (7.1%) (1.7%) (2.6%) (2.4%) 5.3% 6.5% 11.6% 13.6%
    (80.8) (68.7) (100.4) (145.4) 10.1 60.1 340.5 298.3
    (14.8%) (9.5%) (9.7%) (10.9%) 0.7% 4.0% 22.3% 18.3%
    (80.8) (68.7) (100.4) (145.4) 10.1 60.1 340.5 298.3
    (14.8%) (9.5%) (9.7%) (10.9%) 0.7% 4.0% 22.3% 18.3%
    NA NA NA (207.2) 3.68 7.13 7.66 6.67
    NA NA NA NA NM 93.8% 7.4% 57.5%

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