Tuesday, November 22, 2011

The unacknowledged reality behind Alaska Airline's success

Seattle-based Alaska Air Group appears to be a well-run airline, if its recently reported $131 million in profits for the 3rd quarter, a new record, is any indication--although the Wall Street Journal did reveal that as much as 40 percent of this came from “fuel hedging," savings from a previous fuel supply contract rather than actual revenue. Nevertheless, Alaska is doing quite well—so well that they distributed $72 million in bonuses to its employees earlier this year, although obviously the biggest chunks went to executives. $44 million was distributed to 6,000 Alaska and Horizon Air employees in the Puget Sound area, an average of over $7,000 per employee (kind of amusing in regard to Horizon, since watching their rampers is like seeing a half-dozen Gullivers trying to stay out of each other’s way around those Lilliputian planes). This, according to a story I read, is in addition to $1,000 to $1,200 a month in bonus pay each employee “earned” for meeting on-time (90 percent) and customer satisfaction goals. CEO Bill Ayer proclaimed that "The outstanding efforts of our employees are at the heart of our success."Indeed, according to J.D. Power, Alaska ranked number one for the fourth consecutive year in customer satisfaction among U.S.-based airlines.

Now I have to prick this balloon. Note that I put the word “earned” in quotations. Alaska Airlines does not include its ramp (and presumably its airplane interior cleaning) personnel as company employees worthy of receiving bonuses. Or at least they must not because I don’t know anyone who works for Menzies Aviation who received that 9 percent of total yearly salary bonus. While Alaska customer service, flyboys, diva mechanics, glorified waitresses and the people responsible for the “controlled” chaos in Operations represent the facade of the company, the grunt work behind the scenes largely responsible for “on-time” performance and thus “customer satisfaction” goes largely unnoticed (except when something goes wrong) and even deliberately slighted by the airline, doubtless to assuage the tender feelings of union employees. Because of lingering animosity toward Menzies, due to the fact that it was this contractor that was chosen to replace fired union rampers in 2005, these employees are the “Invisible Man” in Alaska’s success—not to mention their labor is the primary reason those “real” Alaska employees are able to pocket thousands in bonuses and bonus pay. The contract Menzies has with Alaska apparently makes no provision for bonuses to be paid to Menzies employees.

Of course, Menzies has been the target of abuse since 2005, especially by the media. I remember exchanging several testy emails with the Seattle Times aviation reporter a few years ago, so I know that “fairness” and “objectivity” has nothing to do with its reporting. In 2005, Alaska employees were doing what they could to undermine Menzies employees, behind-the-scenes providing the media with photos and stories about their incompetence. At the time, Menzies was indeed literally hiring any bodies to quickly fill the ranks; one Alaska employee told me that many of these new hires were “thugs,” and I did read a story about gang graffiti that was found inside at least one baggage hold. But times change, and when I look at this nasty winter weather already upon us, one realizes that it takes people dedicated to their jobs to perform in such conditions. And there were a micron of people who pointed out that much of the reporting back then had the element of hypocrisy; back in 2006, a “curmudgeon” and “tech superfreak” named David Orriss wrote the following on his blog, the veracity of one or two of the statements subject to independent confirmation:

“The local (highly-union-biased) press has been up in arms about Menzies even if one of the workers so much as sneezes. Note that Menzies is a non-union shop. I personally think that the local media is participating – to some degree – in a smear campaign of non-union labor. For example, the local news mentioned that for 9 months out of 2004 to 2005 there were a HUGE increase in the number of safety problems at Alaska air. Up from 13 in 2004 to over 50 in 2005. What the news FAILED to mention was that during that 9 month period the UNION WORKERS were the ones committing the violations. Actually, they were kicking out panels and vandalizing the planes because they knew they were going to lose their contract. Talk about jackboot thugs…”

There was, of course, the famous incident where there was damage to an airplane, apparently caused by being struck by Menzies-operated equipment, and the plane was forced into an emergency landing when the dent became a hole in the fuselage. The person or persons involved in the accident were clearly guilty of gross negligence in not reporting the dent, but no one was hurt, and the news media put the expected pro-union spin on the story. More recently, the incident where one airplane’s wing tip struck another airplane’s horizontal stabilizer during pushback made headlines, although KIRO News at least admitted that Menzies had managed to keep itself “out of the news” since the 2005 incident. Although again negligence played a part, Alaska also admitted that it was an error to place two of the long Boeing 737 models in a tight spot where the planes are literally at right angles to each other.

But beyond these "black marks," there is that unfortunate little fact that Alaska has continued to receive high marks in on-time performance and customer satisfaction since Menzies has been on the job, and this contractor deserves a great deal more recognition than it is receiving from the airline. It wasn’t that long ago that Alaska’s reputation was in tatters. Memory may fade for some, but the 2000 crash of Alaska Flight 261, killing all 88 passengers in the waters off the coast of California, was real, and it was before Menzies. An investigation revealed that the jackscrew controlling the horizontal stabilizer had not been properly greased, causing stripping which allowed the nut that secured it to detach itself. A “loud noise” heard in the back of the plane apparently was caused when the horizontal stabilizer broke through the vertical stabilizer, causing the plane to lose pitch control and literally take a nose-dive into the Pacific Ocean; there is a YouTube video containing audio of pilots of other planes in the area observing in horror this crash. It was also reported that an Alaska dispatcher had attempted to talk the pilot out of diverting to the closer Los Angeles International Airport for an emergency landing; apparently it was more important to continue to its scheduled stopover in San Francisco, so as not to disrupt scheduling “flow.” A state investigation in California over allegations of falsified maintenance records, however, did not end in charges being filed against the airline.

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