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Monday, March 4, 2013 - Page updated at 06:30 a.m.
Alaska Airlines powers through tough winter conditions, turbulent industry
By JAD MOUAWAD
The New York Times
Flying over Alaska in the wintertime is a spectacular experience. At 35,000 feet, the state’s rugged beauty unfolds, a succession of white mountain peaks against steel-blue skies, icy lakes and frozen rivers that snake as far as the eye can see. It’s an awesome sight, wild and pristine, that glows in a thousand hues of red, orange and pink when the sun sets against the horizon.
But then, you have to land.
Juneau’s airport is surrounded by mountains, the approach often buffeted by treacherous wind shear. Sitka’s one small runway is on a narrow strip of land surrounded by water. And in Kodiak, the landing strip ends abruptly at a mountainside. The airport approach is so tricky that first officers are not allowed to land there; only captains are trusted to do so.
Doug Wahto knows these airports well. He grew up in Juneau, worked as a commercial fisherman and builder, and started flying with Alaska Airlines in 1970. As a pilot, he honed the art of reading wind conditions by looking at how snow blew over mountain ridges.
Wahto retired six years ago but not before seeing the transformation of flying in Alaska and of the airline where he spent his career. Alaska Airlines is puny compared to the major carriers: It has 124 planes, while United Airlines 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 Federal Aviation Administration’s plan to modernize the nation’s air traffic system, a project that is expected to cost tens of billions of dollars over the coming decades.
“It doesn’t take a rocket scientist,” Wahto says, “or a crusty old dog like me to fly these approaches anymore.”
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 made slippery by ice or sleet, when winds blow at more than 50 mph and pilots can barely see out the windshield. When, in other words, no one in his right mind would want to land a Boeing 737 with 140 passengers on a 6,000-foot runway.
Alaska Airlines, in fact, had the industry’s best on-time performance for the third consecutive year in 2012, with 87 percent of flights landing on time, according to FlightStats, a data provider.
That reliability means a lot in a state where air travel is often the only option and where Alaska is the only commercial jet carrier with in-state routes. The airline flies to 16 towns accessible only by plane or boat and, in doing so, ferries food and medical supplies, takes thousands of oil workers above the Arctic Circle and operates as the biggest air shipper for the state’s fisheries.
This role as primary in-state transport is still a healthy business, but Alaska Airlines has prospered by expanding its services. From its Seattle base, it now has a bigger presence than other airlines along much of the West Coast. In 2007, it moved into Hawaii; its flights to the state now account for 20 percent of its available seat miles, an industry standard for measuring capacity. That is more than the 17 percent in Alaska itself.
Megamergers, most recently of US Airways and American Airlines, have redrawn the boundaries of domestic carriers, concentrating the business as never before. Alaska Airlines, for its part, has cultivated staunch independence. Unlike carriers that have faced bankruptcy or acquisition, Alaska has turned a profit for 33 of the past 39 years. In 2012, it had a record $316 million in net income, up 29 percent from 2011.
Although it started in a sparsely populated, meteorologically unwelcoming, financially challenging corner of the country, Alaska has built a successful franchise that is the envy of many rivals.
“The weather around here can be unpredictable,” says Clarissa Conley, the FAA manager for Juneau International Airport. “You name it, we’ve got it. And the terrain can make flying here pretty challenging, particularly when visibility is low.”
For years, Juneau was a singularly tough place for planes to land. The airport is sandwiched between 3,000-foot peaks and lies at the end of a 15-mile-long channel that is notorious for gusty and shifting winds. Thick blankets of fog often envelop it.
In the early days of commercial aviation, engineers carved out a chunk of the hills on the west side of the runway so planes could fly in and out. For years, flying through the “cut” was the only approach to the airport, forcing pilots to perform hazardous acrobatics to line up with the runway just before landing.
If the weather was bad, planes couldn’t land, sometimes for days. The delays were so frequent that they threatened the status of Juneau as the state’s capital. The city is not accessible by road, and campaigns sprang up to move the seat of government to Anchorage. In 1971, a Boeing 727 crashed into a mountain as it approached Juneau in heavy fog, killing all 111 people on board. At the time, it was one of the deadliest accidents in domestic commercial aviation. Another plane nearly crashed in 1993 after being caught in a terrible wind draft right after takeoff.
Because of its terrain and vast distances, Alaska has never had much radar coverage. Airports are few and far between, and radar beams are blocked by mountains. But this made it an ideal laboratory to test satellite navigation technology that was being developed in the 1990s, says Hal Andersen, a pilot who was involved in the effort.
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 Gastineau Channel even in the thickest fog. Jet wingtips, coming within 3,000 feet of mountains on either side, practically graze the trees on the final stretch to the airport.
There is another advantage. Before satellite guidance, pilots had to be able to see the runway three miles out in order to land. Now, with more precise navigation, that threshold has been cut to one mile, which greatly increases the chances that a plane can land.
“The cockpit used to be like a room full of rattlesnakes that pilots had to deal with, like so many threats,” says Sean Ellis, a captain who until last year was Alaska Airlines’ chief pilot for the state. “Now, we have a bigger safety net. That’s the benefit of technology.”
The airline’s experiments with satellite navigation in Juneau helped prove the technology more effective than ground-based beacons and radar. The government has since outlined an ambitious program, called NextGen, to expand use of satellite guidance to airports around the country. The FAA promotes this as a revolution in commercial flying, a transition from the analog world of radar to the digital age of satellites. It will probably take decades and cost tens of billions of dollars.
Ultimately, it would make flying safer and more efficient by giving pilots and air traffic controllers a real-time view of traffic, as well as enhanced communications. But the project has moved slowly, in part because airlines have been reluctant to invest in the technology until the FAA musters the resources to update its own equipment.
Satellite navigation is now used at a few airports, including John F. Kennedy International in New York. It is also used in the Washington area, where planes headed for Ronald Reagan National Airport in northern Virginia can glide down gracefully along the curves of the Potomac River and comply with the federal capital’s airspace restrictions.
Alaska Airlines put up a substantial sum, $40 million, to adopt the satellite technology and train pilots to use it. That paid off quickly: The airline estimates it saves $18 million a year by reducing flight cancellations and delays.
The technology doesn’t entirely replace pilot skill, and the airline maintains a rigorous training program, including an Arctic certification that takes six to seven years to complete. Many new hires have already flown bush taxis in Alaska.
“There are guys here who’d rather be at their third approach in Juneau than their third margarita at Puerto Vallarta,” says Wahto, who is now a federal safety official in Juneau.
On an Alaska Airlines flight from Anchorage to Nome — with a stop in Kotzebue, an Inupiat village north of the Arctic Circle — Ellis explained how to maneuver a 120,000-pound passenger jet toward a short, icy runway. The trick, he said, is to land the wheels hard on the tarmac to activate the automatic braking and anti-skidding systems. Landing too smoothly, or gliding above the runway for too long, could make the wheels slide on the ice or snow and deprive the pilot of braking power.
“It’s just like landing on an aircraft carrier,” he said as Flight 153 — a Boeing 737 Combi, a custom aircraft that is half freighter and half passenger plane — touched down with a heavy thump and rumbled down the runway to a quick stop.
The temperature that evening was a brain-numbing minus 16 degrees Fahrenheit, and a thin layer of ice and snow coated the ground.
Pilot skill matters, but even so, a lot of the guesswork has been taken out of flying, says Kenny Williams, an Alaska Airlines pilot who helped devise another system that provides a real-time picture of wind patterns around the Juneau airport.
“The level of artistry has changed radically and taken anxiety out of the cockpit,” he says. “The idea is that you don’t need exceptional pilots here anymore.”
A pioneering airline
Alaska Airlines goes back to 1932, when Linious McGee, known as Mac, bought a three-seat airplane, packed it onto a ship to Alaska and set up the first air link between Anchorage and Bristol Bay, off the state’s southwestern coast. Commercial aviation was still in its infancy; it was only in 1926 that Congress forced the post office to turn over airmail routes to private operators, a moment that is widely seen as the birth of the airline industry.
The airline was one of the world’s largest cargo companies after World War II and participated in the Berlin Airlift in 1948. In the 1950s, it was among the first to offer in-flight movies. In the 1960s, it chartered flights to the Soviet Union, a tricky business at the height of the Cold War. The flight attendants wore Russian Cossack uniforms and served tea out of a “golden” samovar. The planes were known as Golden Nuggets.
Wahto, the retired pilot, says that when he joined in 1970, Alaska Airlines had only 135 pilots, compared with 1,400 today, and its pioneering spirit was still very much alive. It was also on the brink of collapse. Wahto used to race to the bank to cash his check every two weeks because he feared that the airline might not be good for the money much longer. At the time, it flew to just 10 cities in Alaska, plus Seattle.
He saw the carrier take a decisive turn in the 1980s when deregulation upended the industry, lifting restrictions on where airlines could fly. Alaska swooped into Portland and San Francisco, then Southern California. Soon it was flying up and down the West Coast and, eventually, all the way to Mexico.
Alaska Airlines bought Horizon Air, a regional airline operating in the Northwest, in 1986, but has grown for the most part without major mergers and without going through bankruptcy, a rare achievement in the aviation business.
Few airlines have tried to contest Alaska’s hold on its regional routes, because of the high cost of operating in the state and the seasonality of the flying. Alaska also has commercial agreements with Delta Air Lines and American Airlines, allowing them to sell tickets on Alaska flights and reducing their need for much coverage in the state. But there is still some competition. Several carriers offer year-round or seasonal flights from hub cities to Anchorage and Fairbanks.
Unlike its bigger rivals, which have struggled to compete with startups, Alaska has also managed to reduce its costs and remain competitive, analysts say, although that has led to tensions with its pilots’ union. In 2005, William S. Ayer, then the CEO, pushed for pay cuts as fuel prices rose. After the airline and its pilots’ union failed to reach a deal, an arbitrator imposed pay cuts of 21 to 35 percent, depending on seniority. By 2009, however, as Alaska’s prospects improved, pay rose again and pilots participated in the company’s performance incentive program for nonunion employees and executives.
“Growth solves a lot of problems, and Alaska has been able to grow capacity much faster than the rest of the industry,” said Hunter Keay, an airline analyst at Wolfe Trahan.
The airline and its pilots are negotiating a new labor agreement; the current one ends April 1. Chris Notaro, chairman of the Alaska chapter of the Air Line Pilots Association, says he expects pilots to share in the airline’s financial gains.
“We work for an extremely successful company,” he said in an email.
Today, Alaska Airlines has the lowest costs among the major carriers. It has recalled furloughed pilots and is hiring new ones. Its returns on invested capital, a formula meant to reflect an airline’s true financial health, were 13 percent in 2012, a rarity in an industry that historically struggles to turn profits.
Ayer stepped down as chief executive last year, although he remains the chairman. His successor, Bradley D. Tilden, the former chief financial officer, has been continuing his predecessor’s strategy of tightly controlling costs.
Alaska can keep costs down in part because it measures obsessively. The airline 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. It also figured out that, if it could shave just a minute of taxi time from each flight, it could save 500 minutes, or more than eight hours, a day — the equivalent of flying an extra plane daily, said Ben Minicucci, the chief operating officer. If such small efforts allowed the carrier to free up a plane, it could generate $25 million to $30 million in revenue a year.
The company’s share price has risen more than 300 percent since 2008, more than 20 times what the Standard & Poor’s 500-stock index has returned in the same period. Its $3.7 billion market capitalization — more than twice that of JetBlue Airways, which has similar revenue — has also shielded it from the consolidation trend, deterring competitors who might be tempted to pursue a hostile takeover.
From December to June, when ice moves in and the Bering Sea freezes, Nome, a gold-rush city of about 3,700 people 540 miles northwest of Anchorage, is entirely dependent on air service. Each day, three Alaska Airlines flights keep Nome residents connected and well-stocked, as residents fly to Anchorage to shop at Costco and other stores. At the tiny Nome airport, the luggage belt spews microwave ovens, diapers, paper towels, vacuum cleaners, personal computers, fresh produce and other staples that Alaska’s vastness and remoteness turn into luxury items.
The city’s hospital isn’t equipped to perform cesarean sections, so some women are flown to Anchorage to deliver their babies. There is no funeral home in town; Alaska flies coffins in the cargo hold to Anchorage for cremation or autopsies, says Christine Schultz, the hospital’s social services director.
Leo Rasmussen, who owns Nome’s only music store, recalled the winter of 1964, when planes couldn’t land for 19 days because of bad weather. Delays can still happen; the week I visited, a few flights couldn’t land for that reason. But he says people take it in stride.
“Alaskans are patient,” he says. “They know where they live and how they get there.”
Jim Stimpfle, a Nome real estate agent, is one of 23 members of the airline’s residents advisory board.
“Alaskans have a love-hate relationship with the airline,” he says. “Alaska Airlines is the last man standing after other carriers left.”
Two-thirds of the state’s 730,000 residents have enrolled in the airline’s frequent-flier program; Alaska waives some baggage fees for state residents. Still, Stimpfle says, the top complaint has to do with high fares. Recently, a round-trip ticket between Anchorage and Nome for a one-week stay in early April was selling for $450. A round trip from Juneau to Barrow, on the North Slope, on the same days would cost $902.
“It’s a reality that it costs more to fly here,” says Marilyn F. Romano, the company’s regional vice president for Alaska. “People don’t have to like it, but they understand it.”
Some of Alaska Airlines’s in-state flying is backed by federal programs such as the Essential Air Service, which provides subsidies for airlines to fly to small communities they might not serve otherwise. The airline received about $10 million last year for its flights to six remote communities, or about 0.2 percent of its total revenue.
It was still dark around 10 a.m. in Nome in late December, when a day has just two hours of sunlight. I stopped at a small gift and consignment store called Bearing Song and Gifts to talk with the owner, Sarah Hanson, a native of Nome who grew up in Juneau but returned here eight years ago.
“It’s expensive to live here and it’s expensive to leave,” said Hanson, who is also a singer and songwriter.
Still, despite Nome’s isolation, she is able to travel three to five times a year. She is especially pleased that it is so easy to make connections to Hawaii, where she has spent many Christmas holidays since middle school.
“Compared with Alaska, where we face the elements,” she said, “it’s such a tickle to be in the sun.”
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