Alaska Airlines Makes Wide-Ranging Changes to Return to Strength; Much Work Will Be Contracted Out
09 Settembre 2004 - 11:45PM
PR Newswire (US)
Alaska Airlines Makes Wide-Ranging Changes to Return to Strength;
Much Work Will Be Contracted Out SEATTLE, Sept. 9
/PRNewswire-FirstCall/ -- As part of an ongoing effort to improve
its competitive standing in the post-9/11 airline industry, Alaska
Airlines today announced a wide-ranging series of initiatives to
streamline operations and enhance the carrier's long-term
viability. It comes on the heels of a management reorganization
that started last month. Counting the management reductions, Alaska
will be trimming nearly 900 of its more than 11,000 employees. The
collective savings is projected at between $30 million and $35
million per year. In many ways, Alaska is following an industry
trend accelerated by the rise of low-cost carriers: contracting out
some of the work that up to now has been accomplished in house.
"The permanent and dramatic changes in our industry have forced us
to put aside notions about how we've historically operated and to
consider all alternatives to improve our competitiveness," said CEO
Bill Ayer. "The goal is first to make sure that we survive, and
then to emerge from the most difficult period in the history of
commercial aviation as one of the highest performing airlines."
"Since 9/11, we've worked hard and taken great pride in our ability
to reduce costs without impacting people," Ayer added. "We've done
this by implementing more than $150 million per year in non-job
related savings, found largely through process improvements and
technological advancements, plus opportunistic growth into new
markets. Unfortunately, changes in the competitive and economic
climate have continued at a rapid pace, requiring us to take even
stronger measures to secure our future." Here are the major
changes: -- Immediately closing the Oakland heavy maintenance base,
which employs 340 people, and contracting out all heavy maintenance
needs to Goodrich Aviation Technical Services of Everett, Wash. and
AAR Aircraft Services of Oklahoma City, Okla. - two firms the
airline already uses for about 60 percent of its heavy maintenance
work. Contracting for heavy maintenance is a practice employed in
varying degrees by all of the nation's major airlines. "Our Oakland
mechanics are highly talented and have made great strides over the
past years by implementing new systems and processes," said Ayer.
"They did their work very well. But the sobering reality is that
large-scale maintenance providers can give us the same excellent
quality at a lower cost." -- Contracting for all fleet service
functions -- the cleaning of aircraft interiors between flights --
in Seattle, Anchorage, Fairbanks and Juneau. The number of people
impacted is 273, the vast majority in Seattle (158) and Anchorage
(93). Twelve more are in Juneau and 10 are in Fairbanks. -- Closing
ground support equipment and certain facilities maintenance
operations and hiring contractors to perform the work. "This is no
reflection on our people or their work. It's a question of cost,"
Ayer said. This decision affects 60 facilities employees and auto
mechanics at 10 stations (Seattle 30, Anchorage 14, Oakland two,
Fairbanks two, Juneau two and one each in Portland, Ketchikan,
Sitka, Nome, Kotzebue and Barrow). -- Taking advantage of the
respective strengths of Alaska and sister carrier Horizon Air
through greater sharing and shouldering of services where it makes
sense. Some of that will be behind the scenes with increased
collaboration in planning and accounting. And some of it will be
more visible. All customer service work in Spokane will be taken
over by Horizon and, in turn, Alaska will assume all of Horizon's
ticket counter work in Portland. These changes affect 30 Alaska
employees in Spokane and 21 Horizon employees in Portland. -- With
just one flight per day in Tucson, Alaska will contract with a
third-party to fill customer service needs there. Thirteen
employees will be displaced as a result. Alaska also is making
significant changes in how it operates at Prudhoe Bay, triggering
five layoffs there and a cut in hours for the remaining 15 people.
-- Closing three city ticket offices -- in Juneau, Anchorage and
Bellevue. This will displace nine customer service agents. --
Closing the four-person pilot crew scheduling office in Los Angeles
and consolidating the work at a larger scheduling office in
Seattle. "While the guiding principles for these decisions are to
maintain high quality at a lower cost, our values of integrity and
caring guide us on how we treat people leaving the company," Ayer
said. For those employees impacted, Alaska has talked with union
leadership about the possibility of offering one of the most
generous financial and job-finding assistance packages the industry
has seen since 9/11 triggered more than 100,000 layoffs at other
carriers. Alaska has offered an attractive voluntary severance
incentive to employees in the most-affected work groups in the
hopes of minimizing involuntary departures by creating openings
elsewhere in the system. Ayer said Alaska will continue to look at
every possible way to improve its cost structure and competitive
standing. The aim, he said, is to be an airline where jobs and
retirements are secure and career advancement opportunities abound,
as well as an airline that provides great value for customers and a
solid return for shareholders. And all of that will only be
possible if we complete our transformation and are able to
weatherproof ourselves from the inevitable ups and downs of the
economy." Alaska Airlines and its sister carrier, Horizon Air,
serve more than 80 cities in Alaska, the Lower 48, Canada and
Mexico. For more news and information, visit the Alaska Airlines
Newsroom on the Internet at http://newsroom.alaskaair.com/ . This
release may contain forward-looking statements that are intended to
be subject to the safe harbor protection provided by Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements relate to future events or
future financial performance and involve known and unknown risks
and uncertainties that may cause actual results or performance to
be materially different from those indicated by any forward-looking
statements. In some cases, you can identify forward-looking
statements by terminology such as "forecast," "may," "will,"
"could," "should," "expect," "plan," "believe," "potential" or
other similar words indicating future events or contingencies. Some
of the things that could cause actual results to differ from
expectations are: economic conditions; the continued impact of
terrorist attacks, global instability and potential U.S. military
involvement; the company's significant indebtedness; downgrades of
the company's credit ratings; the competitive environment and other
trends in the company's industry; changes in laws and regulations;
changes in the company's operating costs including fuel; changes in
the company's business plans; interest rates and the availability
of financing; liability and other claims asserted against the
company; labor disputes; the company's ability to attract and
retain qualified personnel; and inflation. For a discussion of
these and other risk factors, see Item 1 of the company's Annual
Report on Form 10-K/A for the year ended December 31, 2003. All of
the forward-looking statements are qualified in their entirety by
reference to the risk factors discussed therein. These risk factors
may not be exhaustive. The company operates in a continually
changing business environment, and new risk factors emerge from
time to time. Management cannot predict such new risk factors, nor
can it assess the impact, if any, of such new risk factors on the
company's business or events described in any forward-looking
statements. The company disclaims any obligation to publicly update
or revise any forward-looking statements after the date of this
release to conform them to actual results. DATASOURCE: Alaska
Airlines CONTACT: Lou Cancelmi, +1-206-392-5170, or Sam Sperry,
+1-206-392-5038, both of Alaska Airlines Web site:
http://www.alaskaair.com/
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