Airlines of the Future

April 1, 2004

April 2004

Those who work for Alaska Airlines declare that strong leadership, strategic planning, hard work and determination are all part of the equation that create their unified team with the "Alaska Spirit." Over a period of 70 years, Alaska has grown from a regional to a well-respected international airline carrying more than 14 million customers per year to more than 40 cities and three countries. According to Alaska Airlines, they are an innovator in the application of new air and ground technology, which has resulted in improved safety and improved cost management and productivity. But all has not been perfect over the years and growth has not come without arduous change marked by these new technologies.

Culture Change Rather than Culture Shock
Jeff Schultz, Managing Director of Station Support at Alaska Airlines (AS) and his group are concerned with the operational issues. They take care of procedures, security, training and technology - project processes and implementation. Through process analysis and LEAN - a term used in manufacturing, the station support group determines and then proceeds to remove waste, redundancy, unnecessary practices and motion. Schultz very matter-of-factly explains there was a time when, "We didn't have discipline, we didn't have focus, we didn't have processes and procedures that supported it and we didn't have a culture that had visibility to account for what the processes were. That is not to say we weren't a safe and profitable operation, we just weren't very efficient."

Schultz will tell you that not more than five years ago, Alaska was one of the worst in the industry for baggage performance overall. "[It was] a lack of focus and a lack of discipline. We didn't have a culture, that said, the bags and passengers are one thing, the same commodity traveling in two different compartments yet that should be kept together. Instead, our focus was on passengers, getting them from here to there."

In 1999 they started a two-year effort to not only correct the baggage handling process but to make it one of the best in the industry. Schultz's team began by getting a good understanding and mapping each maneuver in the baggage world and the cascading events that occur as a result. During this process of taking steps out, moving steps and inserting new steps in the right places, they identified what Schultz referred to as a definite "launch sequence" very much like NASA, however nobody thinks about it in that regard. He claims, "You think about the launch sequence as being something that happens when a flight hits a gate and all this activity happens and 30 or 35 minutes later - pushback and its done. In reality, NASA starts its shuttle launch sequence three years in advance. And if you think about what we do, it's no different. Somebody comes up with a plan for moving our aircraft around based on market and schedule asset efficiency, hopefully with some profitably built into it. Then from the time that you plan that schedule, load it and start selling fares, there's a whole lot of activity that comes in to play."

Schultz describes it as a "choreographed effort until you get down to the T- minus 30 and counting" and that moving bags was just a tiny subset of that process. In taking a different look at it, they discovered that there are very silo'd processes in the industry. Whether it's the maintenance department, flight ops, flight attendants, etc., each group focuses on their operations and they don't necessarily communicate with one another well. But at some point in the chain of events every one of these people affects somebody else and because the "launch sequence" that Schultz describes is in multiple places, it's important that the entire process is tied together.

During a two year effort, the Station Support Group developed a comprehensive understanding of all of the complexities in the baggage world.

Applying visibility, accountability and technology, the station support team broke it down into the smallest process elements and began fixing each element, one at a time. "The way that we approach every one of these processes is we just stick a target on the wall (the very end goal) and we back away from that," explains Schultz. "Our goal is to be number one. Then we involve the front line folks, they are the subject matter experts. The knowledge engineers and my team just guide them through the process. Here's the goal now, how are you going to get us there?"

First they organized the Ramp Action Services Resource Center (RAC) in their hub cities to be the coordination point for interaction with Systems Op Control (SOC). Each center has full visibility of the transfer of thousands of passengers and tens of thousands of bags a day. Next they formed teams for specific areas. FIRST (Focus on Investigating Ramp Solution), is the under the wing team (outside the terminal) which developed process procedures for making sure bags got on the planes. The over the wing team (or inside the terminal) is known as BEST (Better Environment for System Tracing). They developed a front-end application to keep track of the overall process. Finally, Alaska partnered with Northwest Airlines by having a NWA representative join the RAC at their major hub enabling full visibility of both airlines' systems, thus alleviating problems with the coordination and transfer of passengers and baggage. Schultz can say "mission accomplished" with the implementation of the new baggage handling system because for the past three years now, Alaska Airlines has been number one in baggage service.

Business, Only Not as Usual
According to Schultz, to be able to provide the same passenger service Alaska Airlines did 10 years ago in the changing environment they had to become something different. "Everybody (the airlines) flies the same airplanes to the same places and it takes the same amount of time to get there," states Schultz. "We tweak our schedule, we offer a few different amenities but everybody's got mileage plan programs or soem sort of passenger enticement. We are noted for our service, but it's our people that make us different. We didn't want to change our culture, but economics force us to change the product that we deliver. When we looked at it from that perspective, we needed to put the 'Alaska' spin on how we did things."

When 9/11 came along Schultz said they had to look at the way they did business. Passengers stopped flying, costs continued to escalate and airlines had to do a reality check and find a way to trim expenses, which meant no longer doing business the same way. The full process engineering and re-engineering initiatives already in place were simply accelerated as a result. Noted for their technology and embarking on what has been dubbed the "Airport of the Future," Alaska was the first with ITMs, the first with internet check-in service and the first with wireless (WAP) technology for checking in on a cell phone.

However, another important initiative that Schultz's team was looking at was improving efficiency in the utilization of a staff of 4000; how do you ensure that you have the right number of people in the right place at the right time who will be proactive as opposed to reactive. They were looking for a staffing solution that would not only determine planning but would execute it as well. Alaska Airlines turned to Ascent Technology's SmartAirline WorkZone, a comprehensive staff allocation and task-management solution that allows airlines to consistently assign the right number of workers to the right tasks at the right times for maximum efficiency. "In our work with airlines and handling companies throughout the world, we discovered that there were no systems that could provide an integrated system-wide view of operations and optimized ground resources," says Windler Schweer Vice President of Sales and Marketing. "We developed our SmartAirline Operations Center to allow users to plan effectively, lower employee and equipment costs and ensure desired levels of customer service. This is a program that the industry has needed for a long time."

It is difficult geographically for airline workers to communicate with each other as a group-they are simply too spread out and they work at different times of the day. Staffing decisions are also difficult to make. They involve literally thousands of changing variables-everything from when a plane will arrive at a gate to how many people it takes to service each type of plane. The SmartAirline WorkZone software allows workers, managers and headquarters planning staff to collaborate on the best way to meet these workforce challenges. It provides a shared web-based environment in which workers manage their work life - they can bid on jobs, swap days off, review work schedules and review private personnel information in a secure manner. Employees can look back and see why past staffing decisions were made the way they were - and refine the rules that led to those decisions. They can also look forward and see what outcomes are likely to happen if various operating scenarios occur. Everyone involved is also much more likely to support a staffing decision if they agree with the reasons behind it - or at least have had an opportunity to provide input.

"This is a very complex business," says Schultz. "It is not just the comings and goings of aircraft, but the multitude of tasks that need to be accounted for which are associated with each of those aircraft - as well as all the security considerations and all the other operational irregularities that can occur." What airline planners and managers should realize, Schultz continues, is that they don't have to reinvent the wheel every time they face a staffing issue. They should be able to repeat their best planning, which they continually refine as they work new problems. "Our goal in acquiring this software was not only to automate what was once a very manual process. We also wanted to apply science to a complex problem and get a repeatable solution."

Alaska Airlines introduced Ascent Technology's SmartAirline 'Workzone', a comprehensive staff-allocation and task-assignment solution.

"What SmartAirline WorkZone lets us do," says Schultz, "is to very quickly run alternative scenarios. We can apply all the existing rules to the new scenario and the software will tell us if the staffing schedule is sufficient to support that scenario. For example, should we put a RON [remain over night] aircraft at a gate? What are the staffing decisions that are going to drive us to do that? Can we do the RON more efficiently someplace else where we already have staffing? The software will tell us more quickly where the efficiencies are in our flight schedule in terms of staffing and staff deployment." And the best part: As a result, Schultz says they have been able to improve their efficiencies by up to 27percent. "Greater efficiency need not come at the expense of service, declares Schultz. "In fact, quality goes up because nothing falls through the cracks."

Shall We Dance?
To continue to stay in step with every aspect of operational excellence, Alaska Airlines has reinvented the tango to be able to perform the dance at the airport. TANGO, which stands for Turn Aircraft N' Go, is a new program that is expected to reduce turn times by up to five minutes adding the equivalent of three aircraft to the fleet at little cost to the airline. Sandy Stelling, Director of Production Support, who headed the team of employees from several divisions that developed the program says, "People have compared turning an aircraft to an orchestra playing great music. Each group of instruments has a specific role - violins might carry the melody, while percussion section provides the rhythm. But each group solely playing its part is not enough to make a great sound. They must all play together, leading on some occasions, supporting in others, but always aware of how each individual contributes to the sound of the entire orchestra."

Employees are giving high marks to the newly introduced turn process known as "TANGO" that synchronizes every aspect of turning an aircraft.

The main difference between a TANGO turn and the shorter turns (35 minutes or less) that employees have been doing when an aircraft comes in late, is the focus on both predictability and synchronization across work groups. By developing an explicit timeline of activities for each work group and designing it to be highly coordinated, rather than being a "fire drill", it has become standardized so that a short turn can be done every time. "TANGO will be further enhanced and refined through the involvement of those on the frontline and their teamwork and problem-solving skills, " notes Stelling.

According to Alaska, using the TANGO turn will collectively add up to 30 additional hours of flying time per day. The improved efficiency has freed up enough aircraft time to allow the airline to launch Seattle-Chicago nonstop service in April.

Simplify, Redesign, Standardize
Alaska Airlines is continually finding ways to improve the way they do business by eliminating waste, maximizing resources and lowering costs of goods and services. Perhaps CEO Bill Ayer states it best in discussing Alaska's strategic goals for 2004, "Rather than simple cost cutting, we believe our goals can best be achieved through breakthrough thinking that focuses our energies on reducing waste, running an excellent operation and limiting spending money on things that provide optimum customer value and enhance our brand image."