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Brief Summary
The performance of Alaska Airlines during the eighty years in the air has been fluctuating in response to prevailing economic conditions and severe competition in the aviation industry. Financial data indicate that the financial growth rate of Alaska Airlines has been declining and bordering on bankruptcy and financial crisis. In 2005, the management observed that the airline had a negative trend owing to numerous operational issues, which reduced the effectiveness and efficiency of operations. Factors contributing to the negative trend include complacency, tragedies, augmenting costs, labor issues, operational complications, fragile operations, and poor airline standards. Dominant metrics of analyzing the performance of the airline indicated that seven out of 1000 bags were mishandled and about 60% of flights were on time. Owing to these challenges, which have contributed to the downward trend, the airline executives met and designed effective strategies aimed at revolutionizing Alaska Airlines. After a series of deliberations, the executive came up with three strategies to fix the Seattle hub, hire an experienced operations manager, and break restrictive silos. The implementation of these strategies within five years effectively transformed the airline by increasing its efficiency and profitability, while providing quality services to customers.
Central Argument of Author
The central argument of the author is that effective management of operations in an organization such as Alaska Airline requires multiple strategies aimed at resolving diverse problems. Since operations are determinants of organizational performance, their effective management translates into the optimal productivity of employees. The author uses the case of Alaska Airlines to demonstrate how an organization with meager managerial strategies reduces employee performance and profitability. The analysis of the managerial stance shows that it contributed to financial and labor crises that affected the growth and development of the airline. As for indicators of the declining trend, Alaska Airlines recorded a negative net profit, experienced reduced on-time flights to 60%, and increased mishandled bags to seven per 1000 bags. These indicators warned the executive of an impending bankruptcy if they would fail to strategize and reverse the declining trend.
The author used the historical development of Alaska Airlines in describing factors that contributed to its success and failure in various instances over time. In the late 20th century, the airline dominated the US markets due to the quality of services it provided to customers. However, a series of problems occurred over time and reinforced each other, resulting in a significant decline in the performance of the airline in the early 21st century. The airline had gained a reputation and considerable market share, it enjoyed customer loyalty and goodwill, but it started to exhibit a complacency culture. Consequently, the airline did not see the need to improve the quality of its services, leading to the loss of customer loyalty and competitiveness. The history of labor shows the airline did not provide comprehensive and sustainable compensation for employees, causing constant and persistent strikes, lawsuits, and negotiations. Long and distressing arbitration processes reduced the commitment, productivity, and morale of employees.
Tragedies in the airline industry contributed to the declining trend of profitability and the sustainability of critical operations. Consecutive tragedies of the MD-80 jet on 31 January 2000 and the terrorist attack on 9 September 2001 severely disrupted operations of the airline. Since fuel prices augmented significantly in the early part of the 21st century, coupled with disrupted operations, the airline registered massive losses in 2001 through 2006. Constant and persistent labor strikes created a labor crisis as pilots, ramp workers, mechanics, luggage handlers, and flight attendants refused to accept pay cuts, but instead, they re-negotiated for an improved pay amid the airline’s bankruptcy. Downstream effects of inefficiencies complicated operations as employees lost morale and commitment to perform their tasks optimally due to unfair termination conditions. For instance, the introduction of ramp vendor demoralized employees for the management sourced unskilled cheap labor. Hence, a myriad of factors contributed to the poor performance of the airline.
The author holds that a comprehensive analysis of the presenting situation of Alaska Airlines requires a multi-strategic approach. The executive leadership of the airline brainstormed and formulated three key approaches, which revolutionized change development. In the first strategic approach, the executive leadership planned to fix the Seattle hub because it has a considerable influence on the airline system. Managers and directors attended daily meetings where they discussed factors that hinder operations and reduce the efficiency of outcomes. As the second strategic approach, the executive leadership agreed to establish a vice-president position to control operations in Seattle. The vice-president selected was an experienced person with appropriate knowledge of operations, passion, accountability, and management skills. The third strategic approach is that the executive management recruited a person with collaborative assertiveness to break restrictive silos and create effective teams. Thus, the author argues that the three approaches were effective for they revolutionized Alaska Airlines and made it retain the previous status in the airline industry.
Analysis
In the analysis of the central argument, I agree with the stance of the author that poor management of operations led to the declining trend of growth in Alaska Airlines. On-time flights and mishandling of luggage are key outcomes that exhibit the performance of the airlines and their compliance with the standard operating procedures. These key outcomes are relevant in depicting the performance and productivity of employees in the airline industry. Given that operations are routine activities, which reflect how employees undertake their duties, they are determinants of the quality of services that the airlines provide to travelers. The examination of the history of Alaska Airlines indicates that it has faced challenges such as labor strikes, high costs of fuel, accidents, disasters, competitions, and operational issues. These factors are plausible for they are common in the aviation industry where operations are dominant and sensitive to performance. Therefore, I agree that a change leader is necessary to implement multiple strategies aimed at streamlining operations and boosting employee performance.
Further analysis of the argument indicates that the author is convincing in describing the case of Alaska Airlines and providing recommendations. By using a real-life example, the author provides a convincing argument regarding Alaska Airlines and its growth amidst management challenges. Additionally, the argument notes a major accident and a tragic terrorist attack as real-life events that disrupted airline operations and contributed to the declining performance. The use of figures in illustrating the extent and degree of metrics enhances the description of the case study and promotes comprehension, and thus, persuades readers. Tabulations showing net income, profit margin, salary, fuel cost, and operating margin are very convincing for they demonstrate financial indicators. The historical background of Alaska Airlines is compelling since it mentions true events and competing airlines in the aviation industry.
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