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Thursday, May 30, 2002 - Page updated at 12:00 AM

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Round-trip relationship binds Alaska and namesake airline

Seattle Times aerospace reporter

ANCHORAGE — Without Alaska Airlines, Margy Johnson wouldn't be the mayor of Cordova. The Alaskan fishing town simply couldn't exist.

Cordova, on Prince William Sound, has no roads out of town. A trip to the dentist is a trip on an airplane. Its sole source of commerce, Copper River salmon, would never make it to market without Alaska Airlines' distinctive Boeing 737s.

"For a little town of 2,500, we consider ourselves extremely fortunate to have a major carrier like Alaska," Johnson said. "Alaska Airlines has never forgotten its roots."

As Alaska Airlines' parent company holds its annual meeting in Fairbanks today, the carrier's dominance in this frontier state elicits more gratitude than grumbling.

Since the carrier's founding as McGee Airways in Anchorage 70 years ago, the airline and the state have developed a symbiotic relationship unlike anything in the Lower 48.

Seattle-based Alaska is holding its shareholder meeting in Alaska for the first time in three decades.

Alaska controls three of four airplane seats flown between Alaska and the West Coast. In 10 of 19 communities it serves here — many surrounded by terrain too rugged for roads — the airline has no competition for passengers.

The carrier has invested in cutting-edge technology, pioneering a system that guides pilots during takeoffs and landings in bad weather.

To serve small towns, the airline has specially configured a fleet of Boeing 737 planes that carry cargo up front, passengers in back.

In return, residents pay higher fares and see few of the bargain tickets common in the rest of the United States.

For example, Johnson typically pays $250 for a round trip between Cordova and Anchorage, 159 miles by air. That's about what some carriers charge for a restricted coach ticket between Washington, D.C., and Denver, nearly 10 times the distance.

Yet Johnson suspects the airline makes a marginal profit, if any, in Cordova, because of the small volume of passengers. "Many times I'm getting on the airplane in Cordova, I'm the only passenger on the plane," she said.

Perception that Alaska Airlines gouges passengers is most acute in southeastern Alaska, where the carrier flies to seven communities stretching from Yakutat to Ketchikan without a single competitor for passenger flights. Alaska Airlines also has a passenger monopoly in the Bering Sea communities of Dutch Harbor, Nome and Kotzebue.

Kay Sherfield, Alaska corporate-sales manager in Anchorage for Navigant, a travel-management firm, said she hears periodic grousing from clients in Dutch Harbor about Alaska Airlines' ticket prices.

The cheapest round-trip fare between Dutch Harbor and Anchorage usually runs about $760, nearly $1 a mile, she says.

By contrast, between Anchorage and Seattle, Alaska Airlines' busiest route, the carrier charges about $300 and under for coach fare, or 20 cents a mile or less.

Some Alaskans "think that if there were more competition, that would drive the price down," Sherfield said. Still, many others "just plain appreciate the fact that they have an option."

Gregg Saretsky, Alaska Airlines' executive vice president of marketing and planning, said many Alaskans who complain about high fares don't realize the expenses associated with operating in remote areas.

For instance, the airline had to build its own terminals before it could fly into small communities such as Cordova. In Prudhoe Bay, an Arctic oil-drilling town where the Alaska pipeline begins, the airline had to build housing for its employees.

Many destinations, such as Juneau, Alaska's capital, pose weather and terrain challenges that sometimes force pilots to make several landing attempts or divert to the nearest city.

Saretsky said the airline's Alaska routes are profitable on an annual basis. In 2001, traffic to, from and within the state of Alaska accounted for $447 million, or 28 percent, of Alaska Airlines' revenue.

The state of Alaska is not the only market where a single carrier dominates traffic.

Alaska Airlines has even greater market clout between the Pacific Northwest and Southern California, accounting for 78 percent of the airplane seats. The carrier flies 74 percent of the seats between the West Coast and Alaska.

But competing airlines abound in the Lower 48, whereas in the north Alaska Airlines mostly has to contend with only a commuter-carrier rival or two, if at all.

State Rep. Andrew Halcro, an Anchorage Republican, is an avid user of Alaska Airlines' Web site. Lawmakers have to pay for their weekend home visits, which for Halcro normally means $249 to $536 for the one-hour, 40-minute flight from Juneau.

Halcro said he can only watch longingly when he finds special Alaska Web fares such as a $79 round trip between Seattle and San Francisco.

"You can never find any out of Anchorage or Juneau," Halcro lamented.

There hasn't been a fare war here since the early 1990s, when Anchorage-based low-fare carrier MarkAir challenged Alaska on its home turf — and ended up in bankruptcy.

After MarkAir's demise, a bill surfaced in the state Legislature to spend $1 million to entice competing carriers to the state and to explore hiring charter planes to provide alternate air service to southeastern Alaska. The measure never got out of committee.

One factor in MarkAir's demise, said its chairman, Neil Bergt, was Alaska Airlines' ubiquitous frequent-flier program, which he likened to an addiction among the state's population.

Out of Alaska's 626,000 people, some 240,000 belong to Alaska Airlines' frequent-flier program. Practically every Alaskan adult carries an Alaska Airlines credit card.

Johnson, the mayor of Cordova, enrolled her son in Alaska Airlines' frequent-flier program when he was 10. She has earned enough miles to give trips to family and employees and still have 500,000 miles left.

She believes the bond between the airline and its namesake state will endure for many more miles.

"We are where they began, we are their past and we are their future," Johnson said.

Kyung M. Song can be reached at 206-464-2423 or ksong@seattletimes.com.

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