Alaska Airlines: Navigating Change Harvard Case Solution & Analysis

Alaska Airlines: Navigating Change Case Solution

  1. 1. What was Alaska Airlines’ most dramatic argument for change, in effect, it’s “burning platform” or “melting iceberg?”

Alaska Airlines’ path to success was marred by mediocrity because of its employees, management and some operational areas. Due to the management’s negligence, operations rate of the on time flights of Alaska Airlines decreased from 70 or 75 percent to 60 percent. Bags were also mishandled, to the point that the total number of bags catered to 7 out of 1000 passengers, There were three root causes, which were the reason for the decline in Alaska Airline’s performance. The first and the major problem was in the Seattle Hub of the airline. The organization had to face the problems with it. The second problem was the management conflicts between two groups of employees. The third issue was related operation. Alaska Airlines had the need to develop strategic planning in order to respond to these problems.

In response to these issues, the first action that was taken by the Alaska Airlines was hiring of a vice-president at their Seattle operation. Before this change, every department was operating the hub through independent managers. The vice-president held a meeting that involved the discussion on current performance of the operation. Scorecards were used to identify the scoring of intended processes. Moreover, they were used to evaluate the steps of the aircraft turn. The meeting resulted in decision to implement lean processes in the operations with which wastages will be eliminated.

The “burning platform” was the dramatic change for Alaska Airlines. Moreover, it responded in the form of improvements in the operations. Hence, Alaska Airlines got an increase in its on-time departures, standings power of J.D, and mishandling of the bag rate also declined. Furthermore, operating margins also improved from 2005 to 2010. In particular, the year 2008 brought significant results to the performance of Alaska Airlines. It was the first year of the change in the management and operational process. In this year, Alaska Airlines ranked at number 1 in the J.D. Power for passengers’ satisfaction. Furthermore, in the second year of the change effort, the work processes of Seattle were standardized by the system. The development of the company was made by new VP of Seattle operations with the supervision of company-wide oversight team. The new management’s efforts enhanced the financial and operational performance of Alaska Airlines. In addition, its fleet transitioned towards MD-80 aircraft. Alaska Airlines was the second airline, which adopted this aircraft strategy; Southwest Airlines developed this strategy. The specialty of the Boeing was its fuel efficiency and its reliability in fleets. The training of the employees and the crew was also a very convenient process. The employees can maintain its parts easily if they have appropriate training.

  1. What “legacy” assumptions that were part of the existing culture were challenged and tested?
  2. The salaries and benefits of the employees reached to 39 percent of the overhead costs in 2002. The airlines were unable to bear the cost and as a result, many of the competing airlines went bankrupt. Many facts about the highest industry payroll of the Airline employees appeared. It came into view that the annual salaries of the two main giants Alaska and Horizon Airlines jointly accounted for about $1 billion in 2004. Moreover, that the pilots of Alaska alone accounted for approximately $70 million. These pilots have established their lifestyles well. Furthermore, payroll of Alaska incorporated $350 million. It was shown from the payroll of the Alaska that, it has a competitive disadvantage due to its high pay scale within the Airline industry.

Analysts anticipated that if the company will not be concerned about the situation, it would get bankrupt.....................

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