Alaska Air Group

Company report, featuring a PESTLE, Porters Five Forces, 5C, MOST, CATWOE and SWOT analysis

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Introduction

This study on Alaska Air Group, which is a part of our coverage of the 10,000 largest companies in the world, is definitive. To make sure the information provided is always current, it is produced and updated regularly and on an accelerated schedule.

Premium members have full access to the study, which includes the SWOT analysis, PESTLE, 5C analysis, CATWOE, Porters Five Forces, MOST analysis, and a myriad of additional high-value sections.

In addition to the analytical work, we are also looking at potential new products and services, predicting future market trends, and exploring possible collaborations between Alaska Air Group and other organisations.

Company Description

Alaska Air Group is headquartered in Seattle, Washington and was founded in 1932. The main products and services of the company are its passenger and cargo airlines, which serve U.S. and international destinations. The company is particularly well-known for its passenger airline, Alaska Airlines, which provides flights to more than 115 destinations across the United States, Canada, Mexico, and Costa Rica. Alaska Air Group also operates the regional carrier Horizon Air, as well as a cargo airline.

Industry Overview

The Alaska Air Group operates in the airline industry, which is estimated to be worth over $1 trillion USD per year. The industry employs over 4 million people across the world, with the majority of employees based in the United States. The industry also employs workers in countries such as China, India, and Japan. The industry is highly competitive, with several major players including Alaska Air Group.

Industry Classification

In terms of formal classification, Platform Executive has tagged Alaska Air Group as a business operating within the Airline and Air Travel industry.

1. Introduction
2. Company Description
3. Industry Overview
    3.1 Industry Classification
4. Intellectual Property
5. Major Products and Services
6. Key Competitors
7. Stakeholders
8. Value Proposition
9. Customers and Cohorts
10. Competitive Advantages
11. Market Trends
12. Key Performance Indicators
13. Financials (BETA)
    13.1 Highlights
    13.2. Board members
    13.3 Share Performance
    13.4 Income Statement
14. PESTLE Analysis
15. Potential Products/Services
16. Potential Synergies
17. Porter's Five Forces
18. CATWOE Analysis
19. SWOT Analysis
    19.1 Strengths
    19.2 Weaknesses
    19.3 Opportunities
    19.4 Threats
20. 5C Analysis
21. MOST Analysis
22. Innovation Scorecard
23. Appendices

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Intellectual Property

Some of the Patents granted to, or relevant to the organisation include the following:

Patent Title: Passive system for initiating emergency descent of aircraft
Patent ID: US10389986B2
Date: 2019-07-23

Patent Title: In-flight data collection system and method
Patent ID: US10389985B2
Date: 2019-07-23

Patent Title: Generating an alert based on analysis of a flight parameter
Patent ID: US10389984B2
Date: 2019-07-23

Patent Title: System for tracking aircraft and associated method
Patent ID: US10389983B2
Date: 2019-07-23

Patent Title: System and method for tracking aircraft in an airport environment
Patent ID: US10389982B2
Date: 2019-07-23

Patent Title: System and method for tracking aircraft in an airport environment
Patent ID: US10389981B2
Date: 2019-07-23

Patent Title: Automated aircraft tracking system and method
Patent ID: US10389980B2
Date: 2019-07-23

Patent Title: System and method for generating a visual representation of an aircraft
Patent ID: US10389979B2
Date: 2019-07-23

Patent Title: System and method for monitoring aircraft performance during flight
Patent ID: US10389978B2
Date: 2019-07-23

Patent Title: System and method for monitoring aircraft performance during flight Patent

Major Products & Services

The main products and/or services commercialised by this business include the following:

Airline services (passenger and cargo)
Vacation packages
Aircraft maintenance services
Flight training
Air charter services
Loyalty program
Airport lounge access
Credit card rewards
Car rental services
Hotel accommodations
Travel protection services
Baggage handling services
Specialty travel services
Airport management services
In-flight entertainment
In-flight catering services
Aircraft ground handling services

Key Competitors

We have identified the following organisations as being key competitors:

Delta Air Lines
American Airlines
Southwest Airlines
United Airlines
JetBlue Airways
Hawaiian Airlines
Allegiant Air
Frontier Airlines
Sun Country Airlines
Spirit Airlines

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Key Stakeholders

Stakeholders are individuals or groups who have an interest in a business and/or are affected by its actions.

These stakeholders can have different requirements and expectations from the business, which must be taken into account when making decisions.

By understanding their stakeholders’ requirements, a business can make informed decisions that benefit all involved.

Below is the list of internal and external stakeholders we have identified for this business:

1. Customers: Alaska Air Group's customers are the people who fly its airlines and purchase its services.

2. Employees: Alaska Air Group's employees, including pilots, flight attendants, mechanics, customer service agents and administrative staff, provide the services that create value for customers.

3. Shareholders: Alaska Air Group's shareholders are the owners of the company and receive a return on their investment.

4. Partners: Alaska Air Group's partners include other airlines, hotels, rental car companies, and travel agencies with whom it has strategic alliances.

5. Suppliers: Alaska Air Group's suppliers provide the goods and services needed to operate their airlines and to provide services to customers.

6. Communities: Alaska Air Group's operations have an impact on the communities in which it operates, from noise pollution to economic impact.

7. Governments: Alaska Air Group is subject to regulation and taxation from federal, state, and local governments.

Value Proposition

A value proposition explains the unique value and/or benefits that an organisation provides to its customers, partners, stakeholders and the overall market. It outlines what makes a company like Alaska Air Group different from its competitors, along with what it can offer that key competitors cannot.

A corporate value proposition can be used with the competitive advantages section of this report in order to better understand Alaska Air Group and its position within the marketplace.

The value proposition for Alaska Air Group is to provide customers with the best in class air travel experience. The company offers a wide range of services and amenities, including non-stop flights to more than 60 destinations in the United States, Canada, Mexico, the Caribbean, Central America, and South America. Alaska Air Group also offers international services to more than 60 destinations in Europe, Asia, and the Pacific.

Competitive Advantages

Competitive advantages are unique attributes, strategies, resources, or capabilities that allow an organisation to outperform its competitors and achieve superior market position and profitability.

Competitive advantages for the business include the following:

Loyal customer base: Alaska Air Group has a long history of providing excellent customer service and satisfaction, which has resulted in a large and loyal customer base.

Brand recognition: Alaska Air Group has a strong brand name and recognition in the U.S. market, which is a key competitive advantage.

Network size and route diversity: Alaska Air Group has an extensive network of routes across the U.S., providing customers with a wide range of options.

Financial stability: Alaska Air Group is financially sound and has a track record of consistent profits and growth.

Modern fleet: Alaska Air Group has a modern fleet of aircraft which is more efficient and cost effective.

Experienced management team: Alaska Air Group has an experienced and knowledgeable management team with decades of experience in the airline industry.

Customers & Cohorts

As part of this competitive intelligence study, we have identified the main customers of the organisation.

These include the following cohorts:

Business Travelers
Leisure Travelers
Vacationers
Group Travelers
Military Personnel
Senior Citizens
Students
Family Travelers
Corporate Employees
Elite Loyalty Program Members

Market Trends

Market trends can impact an organisation by influencing consumer behavior, altering supply and demand dynamics, and affecting the organisation's ability to remain competitive in the market.

As part of this study, we have identified a number of potential short-term to medium-term trends that could impact the organisation. These include the following:

Increased Environmental Regulations: The airline industry is subject to stringent environmental regulations, and the cost of not meeting these standards can be substantial. Alaska Airlines has already taken steps to reduce its carbon footprint and may need to continue to invest in new technologies that are more efficient and less polluting.

Rising Fuel Prices: Fuel is a major expense for airlines, and rising prices can have a significant impact on the bottom line. Alaska Airlines will need to look for ways to reduce fuel costs, such as using more fuel efficient aircraft or developing alternative fuels.

Increased Competition: In recent years, there has been an influx of low-cost carriers in the airline industry. These carriers offer discounted fares and often operate in the same markets as Alaska Airlines. This increased competition will require the airline to remain competitive and may result in reduced profits.

Changing Consumer Habits: Consumer habits are constantly changing, and it is important for airlines to stay ahead of the curve. Alaska Airlines will need to understand what customers want and how they want it, in order to remain competitive. This includes everything from fare structures and loyalty programs to in-flight entertainment and services.

Key Performance Indicators

Below is a list of KPI's that we have identified as being strategically relevant to this organisation:

Financials (BETA)

The key financials for Alaska Air Group include income statements, which can be found in their annual reports. These financial statements provide information on the organisation's financial performance and health, including revenue, expenses, and profits. This information, along with other indicators are used by investors, analysts and other stakeholders to evaluate the company's performance and future prospects.

Where a financial does not match, we have included those of the parent company (if a listed entity). If the financials are missing please contact us and we will prioritise the update.

Key Personnel

Income Statement

[eod_financials target="ALK.US" id="10329343" preset="Income Statement" years="2018-2023"]

Highlights

Top-level corporate stats and financial highlights for the listed entity, include:

Share Performance

Below is the current (EOD) share performance for the company, or its listed parent:

Potential Products/Services

As part of this study we have attempted to prognosticate potential products and/or services this organisation could develop in the short to medium-term.

Airport lounge access: Offer passengers access to exclusive lounges in airports, providing amenities like free Wi-Fi, comfortable seating, complimentary snacks and drinks, and other services to make waiting for flights more pleasant and productive.

Flight upgrades: Offer passengers the ability to upgrade their flights to higher cabin classes, such as first class or business class.

Travel Insurance: Offer passengers the ability to purchase travel insurance to cover any unexpected costs that may arise during their travels.

Specialty food and beverage options: Offer passengers the ability to purchase higher-end food and beverage options on their flights, such as local craft beers or gourmet meals.

Hotel and rental car discounts: Offer passengers the ability to access discounted rates on hotels and rental cars.

Airport transportation services: Offer passengers the ability to book airport transportation services, such as shuttles or car services, to get to and from the airport.

Loyalty rewards program: Offer passengers the ability to earn points, discounts, and rewards for frequent travel with Alaska Air Group.

Potential Synergies

Using our product and portfolio-matching algorithm, we have determined that the following organisations have potential synergies with the company:

1. Boeing: The two companies have a long-standing relationship that dates back to the early days of Alaska Airlines. Boeing provides Alaska Air Group with aircraft, spare parts and maintenance support.
2. American Express: Alaska Air Group is a partner with American Express in the Membership Rewards program, which allows Alaska Air Group customers to earn points for their purchases.
3. Delta Air Lines: Alaska Air Group has a codeshare agreement with Delta Air Lines, allowing passengers to book flights on both airlines under the same ticket.
4. Microsoft: Alaska Air Group has a multi-year agreement with Microsoft to use its Azure cloud services to power its digital strategy.
5. Alaska Native Corporations: Alaska Air Group has partnerships with a number of Alaska Native Corporations to help support their businesses and provide jobs for their members.

Porter's Five Forces

Created by Harvard Business School Professor Michael Porter in 1979, Porter's Five Forces model is designed to help analyse the particular attractiveness of an industry; evaluate investment options; and better assess the competitive environment.

The five forces are as follows:

Competitive rivalry
Supplier power
Buyer power
Threat of substitution
Threat of new entries

The Porters 5 forces for Alaska Air Group are as follows:

1. Competition: Alaska Air Group competes with other airlines in the market for passengers and cargo. The company scores HIGH in this category as it is one of the largest airlines in the world.

2. Substitutes: There are substitutes for air travel, such as driving or taking the train. However, these substitutes are not as convenient or fast as flying, so Alaska Air Group scores WELL in this category.

3. Bargaining power of suppliers: Alaska Air Group has a strong bargaining power with its suppliers. This is because the company is one of the largest airlines in the world and has a lot of clout when it comes to negotiating prices.

4. Bargaining power of buyers: The bargaining power of buyers is relatively LOW. This is because there are not many alternatives to flying when it comes to long-distance travel.

5. Threat of new entrants: The threat of new entrants is relatively LOW. This is because it is a capital-intensive industry and there are many barriers to entry, such as the need for an air operator's certificate.

PESTLE Analysis

This PESTLE analysis is a strategic planning tool that assesses key external factors affecting the organisation, including the following:

Political
Economic
Social
Technological
Legal
Environmental

Each of these factors is analysed to determine their impact on the organisations strategy, objectives, and operations.

By utilising a PESTLE analysis, the organisation can make better decisions and develop strategies to address potential risks and opportunities.

CATWOE Analysis

The CATWOE analysis is used to investigate each stakeholders perspectives in order to enable the business to make informed decisions.

The CATWOE analysis is a problem-solving tool consisting of six elements:

Customers
Actors
Transformation process
World view
Owners
Environmental constraints

We view the CATWOE as being most useful when used in conjunction with other problem-solving tools such as a SWOT analysis.

Customers: Alaska Air Group provides safe, reliable and enjoyable air travel for all customers. The company strives to deliver excellent customer service and maintain the highest standards of safety in all its operations.

Actors: The main actors in Alaska Air Group are the employees, the shareholders, the customers, the suppliers and the regulators. All these actors have a role to play in the success of the company.

Transformation process: The transformation process of Alaska Air Group is based on delivering high-quality services and products to its customers. The company focuses on providing a safe, reliable and enjoyable air travel experience to its customers. The company also strives to maintain the highest standards of safety and to provide excellent customer service.

World view: The world view of Alaska Air Group is that the company is dedicated to providing the highest level of customer service and safety. The company strives to exceed the expectations of its customers and to maintain the highest standards of safety in all its operations.

Owners: The owners of Alaska Air Group are the shareholders and the employees. The shareholders have a vested interest in the success of the company, while the employees are the backbone of the operations and have an important role to play in the company’s success.

Environmental constraints: The environmental constraints for Alaska Air Group are the regulations set by the Federal Aviation Administration and other governmental bodies. The company must comply with these regulations in order to maintain the highest standards of safety and to ensure the safety of its customers.

SWOT Analysis

This SWOT analysis is a strategic planning tool used to assess the strengths, weaknesses, opportunities and threats of the Alaska Air Group business.

When creating this SWOT the team at Platform Executive have taken into consideration the corporate strategy; brand; key financials; the competitive landscape; along with the products and/or services offered.

To offer increased context for future innovation and product development we also consider the historical context for the business and industry; and perceived direction of travel.

Upon researching the company, we have uncovered a number of strategic and operational strengths, weaknesses, opportunities and threats.

Strengths

Below is a list of the strengths we have identified for the business:

1. Alaska Air Group has a strong focus on customer service and satisfaction, which has resulted in high customer loyalty and positive customer feedback.

2. The company has a well-developed and efficient operations network, which has contributed to its consistently strong on-time performance.

3. Alaska Air Group has a modern and fuel-efficient fleet of aircraft, which helps to keep operating costs low.

4. The company has a strong financial position, with a strong credit rating and healthy cash balances.

Opportunities

Below is a list of opportunities we have identified for the business:

1. Increase market share in the western U.S. by expanding Alaska Air Group’s route network and improving customer service standards. This could be accomplished by adding more flights to popular destinations, improving on-time performance, and offering competitive fare prices.

2. Enhance customer loyalty by implementing customer loyalty programs to reward frequent customers and boost loyalty. This could be done by offering rewards such as free flights, discounts, and priority boarding.

3. Improve efficiency of operations by investing in newer aircraft with increased fuel efficiency. This could be done by replacing older aircraft with newer ones, which will reduce fuel costs, improve timeliness, and provide a better overall customer experience.

4. Expand existing partnerships with other airlines and leverage their existing customer base. This could be done by forming alliances with other airlines to share flights and increase the reach of Alaska Air Group’s network. This will also allow customers to access more destinations and earn more frequent flyer miles.

Weaknesses

Below is a list of the weaknesses we have identified for the business:

1. Lack of a strong international presence - With only 8% of its flights departing from outside the US, Alaska Air Group is heavily reliant on the domestic market. This exposes it to greater risks in the event of a sharp economic downturn or other unforeseen event in the US.

2. Over-reliance on Seattle - Alaska Air Group is the largest carrier at Seattle-Tacoma International Airport, accounting for nearly 30% of all flights. This makes the airline particularly vulnerable to any negative developments affecting the airport, such as bad weather, a terrorist attack, or industrial action by airport workers.

3. Limited route network - Alaska Air Group's flight network is relatively limited compared to its major US rivals, meaning that passengers have fewer options when booking flights with the airline. This could make it harder for the airline to compete for business travelers who have more choice when it comes to airlines.

4. High operating costs - Alaska Air Group's operating costs are significantly higher than its major US rivals, which puts it at a competitive disadvantage. This is due in part to the airline's relatively small size, which means it has less negotiating power with suppliers.

Threats

Below is a list of the threats we have identified for the business:

1. Rising labour costs: The Alaska Air Group is facing increasing costs due to labour contracts and rising wages. This is especially true for the airline's attendants, pilots, and mechanics, who have bargaining power and the ability to negotiate higher salaries.

2. Competition from low-cost carriers: With the increased number of low-cost carriers entering the market, Alaska Air Group is facing increased competition and a decrease in market share. This is especially true in the transcontinental markets, where other airlines are able to offer lower fares.

3. Fuel costs: Fuel costs are a major expense for airlines, and Alaska Air Group is no exception. With the price of fuel increasing, the airline is facing increased operational costs due to the need to purchase more fuel.

4. Technological advancements: Technological advancements have made it easier for passengers to book flights online, bypassing Alaska Air Group's ticket agents. This has led to a decrease in revenue for the airline, as customers are choosing to book directly on other sites instead.

5C Analysis

The 5C Analysis is a marketing framework that can be used to provide insight into the key drivers of success, as well as the risk exposure to various environmental factors.

This (concise) 5C analysis examines the external and internal environment for Alaska Air Group. It includes analysing the company's customers, competitors, collaborators, context, and capabilities. We have produced this short analysis to identify potential opportunities and threats to Alaska Air Group, as well as areas where the company needs to improve its operations or strategy.

Company: Alaska Air Group is an American airline holding company operating under the Alaska Airlines and Horizon Air brands. It is one of the largest airlines in the United States, with flights throughout North America, Central America, and the Caribbean.

Collaborators: Alaska Air Group partners with various companies to provide services for its customers. These partners include multiple airlines, hotels, rental car companies, and travel agencies.

Customers: Alaska Air Group's customers are primarily members of its frequent flyer program, Mileage Plan, as well as leisure and business travelers.

Competitors: Alaska Air Group's main competitors are Delta Air Lines, American Airlines, United Airlines, and Southwest Airlines.

Content: Alaska Air Group offers a number of services and products such as air tickets, baggage allowance, seat selection, in-flight entertainment, and meal options. It also provides a variety of amenities such as credit cards, loyalty programs, online check-in, and vacation packages. Additionally, the company provides customer service through its website, mobile app, and customer service centers.

MOST Analysis

The MOST analysis framework is commonly used to identify an organisation's strategic goals, assess its strengths and weaknesses, and develop a plan to achieve its objectives. This analysis helps organisations to focus on what they want to achieve and how to achieve it, while also identifying potential roadblocks or obstacles that may arise along the way.

Mission
Objectives
Strategy
Tactics

We have created this analysis from a 3rd person perspective.

Innovation Scorecard

As part of our research and analysis activity, the team at Platform Executive assesses and then benchmarks businesses and the industry verticals in which they operate using a proprietary scoring mechanism.

First, we allocate a score of A-E for the industry vertical, gauged on the key organisations operating within the space; and then score the individual business using a 1-5 score.

A score of D-E within an industry means that it is potentially ripe to be disrupted by a new entrant into the marketplace; and/or vulnerable to technological change.

Likewise, a high score of 4-5 for the company in question indicates that in the view of the analysis team it lags behind notable businesses in terms of innovation and product pipeline.

Below is a guide to each score:

Industry score:

A	The industry is amongst the most innovative; with the leading players all driving the sector forward. Example industry: PaaS
B	The industry and its leading players have a good track record of innovation; and can quickly react to change. Example industry: Pharmaceutical
C	Companies operating within the sector have adequate levels of innovation; and engage in R&D activities when appropriate. Example industry: FMCG
D	Businesses operating in the industry do not invest enough time and resource into innovation. The sector is stagnant and a good candidate for disruption. Example industry: Retail Banking
E	The major players in the sector seem to lack suitable product development roadmaps; and as a result the sector is highly vulnerable to industry change. Example industry: Publishing

Company score:

1	The business is amongst the leading players in terms innovation and product pipeline. This will fulfil and reinforce the operations of the business in the medium to long-term.
2	The business has a good track record of innovation, in terms of its products and/or its business model. It is therefore more likely to be able to react and adapt to any changes to the industry.
3	The business is deemed to have an adequate innovation plan, build on research and development and sustainability where appropriate. The business has a product development strategy.
4	The business needs to invest more resource and/or intellectual capital in product development, pipelines and/or its business model. The business is at risk of stagnation.
5	The business seems to lack a suitable product development roadmap; and as a result is vulnerable to any notable industry change and/or new entrants in the marketplace.

The team at Platform Executive has judged Alaska Air Group as having an innovation score of D2.

Appendices

The appendices section of this report contains supplementary information that the team at Platform Executive deems helpful in providing a more comprehensive understanding of the report's contents.

This information is not considered an essential part of the study but serves as a useful supplement to the main text.

Methodology

This study on Alaska Air Group forms part of our series of competitive intelligence reports, which focuses on 10,000 of the largest corporates.

The information and data included are updated on a timely schedule to ensure that our Premium members receive the most up to date information .

The report is based on information and learning from the following sources:

Corporate websites
Proprietary research databases
SEC Filings
Corporate press releases
News articles
Financial data API's
Product-matching algorithm

Further Information

Premium members: If you cannot find the desired information or data set for the business you are researching then please reach out to our research and analysis team. We can tailor reports to meet your requiremnents, with a fast turnaround time.

If you require a bespoke study on a particular industry vertical, or marketplace we may also be able to help.

Disclaimer

Reproduction of the content produced in this report is prohibited without the prior permission of the publisher, Platform Executive Pty Ltd.

The facts of this report have been gathered in good faith from both primary and secondary sources. It is believed to be correct at the time of publication, but cannot be guaranteed. As such Platform Executive can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

Changelog

Premium members: To request a priority update to this report, please contact us. Our standard turnaround time is normally 48 hours.

The changelog for this report can be found below, complete with the next scheduled update:

v1.1: Initial load of report
Date: 1st March 2023

Key Financials added (BETA)
Date: 17th March 2023

Next scheduled update: 13th June 2023

Industry Keywords

Related keywords:

Aircraft Airline Aviation Flight

Newell Brands

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