Alaska Airlines is considered as one of the best airlines in the world few years ago and was thought that it would overtake other airlines in the race of supremacy. However, the problems at the company have restricted its growth, and Alaska Airlines have not managed to achieve its potential. The most disturbing problem that the company is facing is its inability to use new and advanced technology. As a result of which, the company has not been able to exploit the benefits of news technology. The company has to face high costs in mechanical repairs and employee tracking. There are also incidents when the in air flight have experienced certain problems relating to the maintenance, and this meant the company has had a bad reputation in the mind of air travelers. Another strategic issue that arises from this is that the company has not been able to minimize its costs and have become irrelevant and cost uncompetitive in the market. As a result of these high costs the company is experiencing extremely high costs as compared to the other players in the industry. They have to be passed on to the customers. As a result, the customers end up paying a higher price than what competitors are charging. It puts off customer from using Alaska Airlines. There is a basic demand and supply rules that when price increase, demand moves down the curve. It is what is happening with Alaska Airlines. It is fast losing its customer base and working below efficiency. As there are many factors that hindering the company’s ability to work at an efficient level. They are proving a nuisance for the company’s performance, financial health and goodwill levels that the company first enjoyed. All of this has resulted in the overall poor performance of Alaska Airlines which has failed to live up to its reputation and potential that was considered by the investors in this esteemed air travel company.
Another problem for Alaska is its failure to have any Airline Alliance. It has again proved to be very costly for Alaska Airlines. Having alliance in the air travel business is of vital importance. It helps the company reduce its refilling costs. It is of particular importance those wells thought out alliances are maintained by an air travel company to keep its costs low. The problem is that whenever a company’s plane lands at the airport, the aviation authority of that company starts charging them a levy for using the airport. If the company has an alliance with another local airline of that area, then these costs are significantly low, and the company enjoys great cost saving benefits by using the airports around world. It is what is missing from Alaska Airlines. They need to work on the problem and should try to make as much alliances as possible to enjoy the cost saving benefits in the areas of their operation and transfer this low price to the customer to boost the plummeting demand that the company is experience. This may lead to the company doing well financially, and its goodwill levels will be improved, and it will enjoy good reputation and brand image in the eyes of the customers. It is vital for the company to survive in the today’s competitive environment and at the same time remain profitable. It benefits the owners, shareholders, employees and other stakeholders that are directly related to the success of the company. Once the company will be profitable, other areas of discontent, disharmony and decline will automatically be answered with the superior financial health of the company and wisdom of the management.
References:
Avila, J., & Francis, E. (2012, August 8). Alaska Air Scare Due to Mechanical Malfunction.
Retrieved October 19, 2014.
Daft, R. (1995). Management. The Dryden Publishing: NY
