Exclusive: Despite pandemic, Alaska Air adds Boise routes. CEO explains why
When Alaska Airlines CEO Ben Minicucci spoke with some of the company’s 700 Boise workers on Wednesday, they jokingly told him where they wanted to go: Las Vegas.
The Seattle-based airline isn’t looking to fly from Boise to Sin City anytime soon, Minicucci, 53, said, but Alaska Air is still looking for new destinations to take people in and out of Idaho.
“There is an analytical way of looking at markets, so we’ll come here and we’ll look at our top markets, we’ll look at the people that want to travel to some of these markets, and as Boise’s growing, take a real analytical approach in which markets that we should look at adding,” he said.
Just this month, Alaska Air began daily nonstop flights to Chicago O’Hare and Austin, Texas. On Aug. 18, service will begin between Boise and Pullman-Moscow. And then on Nov. 19, seasonal service to Phoenix will commence through April 18, 2022.
“We’re excited about what we’re doing with Boise,” Minicucci told the Idaho Statesman in an exclusive interview at the Boise Airport. “This winter we’re going to have 30 flights a day. It’s going to be one of our bigger stations in Alaska Air Group.”
Boise ranks eighth — by number of departures — among the more than 115 cities served by Alaska Airlines, company spokesman Ray Lane said by email. Seattle, Anchorage and San Francisco are the company’s main hubs. Alaska Air, which began flights from Boise in 1983, has nearly 1,200 flights a day while serving more than 45 million customers a year
Minicucci — who became CEO on March 31 after working for the company for 17 years — and seven other company executives flew to Boise on Wednesday for three days of meetings. They leave Seattle once or twice a year to hold executive meetings in other cities served by the airline.
Employees told Minicucci that it is becoming increasingly difficult to afford a house in the Treasure Valley. In May, the median price for homes sold in Ada County hit a record $523,250, according to the Intermountain Multiple Listing Service. That’s 45% higher than the $360,000 median recorded 12 months earlier.
In Seattle, the median price hit a record $737,800 in May, 26% higher than a year earlier.
“In the last 18 months of this pandemic, this town has been booming,” Minicucci said. “People have discovered this little gem of a town. I’m sorry about what it’s done to your cost of housing.”
He said the company needs to look at how conditions have changed over the past couple of years, with rising costs and more passengers flying with the company from Boise and back.
“People want to come here, but they also want to go and visit places,” he said. “That’s exciting for us, because you know we’re the largest airline here, and we feel like we’re part of the community here. Growing Boise’s definitely on our road map.”
Flights to Austin and back started on June 17.
“It’s been great right out of the gates,” he said. “Sometimes it takes time for a market to develop.”
Minicucci praised Alaska Airlines’ relationship with the Boise Airport and the Boise Metro Chamber of Commerce. He said Bill Connors, the chamber’s CEO, has worked to determine cities visited by Boise businesses that could benefit from an Alaska Air flight.
He said Alaska Airlines’ new partnership with American Airlines will give Alaska customers flying to Chicago, where American has a major hub, more options for reaching other cities.
Last week, American canceled hundreds of flights across the nation because of a shortage of pilots and other personnel. Thunderstorms at several major airports caused additional flights to be canceled.
Alaska Airlines has mostly avoided worker shortages among its most skilled staff, Minicucci said. The company downsized during the pandemic but offered workers incentives that allowed them to be recalled when air traffic began picking up.
“We were able to bring people back fairly quickly and not having to do a bunch of training,” he said.
It’s been harder, though, to find people for entry-level jobs, such as gate agents and baggage loaders. That’s most acute in Seattle, he said.
400 reservation agents work in Boise
It’s been easier to attract new workers in Boise, where 400 of the company’s reservations agents work. Boise has the largest of Alaska’s reservations centers.
“But our people did tell us that with a lot of other companies hiring here, that it’s getting more competitive, and they’ve urged us to look at the market again,” he said.
Business travelers make up about 30% of Alaska Airlines’ customer base, with the other 70% traveling for pleasure. With so many companies conducting virtual meetings during the pandemic, there are questions whether business travel will return to prepandemic levels.
“I do think there’s going to be a bit of a structural change with virtual meetings where maybe people won’t go to the East Coast for a two-hour meeting,” Minicucci said. “Those might go away, to be honest.”
While it may be easier to maintain longstanding relationships with virtual meetings, developing new ones or working to land large contracts will still require face-to-face meetings, he said.
“We want our big suppliers to come see us,” he said. “I want to make sure you’re committed, I want to see the executives of that company. And so, I think you’ll see a rebound in the fourth quarter” of 2021.
Alaska Air cut service in pandemic, now gradually restores it
Parent company Alaska Air Group Inc. reported a first-quarter net loss in April of $131 million. A year earlier, the first-quarter loss was $232 million. The company worked to cut its “cash burn,” Minicucci said, by cutting back about 50% of its operations.
Leisure demand is nearly at prepandemic levels, while Alaska Airlines has recovered about 30% of its business traffic. By the fourth quarter, it’s projected to reach 50%, Minicucci said.
While Hawaii still requires travelers to obtain a negative COVID-19 test within 72 hours of their final flight to avoid a mandatory 10-day quarantine, Alaska Air is seeing high passenger numbers there.
“Hawaii has been remarkably strong for us,” he said. “We put most of our capacity back to Hawaii from the West Coast.”
Alaska has also been a popular travel destination, he said.
Boise also played a role in Alaska’s recovery as the company’s initial focus was on the Pacific Northwest, he said.
“We saw potential in Boise,” he said. “We saw the movement of people migrating to smaller cities, people wanting to go to different places more in the short term, maybe more leisure destinations.”
California, where COVID-19 restrictions recently were loosened, will be the company’s final push.
“We have plans to build up back to 100% over the next six to 12 months,” Minicucci said. “We’re going to bring California back up, because California was probably the slowest to come out of this thing.”
This story was originally published June 24, 2021 at 4:00 AM.
