From two competing charter services formed in Anchorage, Alaska, in 1932, Alaska Airlines has grown into the fifth-largest airline in the United States. It began operating under the name Alaska Airlines in 1944 and was first known as a cargo carrier. Passenger traffic increased in the 1960s and 1970s, but the airline remained a small one that primarily served Alaska. Deregulation of the airline industry in 1978 was a boon for the company and it has since enjoyed substantial growth, first expanding into a West Coast airline and then a national and international one.
Beginnings
Alaska Airlines' beginnings date to 1932, when Linious "Mac" McGee (1897-1970) and his partner, Harvey Barnhill, began advertising charter flights in the Anchorage Daily Times that flew between Anchorage and Bristol Bay in a single, three-seat Stinson airplane. McGee took over the business later that year, renamed it McGee Airways, and over the next two years increased his fleet to seven aircraft. However, given Alaska's low population, the seasonal nature of the Alaskan economy, and a small customer base, the fledgling airline was constantly on the financial edge.
In April 1932, three months after McGee and Barnhill ran their first newspaper ad, Star Air Service was formed in Anchorage by three pilots, Steve Mills, Charlie Ruttan, and Jack Waterworth. The trio offered flight instruction and charter service from Anchorage and had some success, though they too were limited by a small customer base. McGee sold his business to Star Air Service in 1934. The sale came with one condition: If he wasn't paid on time, he could return to manage the airline until he was paid off. It wasn't long before he was back. By 1936, Star Air Service was grossing $190,000 a year (equal to approximately $3.85 million in 2022).
In 1937 McGee sold Star Air Service to a corporation put together by one of his former pilots, and the airline was renamed Star Air Lines (Star), which not only included McGee's company but other airlines that Star had acquired. About the same time, the carrier began changing its operations toward more regularly scheduled service. It purchased additional small local airlines during the early 1940s, and acquired its first multi-engine airplane, a Lockheed Lodestar, in 1943. Star changed its name to Alaska Star Airlines in 1942, and in turn, Alaska Star Airlines changed its name to Alaska Airlines in 1944.
Boom and Bust
Alaska Airlines embarked on a period of aggressive expansion after World War II ended in 1945, increasing its fleet and growing its charter operations worldwide. During the 1948-1949 Berlin Airlift, the carrier flew 87 flights into Germany to deliver cargo to West Berlin as part of a U.S. and British response to the Soviet Union's blockade of land routes into the city. The airline also participated in Operation Wings of Eagles (sometimes called Operation Magic Carpet) in 1949, a massive airlift of more than 40,000 Yemenite Jews from Yemen to Israel. The operation was risky. Aside from natural obstacles such as sandstorms, the planes risked being shot down if they flew too close to Arab territory and had to evade hostile fire more than once. Alaska completed its missions with no fatalities.
By 1949, the young company was flying high as the world's largest charter airline. However, that year the Civil Aeronautics Board (CAB), which regulated the aviation industry, restricted its operations to Alaska, with the exception of eight trips a year between Alaska and the lower 48 states. This did not last long. The airline was already informally offering service to Seattle, but despite its best efforts these flights had not been approved by the CAB. Alaska finally prevailed in 1951 when the CAB granted approval to fly from Anchorage and Fairbanks to Seattle and Portland.
Much of the 1950s were marked by austerity for Alaska Airlines. The reduction in its cargo business and various financial issues restricted growth, but as the 1960s began the times were changing. Passenger travel increased as commercial jet flights became available in the early 1960s, and to meet the demand the airline began an aggressive and memorable marketing campaign. Stewardesses sometimes dressed in theme costumes, and safety instructions were read in rhymes:
"A life vest neat is beneath each seat.
They're stored so we won't lose 'em.
Now fix your eyes on the stewardies.
They'll show you how to use 'em"
("Alaska Airlines History by Decade").
Alaska grew in other ways during the 1960s. By the early 1960s the company had purchased its first pressurized airplane, a DC-6, that allowed pilots to fly above bad weather instead of around it or being forced to fly through it, and it bought its first passenger jet, a Convair 880, in 1961. During the 1960s Alaska became the first carrier to fly the Lockheed Hercules, a versatile aircraft whose C-130 version is a favorite with the military. The powerful planes hauled drilling rigs to Alaska's North Slope after the discovery of the enormous Prudhoe Bay oil field was announced in 1968, and later flew similar equipment to Ecuador in western South America. The company expanded its routes in Alaska and merged with two southeastern Alaska airlines during the late 1960s, and in 1966 it began flying a new airplane, the Boeing 727, which would serve the carrier well for the next quarter century.
In 1970, Alaska introduced charter service to Siberia and flew more than two dozen flights to Russia's Far East for the next two years. In keeping with its penchant for stewardesses dressed in theme costumes as a marketing ploy, the airline inaugurated its "Golden Samovar" service, complete with flight attendants wearing Russian Cossack apparel and serving drinks from samovars, large metal urns often used in Russia to brew tea. But this was a distraction from a growing problem for the company. Its rapid expansion during the 1960s had not been matched by a corresponding increase in revenues. The carrier's debt increased while its service decreased, and its cargo business slowed, exacerbating the problem. The September 1971 crash of Alaska Flight 1866 while on approach to the Juneau airport, killing 111 (the airline's worst crash in its history, and the worst air disaster in the state's history), was a serious setback.
By 1972 the airline's financial situation was growing increasingly precarious, and that year Alaska's board replaced the company's president, Charles Willis, who had spearheaded its expansion for 15 years. He was succeeded by Ron Cosgrave, who rebranded the airline and introduced the eskimo that has graced the tails of Alaska's airplanes since. (The original eskimo was rather stern-faced, but it was replaced in 1976 with the smiley-face version that remains in use today.) Under Cosgrave, Alaska focused on its passenger service, which had grown so undependable with missed schedules and poor service that the airline had earned the nickname "Elastic Airlines." It worked -- the airline turned its first profit in some years in 1973, and from there it enjoyed 19 profitable years in a row.
Rapid Growth
The Airline Deregulation Act of 1978 removed government control over fares, routes, and market entry of new airlines. Alaska welcomed the change. Though it had recovered from its financial woes of the early 1970s, in 1978 Alaska Airlines had just 10 aircraft in its fleet and served 11 cities -- 10 in Alaska, and Seattle. Deregulation allowed the company to grow, and expansion quickly followed. In 1979 Alaska began service to Portland and San Francisco, and during the first half of the 1980s it added flights to Spokane, Tucson, Southern California, and several other western cities. In 1988 Alaska began offering flights to Mazatlan and Puerto Vallarta in Mexico, and in 1989 it inaugurated service to Vancouver and Victoria, the carrier's first foray into Canada. By the end of the 1980s the airline served 30 cities in six western states outside of Alaska, and 70 percent of its passengers flew south of Seattle.
As part of this expansion, the Alaska Air Group was formed in 1985 to serve as a holding company for Alaska Airlines. The following year the company bought Horizon Air, which had its beginning in Seattle in 1981 as a small local airline serving Seattle, Yakima, and Pasco. The scrappy little airline grew rapidly, and its growth and dependable service were soon noticed by other carriers, including Alaska. Though a part of Alaska, Horizon maintained its separate brand until 2011.
The 1990s were marked by increased competition from low-cost carriers, leading to Alaska's first loss in 20 years in 1992. The airline implemented aggressive cost-cutting measures, which included reducing unprofitable routes and downsizing in-flight meals. The turnaround was swift. Aided by an increase in its cargo operations, the company was again turning a profit by 1994 and was serving its passengers with a new motto: "For the same price, you just get more" ("Alaska Airlines History by Decade").
During the early 1990s Alaska phased out its Boeing 727s and replaced them with more fuel-efficient MD-80s and Boeing 737s, further helping the company reduce operating costs. Increasing technological advances also made the planes safer. In 1989 Alaska became the first airline to use a head-up display in its aircraft, which generates an image directly in the pilots' field of vision that enables them to remain focused on what is in front of them rather than requiring a look down to read instruments. In 1996 the airline flew the first commercial flight using global-positioning technology, which was able to far more accurately pinpoint an airplane's location than had previously been possible. Later in the 1990s, the carrier began installing ground proximity warning systems in its aircraft.
Alaska added a route to Toronto in 1991, its first destination east of the Rocky Mountains, but maintained the route for only a year. A bigger change came in 1991 when it added summer service to Khabarovsk and Magadan in Russia's Far East, expanding to year-round service in 1994. Flights were once a week, twice weekly during the summer. In 1993 the airline added Vladivostok to its Russian destinations, Petropavlovsk-Kamchatsky in 1995, and Yuzhno-Sakhalinsk in 1997. However, the 1998 Russian financial crisis cut traffic so dramatically that Alaska discontinued the flights that autumn.
Tragedy struck as the twenty-first century began. On January 31, 2000, Alaska Airlines Flight 261, enroute from Puerto Vallarta to San Francisco and Seattle, crashed into the Pacific Ocean off the coast near Los Angeles after a jackscrew failed, killing all 88 passengers and crew. The pilots struggled to maintain control of the plane for more than 10 minutes before it dove into the ocean, and their battle to save it only made the story sadder. The crash was all the more surprising because the airline has generally maintained an exemplary safety record.
Despite its Russian ventures during the 1990s, Alaska remained known as primarily a West Coast airline as the new century got underway. This changed during the 2000s, when the carrier dramatically expanded its routes and morphed into the airline that most of its customers recognize today. In 2001, Alaska again ventured east of the Rocky Mountains when it began offering service to Ronald Reagan Washington National Airport in Arlington, Virginia. The airline added service to Newark the following year, while Orlando became a destination in 2003. Further routes were added over the ensuing years, and Alaska closed the decade out by adding service to Atlanta in 2009.
Alaska also phased out its fleet of MD-80s during the 2000s and replaced them with more Boeing 737s. It added more technological advances on these planes as well, benefitting both passengers and pilots. In-flight wifi arrived in 2010, and in 2011 Alaska became the first major domestic airline to issue iPads to its pilots, replacing the cumbersome paperwork that pilots had previously had to carry. In 2014, Alaska implemented its first test of biometrics (a fingerprint scan) in its airport lounges. This proved so successful that in the spring of 2022 Alaska began testing facial recognition scanning at the San Jose airport. Passengers traveling to select destinations in Mexico were offered the option of a quick scan instead of being required to provide their passport and boarding pass at the gate.
Alaska Airlines Today
In 2016, Alaska Airlines announced the formation of a new subsidiary -- McGee Air Services (McGee), a name that harkened back to the company's earliest beginnings. McGee, based in Renton, provides vendor services to Alaska, such as airplane cleaning, baggage handling, and wheelchair services. The following week Alaska announced the acquisition of Virgin America airlines, founded by British entrepreneur Richard Branson (b. 1950). With the acquisition, Alaska became the fifth-largest airline in the country, with more than 275 aircraft in its fleet flying 1,200 flights daily.
Alaska enjoyed increasing profitability during the late 2010s, and the company reported record sales and revenues of $8.78 billion in 2019. The onset of the COVID pandemic in March 2020 and corresponding drop in travel resulted in a nearly 60 percent decline in sales and revenues that year, and the company was forced to lay off more than 8 percent of its work force. The airline recovered to some extent in 2021, posting sales and revenues of $6.18 billion. However, in the spring of 2022 the carrier, along with many of its competitors, was still struggling to overcome the effects of the pandemic. Continuing COVID outbreaks led to a shortage of pilots, which resulted in hundreds of flight cancellations, some at the last minute. Alaska temporarily trimmed its schedule that spring to try to remedy the problem and to catch up on pilot training.
As of 2021, Alaska flew 1,200 daily departures to 115 destinations. The carrier served 37 states, and it flew to Canada, Mexico, Costa Rica, and Belize. It maintained hubs in Anchorage, Los Angeles, Portland, San Francisco, and Seattle, with Seattle representing the company's primary hub and headquarters. The airline boasted nearly 320 aircraft in its fleet, almost all of them Boeing planes, as well as a few Airbuses which were left over from its acquisition of Virgin. In 2021 Alaska joined oneworld, a global alliance of 14 airlines flying to 1,000 destinations in more than 170 countries and territories, expanding the airline's reach even further.
