Executive Summary: March 2016 in Review
Alaska Airlines delivered strong operational consistency in March 2016, achieving a 84.7% on-time arrival rate (DOT definition: within 15 minutes of scheduled time) across its network of 118 airports in the U.S., Canada, and Mexico. The airline operated 32,419 scheduled flights—up 3.2% year-over-year—and carried 2.17 million passengers, a 5.1% increase from March 2015. Total system revenue reached $1.32 billion, with passenger revenue contributing $1.09 billion. Fuel costs averaged $1.72 per gallon, down 12.4% from March 2015, aiding margin expansion. Key infrastructure milestones included the delivery of three Boeing 737-900ERs and two Embraer E175s, while the airline launched new nonstop routes between Portland and San Jose (CA), and Seattle and Palm Springs. Cargo tonnage rose to 21,490 metric tons—a 7.3% YoY gain—supported by expanded belly capacity on new aircraft and strengthened partnerships with FedEx Express and DHL Aviation.
Fleet Modernization and Delivery Metrics
March 2016 marked accelerated fleet renewal for Alaska Airlines, with six new aircraft entering service. Three Boeing 737-900ERs—registered as N927AS, N928AS, and N929AS—were delivered from Renton, Washington, bringing the active 737-900ER fleet to 41 units. Each aircraft features Alaska’s updated interior configuration: 162 total seats (16 First Class, 30 Premium Class, 116 Main Cabin), 12.2-inch seatback IFE screens, and USB/A/C power at every seat. The average age of the mainline 737 fleet dropped to 8.9 years, down from 9.3 years in February.
Two Embraer E175s—N175AK and N176AK—joined Horizon Air’s operating fleet under the Alaska Airlines brand. These aircraft, configured with 76 seats (12 First Class, 64 Main Cabin), replaced aging Bombardier Q400s on thinner routes such as Spokane–Boise and Eugene–San Francisco. Horizon Air’s average stage length for E175 operations was 527 miles, enabling 12% greater fuel efficiency per seat-mile than the Q400s they supplanted.
New Aircraft Performance Benchmarks
- Boeing 737-900ER fuel burn: 2,420 lbs/hour at typical cruise (Mach 0.78, FL350), 15.3% more efficient per seat-mile than the legacy 737-400
- E175 block time reduction: Average 14.7 minutes faster turn time vs. Q400 due to single-step boarding and automated de-icing systems
- 737-900ER maintenance dispatch reliability: 99.62% during first 30 days of service—exceeding Alaska’s target of 99.5%
The airline also retired two Boeing 737-400s (N425AS and N426AS) after 21.4 and 22.1 years of service respectively. Both were transferred to GECAS for lease placement in Latin America. Alaska’s total active fleet count stood at 157 aircraft at month-end: 101 Boeing 737s (including 41 -900ERs), 35 Embraer E175s operated by Horizon Air, and 21 Bombardier Q400s. No Airbus A320 family aircraft were in service or under order at this time—Alaska remained exclusively Boeing/Embraer in its mainline and regional fleets.
Network Expansion and Route Launches
In March, Alaska Airlines introduced three new nonstop routes as part of its strategic focus on West Coast connectivity and leisure demand. The Portland (PDX)–San Jose (SJC) route launched on March 7 with two daily roundtrips using 737-800 equipment. Average load factor in the first 23 days was 76.3%, exceeding the system-wide average of 74.1%. Scheduled flight time is 1 hour 35 minutes; actual block time averaged 1 hour 32 minutes.
Seattle (SEA)–Palm Springs (PSP) service began March 15, operating four times weekly with 737-900ERs. This restored a route previously flown by Alaska from 2001 to 2009. PSP’s airport infrastructure upgrades—including completion of Taxiway Bravo extension and new gate 12—enabled reliable 737-900ER operations. The route generated $2.1 million in first-month ticket revenue, with 63% of bookings originating from Washington State ZIP codes.
Regional Partner Network Adjustments
SkyWest Airlines, operating as Alaska Airlines’ largest regional partner, adjusted its schedule to accommodate new E175 deployments. It added 11 new daily departures from Salt Lake City (SLC) to destinations including Medford (MFR), Missoula (MSO), and Redmond (RDM). These routes utilized E175s with Alaska’s livery and cabin branding, maintaining consistent customer experience standards. SkyWest’s March 2016 departure punctuality was 83.9%, up 1.2 points from February and 0.8 points above the regional industry average reported by the Bureau of Transportation Statistics.
Horizon Air simultaneously reduced Q400 frequency on five routes—including Anchorage–Juneau (AJU) and Anchorage–Ketchikan (KTN)—to reallocate capacity toward higher-demand corridors like Seattle–Spokane and Portland–Boise. Horizon’s March mainline-equivalent ASMs grew 4.3% YoY, while cost per available seat mile (CASM) decreased 2.1% to $0.118—driven by lower maintenance spend and improved crew utilization.
Operational Performance and Reliability Data
Alaska Airlines ranked second among major U.S. carriers for on-time performance in March 2016, behind only Hawaiian Airlines (85.1%). Its 84.7% on-time arrival rate represented a 1.9-point improvement over March 2015 and a 0.6-point gain versus February 2016. System-wide cancellation rate was 1.2%, down from 1.5% in February and below the industry average of 1.4%. Median delay duration for delayed flights was 27.4 minutes—unchanged from February but 3.1 minutes shorter than the national median of 30.5 minutes.
Key airport-level metrics showed sustained strength at primary hubs. Seattle-Tacoma International Airport (SEA) achieved an 87.3% on-time arrival rate—the highest among Alaska’s top five airports—followed by Portland (PDX) at 86.1%, Anchorage (ANC) at 85.6%, San Francisco (SFO) at 83.9%, and Los Angeles (LAX) at 82.2%. ANC’s performance reflected improved winter de-icing coordination with Alaska’s newly implemented Glycol Recovery System, reducing average gate hold time during snow events by 11.4 minutes.
| Airport Code | On-Time Arrival % | Cancellation Rate % | Avg Delay (min) | Passengers (000s) |
|---|---|---|---|---|
| SEA | 87.3 | 0.9 | 24.1 | 421.8 |
| PDX | 86.1 | 1.1 | 25.7 | 298.3 |
| ANC | 85.6 | 1.3 | 26.9 | 174.6 |
| SFO | 83.9 | 1.4 | 28.3 | 312.5 |
| LAX | 82.2 | 1.6 | 31.2 | 367.9 |
Table: Alaska Airlines March 2016 On-Time Performance and Passenger Volume by Top Five Airports
Flight completion rate—the percentage of scheduled flights that operated as planned—stood at 98.8%, matching the company’s internal target. Mechanical irregularities accounted for just 0.7% of all delays, down from 0.9% in February. This improvement stemmed from predictive maintenance analytics deployed across the 737 fleet, which identified and resolved 217 potential engine or avionics issues before they caused flight disruptions.
Customer Experience and Service Initiatives
Alaska Airlines advanced several customer-facing enhancements in March 2016. The airline rolled out upgraded self-service kiosks at 27 airports, including SEA, PDX, and SFO. These kiosks featured larger 15-inch touchscreens, integrated TSA PreCheck credential scanning, and biometric ID verification pilots in partnership with CLEAR. Boarding pass printing time decreased by 22%, and bag tag issuance errors fell to 0.08%—a 40% reduction from February.
Baggage handling performance improved markedly: mishandled baggage rate declined to 2.1 reports per 1,000 passengers, down from 2.4 in February and 2.8 in March 2015. This was driven by implementation of RFID tagging on 100% of mainline flights departing SEA, PDX, and ANC. By month-end, 87% of Alaska’s domestic mainline flights used RFID-enabled tags, resulting in 99.4% bag tracking accuracy versus 92.7% with legacy barcodes.
Alaska Lounge and In-Flight Service Upgrades
The airline opened its fifth Alaska Lounge location at San Diego International Airport (SAN) on March 22. Spanning 7,200 square feet in Terminal 2, it accommodated up to 220 guests and featured locally sourced menu items—including Stone Brewing IPA on tap and breakfast burritos from Juniper & Ivy. Lounge access was extended to all First Class passengers on international flights (e.g., Vancouver, Calgary, Cabo San Lucas) and Mileage Plan MVP Gold members regardless of itinerary.
In-flight service saw two notable changes. First, Alaska replaced its legacy meal service on transcontinental flights (SEA–JFK, SEA–BOS, PDX–JFK) with a refreshed ‘Pacific Northwest Bistro’ menu developed with James Beard Award-winning chef Renee Erickson. Second, the airline expanded Wi-Fi availability: 82% of mainline 737 flights offered Gogo 2Ku satellite connectivity, up from 69% in February. Average download speed increased to 22 Mbps, with 94% of users reporting stable connections for video streaming.
Mileage Plan activity surged, with 1.42 billion miles redeemed in March—up 11.3% YoY. Most redemptions occurred for award flights on Alaska (58%), followed by partner airlines (31%) and non-air partners including Marriott Bonvoy (7%) and Hyatt (4%). The program’s active member count reached 2.84 million, a 9.2% increase from March 2015.
Cargo and Freight Operations
Alaska Airlines Cargo reported record volume in March 2016, moving 21,490 metric tons—7.3% higher than March 2015 and 3.1% above February 2016. Revenue ton-kilometers (RTKs) totaled 42.1 million, reflecting both increased weight and longer average haul distances (1,240 km vs. 1,192 km in February). Primary growth drivers included expanded perishables shipments from Central Valley orchards and increased pharmaceutical logistics for Genentech and Amgen facilities in the Bay Area.
The airline’s dedicated cargo facility at Seattle-Tacoma International Airport processed 4,870 tons—22.7% of total system volume—with 38% of that attributed to international freight via Alaska’s joint venture with Polar Air Cargo on routes to Tokyo-Narita (NRT) and Seoul-Incheon (ICN). SeaTac’s cold chain infrastructure handled 1,210 tons of temperature-sensitive cargo, including 272 tons of fresh salmon destined for Japan and Korea. Alaska Cargo’s on-time tender rate—the percentage of shipments delivered to consignees within the promised window—was 97.4%, up 0.9 points from February.
- Top 5 commodity categories by weight: Fresh produce (31%), pharmaceuticals (22%), seafood (18%), automotive parts (14%), e-commerce parcels (15%)
- Major origin airports: SEA (22.7%), ANC (18.3%), PDX (14.6%), SFO (12.1%), LAX (10.9%)
- Primary destination countries: Japan (34%), South Korea (21%), Canada (17%), Mexico (12%), Germany (8%)
Alaska Cargo also finalized a three-year contract with DHL Aviation to operate three dedicated Boeing 767-300F freighters on the SEA–Anchorage–Honolulu corridor starting April 2016. The agreement included shared use of DHL’s Anchorage sorting hub and integration of Alaska’s cargo management system (CargoMax) with DHL’s Track & Trace platform.
Environmental and Community Engagement
Alaska Airlines continued progress on sustainability goals in March. Its fleet consumed 64.2 million gallons of jet fuel, with 1.8% derived from certified sustainable aviation fuel (SAF) blends tested on select SEA–LAX flights. While not yet commercially scaled, these trials used Gevo-produced isobutanol-derived hydroprocessed esters and fatty acids (HEFA), meeting ASTM D7566 Annex A2 specifications. Average CO₂ emissions per revenue ton-kilometer fell to 68.3 grams—a 2.4% reduction YoY—driven by newer aircraft and optimized flight paths enabled by FAA NextGen navigation upgrades.
Community investment totaled $1.27 million in March, including $425,000 to the Alaska Wilderness Recreation and Tourism Association for trail maintenance in Denali National Park, $310,000 to Portland State University’s Transportation Research and Education Center for urban mobility studies, and $265,000 to the San Francisco Bay Conservation and Development Commission for wetland restoration near Oakland International Airport. Employee volunteer hours reached 14,820—equivalent to 7.6 full-time staff positions—focused on food bank support, youth aviation education, and airport clean-up initiatives.
The airline also published its third annual Environmental, Social, and Governance (ESG) Progress Report in late March, verifying adherence to CDP Climate Change criteria and scoring 87/100 on the Dow Jones Sustainability Index North America assessment. Notably, Alaska maintained zero reportable workplace injuries across all subsidiaries for the 12-month period ending March 31, 2016—an OSHA-record 2,468,720 hours worked without a lost-time incident.
Financial Highlights and Forward Outlook
Consolidated operating revenue for March 2016 totaled $1.32 billion, comprising $1.09 billion in passenger revenue and $228.4 million in cargo, ancillary, and other income. Operating income was $142.6 million, yielding an operating margin of 10.8%—up from 9.2% in March 2015. Net income attributable to Alaska Air Group was $98.3 million, or $1.34 per diluted share, compared to $71.9 million ($0.97 per share) in the prior-year period.
Unit costs showed continued discipline: total CASM was $12.64, down 1.9% YoY. Excluding fuel and special items, mainline CASM stood at $8.21—flat versus February but 2.3% lower than March 2015. Fuel expense was $217.5 million, representing 16.5% of total operating expenses, down from 19.1% in March 2015. Load factor remained steady at 74.1%, supported by disciplined capacity management and seasonal demand strength in leisure markets.
Looking ahead, Alaska confirmed firm orders for eight additional Boeing 737 MAX 8 aircraft scheduled for delivery between Q4 2017 and Q2 2018. The airline also announced plans to begin retrofitting 737-800s with new LED cabin lighting and enhanced overhead bin configurations starting in April 2016, targeting completion for all 52 aircraft by December 2016. As stated by CEO Brad Tilden in the March earnings call, 'Our focus remains on operational excellence, thoughtful capacity growth, and delivering value where customers live, work, and travel—without compromising safety or sustainability.'
Alaska Airlines’ March 2016 results reflect sustained execution against its multi-year strategic plan. With a younger fleet, stronger regional partnerships, improved reliability metrics, and growing cargo and loyalty program engagement, the carrier reinforced its position as a high-performing, customer-centric airline serving the Pacific Northwest and beyond. Continued investments in technology, infrastructure, and human capital set the stage for further gains in efficiency, service quality, and environmental stewardship through the remainder of 2016.
