Alaska Airlines’ Keys to High Customer Satisfaction

For the seventh consecutive year, Alaska Airlines (ALK) held the top spot in Customer Satisfaction among the Traditional Network Carriers survey conducted by J.D. Power. Traditional carriers consist of airlines that operate multicabin aircraft and serve multiple hubs.

Alaska Airlines also topped the Wall Street Journal‘s Middle Seat scorecard for US airlines for two straight years. According to the American Customer Satisfaction Index, Alaska Airlines scored third, with a score of 75 for 2015.

Alaska Airlines works to emphasize an improved passenger experience. All of its planes have advanced Recaro seats with a space-enhancing design, six-way adjustable headrests, and power outlets.

In 2014, the airline debuted its in-flight entertainment system, allowing passengers to stream entertainment content to their personal devices. Passengers can also partake in Seattle-based chef Tom Douglas’ signature entrées while in flight.

Alaska Airlines (ALK) notes that high employee engagement and aligning employee and company goals is essential for higher productivity, execution, and improved customer service. Performance-based pay serves as an incentive for employees to work together to achieve the airline’s stated goals:

• safety
• profitability
• on-time performance
• low cost
• customer satisfaction

Alaska Airlines started an employee engagement program called Gear Up, in which top management directly interacts with employees.

Mileage Plan, Alaska Airlines’ customer loyalty program, held the highest rating in the 2014 J.D. Power Airline Loyalty/Rewards Program Satisfaction Report. Miles for the frequent flier program can be earned by flying on Alaska Airlines or any of its partner airlines, including global alliances such as Oneworld Alliance and SkyTeam. Miles can also be earned by using the Alaska Airlines Visa Signature card. The earned miles can be used to fly on Alaska Airlines or any of its partner airlines, and they can also be redeemed to upgrade seats.

Investors can gain exposure to Alaska Airlines by investing in the SPDR S&P Transportation ETF (XTN), which holds ~25% in airline stocks and ~2.5% in Alaska Airlines. XTN also holds shares of Alaska Airlines’ peers, including ~2.5% in Southwest Airlines (LUV), ~2.5% in Delta Air Lines (DAL), 2% in American Airlines (AAL), and ~2% in United Continental Holdings (UAL).