Small is beautiful at Alaska

01/29/2010 | Wall Street Journal, The

Alaska Air Group, parent of Alaska Air, the smallest of the legacy carriers in the U.S., also has one of the strongest balance sheets in the industry and a six-year streak of operating profits. CEO Bill Ayer believes Alaska has achieved its strong position because of -- and not in spite of -- its small size. "You need to get to a certain size," he says. "But beyond that, it's neutral to negative to be bigger." Alaska's strategy is contrary to the industry's conventional wisdom, which holds that customers prefer larger airlines for their extensive route networks and frequent-flier perks. But Alaska's extensive partnerships allow the small carrier to offer the benefits of a much larger one, while still maintaining its independence.

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Wall Street Journal, The

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