Alaska Air Jettisoning Traditional Ticket Counters

THE WALL STREET JOURNAL) By Susan Carey Anchorage, Alaska -- When the Ted Stevens Anchorage International Airport was planning a new concourse, prime tenant Alaska Airlines insisted on a counterintuitive design: "The one thing we don't want is a ticket counter," said Ed White, the airline's vice president of corporate real estate. So the 447,000-square-foot Concourse C, which opened in 2004, has only one small, traditional ticket counter, even though the carrier's 1.2 million Anchorage passengers checked in through that area last year. This unconventional approach -- which uses self-service check-in machines and manned "bag drop" stations in a spacious hall that looks nothing like a typical airport -- has doubled Alaska's capacity here, halved its staffing needs and cut costs, while speeding travelers through the building in far less time. Now the Alaska Air Group Inc. unit is bringing an improved version of the same design to its hub at Seattle-Tacoma International Airport, which handled about 7.2 million departures last year by passengers on Alaska and its Horizon Air regional subsidiary. Later this summer or in the fall, a local frequent flier will be chosen to preside over the "ceremonial destruction" of part of the old Seattle ticket counter. That will launch the $28 million renovation -- $18 million to be borne by the airline and $10 million by the airport -- to be completed early next year. Most U.S. airports have shallow, rectangular check-in halls with endless ticket counters against the back wall. In between the counters and terminal doors typically are lines of passengers snaking back and forth, waiting to check bags or speak to agents for assistance. Even with most airlines' introduction of self-service check-in kiosks, fliers needing to check luggage or pets, buy tickets or ask for other assistance still need to stand in line. In Anchorage, the lobby is deep instead of shallow. But thanks to multiple windows, it is light and airy and provides a sweeping view of the Chugach Mountains to the east. The spacious hall is dotted with kiosks and roving customer-service agents to help passengers who aren't familiar with the machines. Those without bags can go immediately to the security-screening lines around the corner. Those with luggage proceed to bag-drop stations where the passengers, not the agents, place the bags on conveyor belts while the clerk checks boarding passes and identification, tag the bags and give the fliers the baggage stubs. Because the transactions are so swift at these stations -- and because the passengers (or, in some cases, porters) do the heavy lifting -- one agent can handle two lines of passengers, and the lines are rarely very long. Elite frequent fliers have dedicated bag-drop stations. Alaska's design in Anchorage has turned heads in the industry, and in 2006 the airline was awarded a U.S. patent for the check-in process, something it calls the two-step flow-through. Mr. White says his company isn't trying to keep competitors from going down the same path, but pursued the patent more to reward the many employees who helped to bring the idea to fruition. Other airlines quickly sent scouts up to Anchorage to check out the new concourse, including a team from Delta Air Lines Inc., Mr. White says. A few months ago, Delta completed a $26 million renovation of its check-in hall at Hartsfield-Jackson Atlanta International Airport, and the finished product looks remarkably similar to that of Alaska Airlines. Greg Kennedy, Delta's vice president for customer service there, says the new layout has enabled the airline to process passengers checking in during the peak spring break travel period in 20 to 30 minutes at most, compared with two or three hours three years ago -- and all in the same amount of square footage but 50% more usable space. Mr. Kennedy says he isn't aware of a visit to Anchorage but doesn't dispute it. Jim and Bobbi Davidson, in Anchorage on a recent Sunday morning for their flight back home to Portland, Ore., were enthusiastic about the check-in process. "I thought it was kind of cool and really fast," says Ms. Davidson, a move coordinator for United Van Lines. Her husband liked the "roomier" lobby. "I'd be interested to see this at Seattle and Portland, where there are more passengers," says the Oregon Air National Guard sergeant. Portland is on Alaska Air's wish list for the new layout, along with San Francisco, Oakland and other busy West Coast airports. Juneau, Alaska, will be getting the treatment next year and modified forms already are in place in Alaska's stations in Los Angeles and Puerto Vallarta, Mexico. But it's often difficult to make the existing space work or persuade airport authorities -- who have the last call -- to deviate from the tried and true. To hear Mr. White tell it, those who don't follow Alaska Air's lead are losing out. "We grossly underestimated the benefits" of the new process, he says. In Anchorage, the airline expected a 20% to 30% increase in agent productivity but in fact cut agents' times with passengers in half. While the number of Anchorage passengers has increased by 9% since the new concourse opened, the airline not only hasn't increased agent staffing but has reassigned some agents to other duties. No jobs have been lost. And a third bag-drop station in the lobby, not needed for now, has been temporarily leased to Northwest Airlines Corp. On a peak day in the summer, when tourists abound, a passenger might spend 15 minutes in the Anchorage lobby, says Mary Quantrell, Alaska's Anchorage station manager. But at an off-peak time, the wait drops to under two minutes. No industrywide average check-in time is compiled. The proof of the concept came in May 2003 when Alaska had a miniprototype set up for testing elsewhere in the airport. Two buses with 90 people in a tour group showed up at short notice and the airline immediately figured it was going to have to hold the flight. But the lead customer-service agent decided to use the prototype. Twenty minutes later, the entire group was checked in, and the agents, who had had trepidations about the concept, became instant supporters. Bringing the design to Seattle presents additional challenges because the airline won't be building a new facility but revamping the one it has -- and doing the work while it continues to serve travelers. But if productivity skyrockets in Seattle like it did in Anchorage, Alaska can make do with its existing premises for years instead of having to build a new terminal. Mark Reis, managing director of the Seattle Airport, says the plan represents "a much more efficient use of the real estate we already have." He says he supports the airline's innovation, but insisted on having his technical staff tweak the design to ensure that the passenger flow would be as efficient as Alaska hoped. "At times, there were tensions," Mr. Reis recalls. "We had dynamic but productive conversations over the right way to do this." The changes refined the placement of the kiosks, the bag-drop positions and the distance between the bag belts to provide maximum processing capability. Mr. White says one design change for Seattle will be locating the small, conventional check-in desks out of direct view of people entering the building, so they won't automatically gravitate toward them. "The visibility of something that looks traditional is a magnet," he says. "When they see it, they want to get in line." In Anchorage, the single "customer-service center," as the traditional check-in desk is called, is located on the far wall when passengers enter the building, leading some to march right over and queue up. Alaska, the nation's ninth-largest carrier by traffic, started a "skunk works" lab a decade ago to figure out how to use technology to make air travel less of a hassle for passengers. Out of that effort came the airline's ground-breaking ability to sell tickets on the Internet and allow fliers to check in online, developments other carriers quickly followed. One idea the lab tried was an utter failure: self-baggage check-in. "People wouldn't do it," says Mr. White. "There was an inherent distrust in not having to wait in line for something." They couldn't figure out how to get the bag tags on the suitcases and worried that the luggage wasn't going to make it to the correct destination, he says. So with an agent at the bag-drop position, "that seals the deal with the customers," he says.