Diary of a Disaster - Alaska Airlines Inc. Flight 261

Chief Executive, The, Oct, 2000 by Christopher SPRINGMANN, Jennifer PELLET

The recent crash of n Air France Concorde demonstrates just how quickly word -- and video footage -- of a tragedy can cross the globe. A spotless reputation one minute, one marred by question marks the next -- one disaster can quickly plunge even the most revered of companies into jeopardy. In such an image-conscious and media-frenetic world, a CEO's ability to tread carefully, yet respond rapidly in crises is critical. But it's no easy feat. For a close-up look at grappling with the aftermath of tragedy, CE goes behind the scenes with Alaska Airlines CEO John Kelly, who has been besieged by federal probes, lawsuits, and scandal-hungry media since the January crash of Alaska Air Flight 261.

Day One

January 31, 2000, 5:30 p.m.:

Alaska Airlines Flight 261 from Puerto Vallarta to San Francisco is reported to have fallen off the radar scope approximately 20 miles north of the Point Mugu, California, coast... The Coast Guard has been dispatched...

"John, Greg and Jack need to see you right now. It's urgent," said Barb Johnson, CEO John Kelly's assistant, catching her boss mid-stride as he exited CFO Brad Tilden's office, a can of diet root beer in his hand. It was 4:45 p.m.

Minutes before, Jack Evans in media relations had fielded a call from the FAA in L.A. forwarding a local TV reporter's inquiry about a plane going down. Greg Witter in communications frantically called flight operations but no one answered. He tried the VP of technical operations and again there was no aswer. Within seconds, another reporter was on the line asking about an Alaska plane in the water even as flight operations called to confirm the apparent fate of Flight 261.

Kelly headed for Evans' and Witter's cubicles, soft drink still in hand, where Evans told him, "We may have a plane in the water." After operations confirmed the information, Kelly returned to his office to collect his emergency procedures manual, laptop, and cell phone. He flipped on his office TV to see CNN going live with the story just before rushing across the street to the company's crisis command center.

By 5:15 p.m. Kelly and Witter were drafting the first of a series of public and Web site announcements and canceling all print and broadcast media advertising. The media relations department swelled to 53 as pre-selected staffers from other departments joined the effort. A representative from nearby Boeing called, offering an aircraft with communications capabilities. At 8 p.m., Kelly and his team were in the air to L.A. for a press conference attended by relatives and friends of the passengers and crew of Flight 261. In LA., they were joined by psychologist Joe DesPlaines of FEI Behavorial Health, retained by Alaska Air for its Compassionate Assistance Relief Effort (CARE) program. CARE provides emotional support to family members of passengers involved in an accident and coordinates efforts with the National Transportation Safety Board (NTSB).

Both CARE and the company's Critical Incident Response Program (CIRP) were initiated by Kelly, who overhauled the company's crisis management program soon after taking Alaska Air's helm in 1995. "When I first came to Alaska, I said, 'Let's have an emergency drill,"' he recalls. "What became evident was that all of our procedures were focused on operational and hardware issues: aircraft status and sending out incident teams."

As someone who had been down the path of both personal and professional tragedy before, Kelly recognized the limitations of an operations-focused crisis program. As CEO of Horizon Air, he had weathered a crash and the ensuing aftermath in April 1988, then lost his wife of 20 years, Cheryl, to breast cancer in May 1990. While no one died in the Horizon crash, there were injuries, and Kelly came away from the experience with an understanding of the human element. "I personalized everything. I felt responsible, blamed myself as CEO, and tore myself apart," he recounts. "We didn't have response programs, grief or trauma counseling. It took me two years to deal fully with the Horizon crash. I told myself, 'Never again will I go through this."'

Even as he launched CARE and CIRP, Kelly was continuing a cost-cutting program instituted by his predecessor, CEO Raymond Vecci. It's this program that has raised questions about the airline--and Kelly--compromising safety for the sake of boosting profits. Local newspapers have repeatedly painted Alaska as a flouter of rules, charging that the very maverick spirit credited for its fast growth has encouraged, as a Seattle Times article put it, "a culture that condones sidestepping safety regulations for the sake of saving money."

It's a charge that Kelly vigorously denies. "That makes no sense whatsoever," he asserted when a reporter raised the issue at a post-crash press conference. "All we offer is safe air transportation, and we're going to compromise that for a one-year profit?"

Refuting such allegations, which continued to mount in the weeks and months that followed the crash, would prove the biggest challenge of recovering from the tragedy of Flight 261.