Diary of a Disaster - Alaska Airlines Inc. Flight 261

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

After all, continued negative press could impact travelers' airline choices, and Alaska Air has already been hit hard by the costs of a maintenance overhaul. As CFO Tilden pointed our in a Web Q&A posted after the firm's second quarter, "The direct costs of the accident are covered by insurance, but you can't say it isn't having an impact on our business. Things like more frequent maintenance inspections mandated by the FAA and lost business from canceled flights and schedule reductions are not covered by insurance." He estimated the cost of additional maintenance and engineering and flight operations staff hired at "roughly $17 million."

Kelly downplays the possibility of negative media coverage scaring its customers away. "We've found that a customer's experience when they fly on us is what matters, not the news media," he says. "If they have a good experience, they tend to ignore what they read in the newspapers.

Is Alaska Air the innocent subject of a witch hunt? Or a firm alerted to its flaws by tragic fallout and scrambling to reform? Somewhere in between? The question continues to fuel debate--as does the ongoing media scrutiny. "Kelly has been very responsive," says Cohn. "The question then is, why is there a problem? The fact that they were aware of a problem with maintenance before the crash is keeping the story going."

At the same time, the company's mounting concern over what it views as inaccurate and antagonistic media reports has led it to publish its own side of the story on its employee Web site. "Brace yourself," reads the opener of Culture Clash, a missive that warns employees of "misguided arguments" likely to appear in the Seattle Times and posts Kelly's answers to the Times' questions, virtually none of which were used.

But Alaska Air's responsiveness has kept the fallout to a minimum. "They did a good job of containing the story," says Cohn. "We're still hearing about TWA. If the company doesn't respond well with the press and with compassion, the story expands."

"I thought Alaska Air's communication was good," adds Southwest's Kelleher. "John Kelly flying down to the scene was a wonderful thing."

Clearly, Alaska has avoided the mistake made by predecessors like Exxon Oil's Lawrence Rawls, who provoked suspicion-and the media's wrath-by stalling communications after the Valdez oil spill in 1989.

Today's scribes are no more forgiving. Former Coca-Cola CEO Doug Ivester was unseated after a bungled product recall, while the blame-volleying antics of Firestone CEO Masatoshi Ono and Ford's Jac Nasser have both CEOs in the hot seat. And President Vladimir Putin's woefully inept handling of the recent Russian Kursk sub disaster has painted him as cold-hearted and calculating--not an image leaders look to cultivate. "The Kursk disaster is the biggest wake-up call for companies around the world that an accident is going to be covered," says Cohn. "And if a company doesn't jump in and get involved immediately, it's going to look very bad."

"One of the most important things from a crisis communications standpoint is to make yourself available within a reasonable amount of time," adds Kelleher. "Obviously, in these situations tending to the needs of the passengers and the employees who were on the plane comes first. But once you've done everything you can for those folks, it's essential to make yourself available to the media with as much information as you can knowledgeably disclose."