SAF, Star Ventures, & Alaska’s Sustainability Journey

Insight by

Helane Becker, Cowen’s Airlines, Airfreight & Aircraft Leasing Analyst, goes behind the scenes with Alaska Air Group’s SVP of Public Affairs and Sustainability, Diana Birkett Rakow, to get the scoop on Alaska Air’s plans to reduce their carbon footprint–including plans to purchase 185 MM gallons of SAF from Gevo over five years beginning in 2026. They also discuss the company’s commitment to inclusion & diversity, which is crucial considering the Airline’s presence in Alaska, where several cities depend on air service for survival.

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Transcript

Speaker 1:

Welcome to Cowen Insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.

Helane Becker:

Hello. This is Helane Becker, Cowen senior airline analyst. And we’re joined today by Diana Birkett Rakow, who is Alaska Airlines’ head of sustainability. So, Diana, thank you so much for doing this podcast with us. I think it’s really important that investors and others understand what airlines are doing to mitigate their carbon footprint. I mean, obviously, sustainability and the environment is only one part of the ESG program and everything else, but that’s the one that we’re really focused on in the short-term and in the longer-term.

              So, airlines in general have committed to being carbon neutral by 2050, and you’ve been working on this issue for some time. In fact, I feel like you’re an industry leader. Alaska has really done a lot historically in a lot of different areas. Especially in the state of Alaska, you guys have pioneered so much in terms of technology and in takeoffs and landing and doing it safely because obviously there’s a lot of fog in Alaska and parts of it. It’s a hard place to live and a hard place to fly into. So, let’s talk about all of that over the next few minutes in different categories. So, we’ll start with, why is the issue important to the company? Why are you focused on this?

Diana Birkett Rakow:

Sure. Well, thanks, Helane, very much for having us and for your kind words. Alaska has long had an ethos of, we talk about delivering value for all who depend on us or for all of our stakeholders and the four stakeholder groups that we talk about, and they’re often represented in a circle because they’re mutually interdependent and it’s not a hierarchy, are employees, are guests, are owners and are communities. And we have to make sure that we’re delivering value for all of those in order for us to remain strong for the long-term. And I think you know we’re celebrating our 90th anniversary this year and it reminds us how we’ve weathered the ups and downs of the industry and some of the ingredients that have contributed to that resilience. So, when you think about sustainability, the word means a lot of different things to a lot of different people, but one of the things that I like about it is the literal definition is to sustain for a long period of time.

              And so, we think about delivering for those stakeholders as a requirement for sustaining for a long period of time and delivering long-term value. And environmental sustainability is a key part of that because we see how communities are impacted by changes in the environment, both physically and in the atmosphere. The social side of sustainability is similarly important for long-term talent development and for our guests. And you could take a lot of examples across the spectrum of ESG. One thing that you noted that I think is a cool almost serendipitous but interesting conversion of just safety and practicalities of the environment and sustainability is, are required navigation performance software that’s now on all of our aircraft came out of as a challenge with safety flying into Juneau in between these two mountains, and there was a lot of extreme weather. And we developed our pilots and others involved in flight operations developed this technology to use satellite based navigation to develop safer flight paths into Juneau.

              And now we use it in many airports across the United States, but it also happens to be a more fuel efficient path because you’re able to do more of almost a glide route with fewer accelerations and breakings, and it has contributed to improving our fuel efficiency. So there’s many things that have operational benefits, safety benefit, and sustainability benefit all in one. And we can talk about other examples as we get into the conversation.

Helane Becker:

That’s great. Yes, that whole R&P into Juneau was a very big deal when it was done. I mean, a lot of people don’t remember it because they’re new to either the airline industry or new to Alaska Airlines, but that was a huge undertaking. And you worked with the FAA, and to your point, your pilots really took the lead on that. And people in the Lower 48 don’t understand Juneau, it’s the only airport that you can’t drive to, it’s a fly only.

Diana Birkett Rakow:

It’s not the only one. We actually serve 20 communities in the state of Alaska and only three of them are accessible by road. So, it just really underscores how critical aviation is in Alaska, but Juneau is the capital, and they actually thought about moving the capital because you couldn’t dependably get in and out of there. So, you’re right, it was a huge and very employee-driven, which is even better.

Helane Becker:

Right. Really exciting. Yes. The milk run, which is people, again, don’t know about the state of Alaska and how important. And this I really feel is part of your community involvement and engagement how important the airline is to the state because you fly, and this is a little off topic, but you fly what we call the milk run, we’re stopping every, whatever, I’m going to get this wrong, but let’s say every 15 to 30 minutes bringing needed supplies to the communities that are generally small A and B that are reliant upon the airline for everything, including mail.

Diana Birkett Rakow:

Yes. It’s groceries, mail, medicine. Those communities in Southeast up in the Arctic, it’s one of the reasons we have a strong cargo business. I mean, it gets back to the four stakeholders, but that ethos, I think, is embedded in our DNA and similarly applies, although in different ways to rural communities in Lower 48, but also to urban hubs like LA and San Francisco and San Jose and New York actually being able to serve the needs of those communities. I think it allows us to bring a slightly different perspective to making sure that we’re serving the needs locally, as well as across our system.

Helane Becker:

Right. Exactly. So, here’s another question for you about the whole sustainability issue. Why should your customers care and why should investors care about it? I get a lot of pushback from investors that, “Oh, they don’t really care what airlines are doing as long as you’re profitable.” And they worry about bringing on too much capacity and so on. But why should everybody care about what you’re doing with respect to preserving the environment?

Diana Birkett Rakow:

Well, I think some of it comes down to that question about long-term value and truly long-term sustainability of the company, the industries and the communities we serve. We do see impacts of climate change in the state of Alaska. For example, we see them in industries that we support such as the fishing industry, and we need to make sure we’re thinking about the stability of our industry and our communities over the long-term, as well as the stability of our business over the long-term. So that’s the lens that we bring to it. We are really trying, and our board was incredibly helpful in helping us think through and scope our goals. We set near term 2025 goals for across areas of ESG, environmental, social and governance. And we set a five-part path to net zero by 2040.

              And one of the things that we’ve tried to do is be both think about the long-term but start now, think about what can we do now to build innovation over a long period of time and try to be really practical about what can apply in our business in the next three to five years, as well as aspirational about our goals. Not to box ourselves in too narrowly in terms of what we, as a company and an industry, can achieve over the long-term. So, that’s a couple of just ways that we think about it.

Helane Becker:

Yeah. But they’re important. They’re important ways and I think it’s important to your customers. Do you find, or are your business customers or corporate accounts coming to you and asking what you’re doing as well and offering carbon offsets? I don’t know if that’s the way.

Diana Birkett Rakow:

Yeah. No, very much. I think certainly corporate customers are leading the way. Many of our corporate customers have set their own net zero targets or sustainability targets, and we’re a part of their sustainability picture in terms of their business travel, contributing to scope three emissions on their books that are the direct emissions of our operations. And many of them have set objectives to reduce those over time. So, they’ve come to us to work with us to figure out how we do that together, both through direct action. And we, couple years ago, started to work with Microsoft on applying staff to offset the business travel emissions of Microsoft employee travel from Seattle to our hubs in San Francisco.

              But they’re also interested in recycling in the life cycle of an aircraft. There’s a variety of topics that they’re interested in. So those are always fascinating conversations. And then increasingly, individual guests are very interested, the switch to Boxed Water, which maybe we’ll talk about, got a lot of interest. And that’s also an education opportunity to start talking about the challenges in the supply chain and the impact of plastic and waste and the importance of recycling. And we do offer a carbon offset option for our guests flying on us and look forward to evolving that in the next couple of years as well.

Helane Becker:

So there’s three things that you just talked about that I want to expand on. The first is the Boxed Water, for sure. The second is SAF and the third is climate and how it’s impacting your hubs. So, let’s start with Boxed Water first, because I think that’s fun. When I saw that, I was pretty excited. I had seen it on a plane before I actually heard about it and I wondered, what is this? But they do boxed wine, why shouldn’t they do Boxed Water? So what was the impetus for that? Was it just plastic reduction?

Diana Birkett Rakow:

2025 goals is to move the top five waste producing items in our onboard operation to more renewable, reusable, recyclable options. And we’ve done some of that over time. We moved wine into aluminum cans. We’ve moved some of the glass bottles in our inflate service to aluminum because it’s lighter. So not so much about waste, but more about the fuel efficiency of the operation. And in 2018 we went strawless when a lot of people were talking about going strawless. And we removed 22 million draws and plastic stir sticks off of the operation. So this was a continuation of that journey and plastic water bottles are one of the most visible. And you probably remember, it was even more painful during COVID because everybody got a little individual plastic water bottle and the volume of that water to the surface area of the plastic was difficult to see.

              And so, it really drove this impetus to find a different solution. And Boxed Water, our supply chain and food and beverage teams are just phenomenal partners and doing a lot of ongoing sourcing for options. And Boxed Water is a company that was really motivated to work with us. And we worked to understand the life cycle analysis of their product. The box is a recyclable carton. We did a study of all of our hubs to look at carton recycling availability and all of those stations to make sure that we would actually be able to recycle the product. And then the cap is actually a plant-based cap. And we visited their manufacturing facility that the machine that actually boxes the water and completes the product as a really cool machine to see. And it removed our 1.8 million pounds of plastic off of our aircraft annually.

              And then the next piece is, okay, you remove the plastic bottle, but what about the cup that you’re pouring the water into? And so, we actually went to paper cups instead of plastic cups for our water service. So now it’s a plastic free water service. We found a plastic cup that can also withstand alcohol and other beverages, and so, we’ll move entirely to paper cups in the next year or so. And that’s just an ongoing journey to continue to source onboard products to make sure that we’ve got more renewable and recyclable options. They have to be price competitive. They have to be able to deliver at scale and reliably. And so, that’s a long-term journey with the supply chain.

Helane Becker:

Yeah, that’s awesome. I just think that’s very forward thinking, and again, Alaska Air is definitely a leader in the area.

Diana Birkett Rakow:

One thing that’s really cool and I think underscores our ethos around waste and I know we’ll switch to staff and emissions in a minute, but our onboard recycling program was actually designed by Horizon Flight Attendants years ago, and really spurred by our employees. In 2019, we were recycling 83% of onboard waste. Obviously, we had pause that during COVID, but we’ve now brought it back and it’s just really cool to see how some of those grassroots initiatives can really make tremendous change. Not unlike what you talked about with R&P.

Helane Becker:

Yeah. I think it’s amazing. You have always had a great relationship with your employees and they’ve always contributed to the wellbeing of the airline and here’s just another example, for sure. Is there anything else we should talk about with respect to plastics?

Diana Birkett Rakow:

No, we could talk for a while, but go ahead and switch to SAF.

Helane Becker:

Okay. So, yeah, that’s a big thing. You guys are one of the few airlines that still have a hedging program. Most of the other airlines have eliminated their hedging because they didn’t get it right. You guys obviously are seeing the benefit of that right with higher fuel costs. But, how do you think about this SAF? It’s not scalable yet. Do we need to have government incentives? I mean, how should investors think about the use of SAF and how do we get enough of it?

Diana Birkett Rakow:

It’s a big topic and a good question. So, maybe just for context, our five-part path to net zero includes five steps. The first is operational efficiency as a foundation. The second is our fleet transition, fleet renewal, and in particular, bringing on the max. The third is SAF. The fourth is electric or hybrid electric propulsion, which we see being first most viable in the regional space. And the fifth is carbon offsets only as needed to close a gap to target because the timeline of some of those technologies is variable. And when we talk about this pathway, we often put an asterisk next to SAF because it could be a small part of the path or a large part of the path, depending on how some of those levers that you’re talking about get implemented or not. We are focused on building diverse portfolio of SAF producer partnerships.

              We’ve got offtake agreements with several different producers at this time, and then we also have some partnerships that are not for offtake yet because the product isn’t being produced, but that are partnerships to get the technology off the ground. The latest is with a partner called 12 out of the bay area, super innovative company that have designed a technology that takes recaptured CO2 and using renewable energy and water transforms it into sustainable aviation fuel. And in particular, this product they call eFuel because it’s based on renewable energy. That pathway in particular very early in its evolution needs to benefit from continued investment in scale from, we’re committed to working with them to do a commercial demonstration flight certification. And certainly then for that SAF and for others, they will in the next several years, continue to rely on tax incentives or renewable energy credits. And we need more of those including at a federal level to make sure that we’re chipping away at the price premium that SAF has over Jet-A.

              That’s going to take time. It’s going to take public policy action as well as private investment, but SAF does represent the greatest near to medium term opportunity that we have to decarbonize aviation. So all of us are very committed to that pathway. The question just is how far, how fast can we get there?

Helane Becker:

Got it. Yeah. I think it’s an exciting technology. I mean just across the board, but it’s really being able to scale it, have it available and then get it from the manufacturing site to the airports. And I don’t know on the West Coast, but I know in the East Coast, the colonial pipeline has said it will carry SAF, which is a good starting point.

Diana Birkett Rakow:

The good things about SAF is that it is certifies as a drop in fuel. So it needs to be blended, but you can mix it into pipelines and fuel systems. I think as humans, we tend to want there to be a really simple answer to problems. And SAF is one of those that has a very complex answer. There’s no one thing that is going to bring it to scale at a commercially viable price. And so, we’ve got to think about delivery using rail and pipelines and blending facilities. We’ve got to think about feed stocks and diversifying the pathways to actually create the fuel, there’s different types of pathways to get there. We’ve got to think about those tax incentives and the policy infrastructure. And we do have to think about education and awareness for corporate customers and individual customers to know that this is out there and continue to support its development.

Helane Becker:

Exactly so. And then the other thing that we were going to talk about was you mentioned, I think point number four, hydrogen electric.

Diana Birkett Rakow:

Yes.

Helane Becker:

So I think I’m new to that. I know eVTOLs and electric aircraft, but I think I’m new to the hydrogen aspect of it. So maybe talk a little bit about that.

Diana Birkett Rakow:

Sure. And we can talk about eVTOLs too, but I will caveat this by saying that I’m not an engineer and my bachelor’s degree in chemistry is long outlived. But hydrogen and battery can both play a really important role in building novel propulsion systems. The challenge with battery is that the energy density of it is such that, first of all, its weight doesn’t burn off over time the way that you fill a fuel tank and it burns off over time. But also the energy density is such that it’s really best designed for a smaller number of seats and shorter distances on its own. There’s some really cool companies that are bringing electric aircraft to market, and they’re really exciting, but they don’t get to the scale of like a 76 seed aircraft in our regional operation. So then the question is, what could you add to the battery or to an electric part of the propulsion system to back it up? And you could add traditional fuel in partnership with battery, or you could add liquified hydrogen or other forms of hydrogen to back up the battery.

              And that’s what the opportunity is to think about the combination of those different technologies. We’re partnered with a company called ZeroAvia, which is building an electric-hydrogen powertrain system. We’ve contributed a Q400 to their development pathway to look at how would you actually take a Q400 and retrofit it to fly on hydrogen electric powertrain technology. I think that’s an exciting, it’s not in the next five years, it’s going to take time to make sure that the technology is sufficiently advanced to carry a larger aircraft than just a nine to 19-seater. And it’s going to take a long time for certification, but if we don’t start planning those things now, we won’t get there. So, I think that’s where that hydrogen electric propulsion idea fits in our pathway.

Helane Becker:

Got it. And I think also Ravn Alaska committed to buying the ZA powertrain to retrofit on their aircraft. So, yes, this is very exciting. And last year when I was doing work on the electric vertical take-off and landing aircraft, I got at my old physics books.

Diana Birkett Rakow:

I love it.

Helane Becker:

It was a fun first quarter that I learned about the technology, which is so different from aircraft that move down the runway rotate and take-off versus how you transition from hover to moving forward, hover and landing. I mean, it is a major physics.

Diana Birkett Rakow:

It’s a good point. It’s a very different way of flying.

Helane Becker:

Yes.

Diana Birkett Rakow:

The only reason that we’re not focused on eVTOLs is there’s one example that might be relevant, but the only reason we’re not focused on eVTOLs is not that they’re not exciting because they are, but what we’re focused on in that five-part path is decarbonizing our operation. And right now an eVTOL couldn’t supplant a flight that we fly in our operation. So, it would be a really interesting add-on to say, get from SFO to your home in the Bay Area, almost like a park and ride system, but it just can’t supplant any of those existing flights, so we’re most focused on our operation. We’ve got a new venture investment arm, new as of last October called Alaska Star Ventures. And through ASV indirectly, we are invested in a company called Beta Technologies who have a really cool electric operation. I saw it fly recently, and it’s I say see rather than hear, because you just don’t hear it. It’s kind of amazing.

              But something like that could also be interesting as a partner to our systems, say, on the cargo front to extend the reach of our existing cargo operation through a part Beta would work with a partner or something to get things farther into smaller villages.

Helane Becker:

Got it. Yes. UPS is working with them as well on that. My colleague Cai von Rumohr knows Beta very well because he and I partner in the eVTOL area. He’s our aerospace analyst. And of course, he does the manufacturing and I do the people side. We’ve partnered to learn more and get more involved in the space. And to your point, you’re right. There’s nothing on the horizon in the eVTOL sector that’s going to get 50 or 150 people from San Francisco to LA, it’s all about ground transportation replacement. And I think there are a lot of people that don’t understand that. And then don’t even get me started on the regulatory front, which a lot of people don’t understand the hurdles that you have to go through to get an airplane from concept to actually certification. So, we won’t go there.

Diana Birkett Rakow:

Sure. Yeah. But no. So we’re focused on what do you do with our 737s and our E175s to make sure that they continue flying more sustainably.

Helane Becker:

Exactly. I noticed you guys are replacing Q400 with Embraer aircraft, are they more fuel efficient? What’s the Genesis behind that? I would think a turbo prop, which is the Q400, a sophisticated turbo would be more efficient than a jet.

Diana Birkett Rakow:

Well, actually both main mainline and regional operations are really about the efficiency of the operation and the simplicity of the operation, really about making sure that we are simplifying, including pilot training, maintenance, simplification, all of those fronts.

Helane Becker:

Got it. Okay. Let’s see. What else should we talk about. Before we go on to diversity and commitment to social, is there anything else we should talk about with respect to environment or sustainability or things that we might have missed?

Diana Birkett Rakow:

Let’s talk about operational efficiency just for a second, and maybe work in, you had asked about GSE?

Helane Becker:

Right. Well, yeah, let’s go ahead and talk about the operational efficiency, because I think that’s really important, and day of operations tend to be fraught with issues that we wanted to talk about climate as well and how that’s impacting your hubs. Because I’ve always thought of Seattle specifically as being a mellow place. Yes, there’s a lot of rain in the winter, but it’s a mellow city and yet it’s issues of snow, and really, I don’t want to call it severe weather because it’s not, but it’s weather that you would normally never think of when you think of Seattle. So, let’s talk about those. What is that two or three things?

Diana Birkett Rakow:

So maybe let’s start with Seattle is a good microcosm, it’s our largest hub and there’s a lot going on here. And Seattle itself has grown tremendously over the last decade, so has our operation here at SeaTac. So a couple things there. One, you asked a little bit about, have we seen the impacts of climate change, and there has been more severe weather. Our city tends to go in cycles. I remember 15 years ago living here and there was a snowstorm that shut down the city for days. So, it goes ups and downs and we have to adapt to that. We did have a pretty significant period of excessive heat last summer. That was a good learning experience for how do you keep crews cool. But the bottom line is, how do we work with our airports to make sure that we are set up to navigate all of those different dynamics?

              And there are working groups at SeaTac, at SFO and elsewhere to think about how do we both advance the sustainability path, but also navigate challenges or changes that come up as we move forward. Probably the biggest infrastructure impact we see is in the state of Alaska and ongoing work to make sure that we’re working with the state and in our own terminals to keep runways strong and continue to navigate the impacts of shifting land and permafrost in those things. But the other aspect of an airport operations is what do we do on the ground to make sure that we’re running a tight operation and something that goes with that is as efficient operationally and efficient environmentally operation. And so, we’re focused on a couple of things there. One is we have a goal of cutting the emissions from carbon emissions of our GSE in half by 2025, we’ve got 34% of our GSE right now is electric.

              Obviously, that requires having sufficient infrastructure to charge them, including through things like rainstorms. And so, that’s an ongoing got a long term plan to evolve our GSE fleet and work with airports on infrastructure to make sure that we’re moving in the right direction there. There are some forms of GSE that simply don’t come in electric form. So, that’s obviously a longer term issue with the supply chain. But the other thing in the operation is using best practices, like making sure that the ground power works, that it’s at the right temperature coming out of the airport and that it’s plugged in at the right time so that pilots can turn off the APU. And that’s a multifaceted problem to make sure that the temperature is controlled the right way, the technology works, the ground crew is set up to plug it in and then that the pilot trust that it’s going to get plugged in and is able to turn off the APU. Or at some airports we’re able to use single engine taxi.

              And one of the things that we did last year is we actually are familiar with our Performance Based Pay program that rewards employees for achievement of goals. One of our goals now starting in 2021 and going forward is actually around carbon emissions. So that 10% of the bonus is based on a target around carbon emissions or carbon intensity, the operation so that everyone is incented to continue to come up with those solutions to improve the operational efficiency of the airline.

Helane Becker:

That’s very detailed. That’s more than I was thinking. So, that’s really good to know, for sure. So, just talking about flight shaming for a minute. People don’t understand how much the industry is doing to get ahead of, whatever, 2050 rules, your goals are 2040, you mentioned that earlier. That’s real important. You take the lead in on a lot of different areas, working with your own people who are also figuring out. That’s the best when your people who are dealing with the day-to-day operations can figure out how they can reduce cost, or to your point, contribute to improve their performance pay, I guess. I guess that’s the way to think about that.

              So now let’s shift gears and maybe talk about diversity and commitments to social aspects of the business. I’m not sure how to think about the social aspects, but the airline industry has diversity within the company, especially at ranks below the C-suite. You go to the airport, you see a lot of people who are diverse. You guys are especially unique because you do have a big Indigenous population in the state of Alaska that you very often address. And I know I’ve talked to the company about it in the past. I mean, I’ve covered Alaska Air for a very long time, since it was a smaller airline. And when Seattle was the Southern most point on its root network and unwatched it developed till Seattle was the midpoint of the network.

Diana Birkett Rakow:

Now, we’re down to Belize.

Helane Becker:

And now you’re down to Belize and now to Hawaii and Costa Rica, and yes, there are a lot of places, and then you fly to the East Coast. A lot of places that Alaska Air goes now. Anyway. So, let’s talk about that. Let’s talk about commitment to the board. The board is pretty diverse too, by the way.

Diana Birkett Rakow:

It is a very diverse board, both gender as well as race and ethnicity.

Helane Becker:

Right. I think your lead independent, I don’t know who it is I should know this, who it is now, but at one point your lead independent director was an Alaskan Native.

Diana Birkett Rakow:

Well, right now we have Patty Bedient is actually now our chair. She was our lead independent director. She’s now our chair, so female chair of the board. And then we have woman who’s Alaskan Native on the board. We have a diversity of geography as well as also thinking about deep roots in Alaska and in Hawaii to make sure that we’re reflecting those communities.

Helane Becker:

Okay. And then within the company, what are you doing… I imagine entry level is pretty easy to be diverse. And then as you go up the scale, maybe it gets a little bit harder. So, how are you thinking about encouraging people? I see it with my kids who are all grown up starting to raise kids of their own. They’re leaving. It makes me question my choices. I worked throughout their whole entire life. I never took time off other than believe I got when I had them. And I find it astonishing, like I was your role model and they’re making a different choice. So I wonder about my choices, but anyway. What are you doing in the funnel to keep people to attract and really retain?

Diana Birkett Rakow:

Attract, retain, and diversify, it sounds like is part of your question.

Helane Becker:

Yeah.

Diana Birkett Rakow:

Well, I would think about it in four parts. One is goal setting. So, we did set some goals at last year around diversity of our workforce, as well as some metrics around building an inclusive culture. The diversity of our leadership actually, in particular, goal that we set was for leadership to senior leadership to reflect the diversity of the frontline. And so, in particular, our full employee base is 30% Black, Indigenous and people of color. And the leadership ranks were 16% Black, Indigenous and people of color. So we’ve got year by year targets to move that to 30%. We’re at nearly 20% now, so we’ve made some progress over the last year and need to continue to make progress through the next several. So, part of it is goals, having something to shoot for.

              We did then similar to the carbon intensity goal that I talked about for our PVP program, we also put a goal for our performance-based long term executive compensation performance-based pay. We put a goal in that system around achieving those leadership diversity targets. And the reason that we put it in long-term executive comp is leaders have the best opportunity to develop and advance talent and secondarily it happens over time. So, the third part then is, what are the tools that you give people to attract, develop, retain? And we’ve been working with our leaders to make sure that they’re not only accountable, but also they’ve got information about what is diversifying, our workforce look like, making sure we have Diverse Candidates Slates and interview panels. We’ve put leadership development programs in place, including a newly launched leader academy. And we established a mentorship program this year to support networking and access to leadership across the board.

              And then we have a vast network of business resource groups or BRGs that represent a variety of different groups within our employee base and executive sponsor those so that there’s both support visibility to that talent learning from that business resource group and access to leadership with a two-way exchange of ideas. So, there’s a variety of different things that we need to do on an ongoing basis. The fourth piece is then, how do we engage the community to continue to diversify our talent pipeline? And there’s a number of things that we’ve put in place this year, not specific to diversity, but things like the Ascend Pilot Academy, which we just launched this year to develop a dedicated pool of pilots, but more broadly going even farther upstream in the talent pipeline working with community-based organizations to introduce young people to aviation careers and introduced a broader diversity of young people to aviation careers.

              And a couple of examples. We have aviation days, we call them in Seattle and Portland where we bring this year, it was 2,500 young people across Portland and Seattle to our hanger to meet pilots and flight attendants and mechanics. They learn about how an airplane works. The folks from Joint Base Lewis-McChord down the road bring a big aircraft over and just a lot of learning. But we also have career programs, pilot training programs, mechanic training programs that come and talk to young people about how to get involved in those opportunities.

              And then just specific to the Alaska Native population, which you raised, we have deep partnership with a program called Alaska Native Science and Engineering Program, which supports young people across Alaska Native villages to have access from very early ages to good STEM education, support, and access, then to fly to Anchorage for accelerated programming in the junior high and high school years and into college and beyond to make sure that we’ve got a great pipeline of STEM talent coming out of those communities. And in particular, we’re working with them on an aviation track so that we can get some of that talent specifically dedicated to aviation.

Helane Becker:

That’s Awesome.

Diana Birkett Rakow:

Not unlike SAF, it’s a complex challenge, but a lot of different strategies.

Helane Becker:

And it takes time to develop and people have to understand that it’s a great career.

Diana Birkett Rakow:

Exactly. And just how many different career options are within aviation and that you can move between them as well.

Helane Becker:

Right. Exactly. And I think a lot of people within the state of Alaska anyway, because it’s so fast, get their pilots license at very young ages.

Diana Birkett Rakow:

Yes.

Helane Becker:

And that’s really a major positive for the airline because you do have access to people and have that ability from young ages.

Diana Birkett Rakow:

Yeah. And that innate love and appreciation of flying because they grew up with it.

Helane Becker:

Exactly. Exactly so. Okay. I think that we covered everything. Is there anything we missed that we should hit? We talked a lot about reducing plastics. We talked about sustainability.

Diana Birkett Rakow:

A lot.

Helane Becker:

Yes. We covered every element of what you do.

Diana Birkett Rakow:

Yeah. I think we did. We talked a little bit about the public policy requirements for SAF, but I think if it’s useful, just maybe to double down on that, I think we benefit from a Low Carbon Fuel Standard Program in the state of California that opts SAF in for a tax incentive there, which helps with the price. And we’ve got Low Carbon Fuel Standard Programs and Development in Oregon and Washington with the goal of being comparable to California so that we can over time build a market up and down the West Coast. We do really need that federal support for not just additive benefit, but broader benefit across the country.

              Best option right now is the SAF blender tax credit, which exists in a couple of different legislative vehicles. But we’re really focused on trying to get that over the finish line to make SAF a more scalable option down the road.

Helane Becker:

Great. That’s A, important, and B, good to know. Okay. Well, thank you so much for your time today.

Diana Birkett Rakow:

Thanks for being interested. It’s fun stuff to talk about and it is important to our collective long-term.

Helane Becker:

I think it is. And I think the 2020s are all about just exploring I call it the exploration decade, just exploring every aspect of it. The 2030s will be about creativity and creating everything and getting regulatory approvals and getting everything across the finish line. And 2040s are about implementation. And in Alaska’s case, you anticipate being at net zero by 2040. So, I think it’s very exciting. Lots of good stuff.

Diana Birkett Rakow:

Well, thanks, Helane. We’re committed to making progress and we’re trying to do it in typical Alaska style, smart, pragmatic, doing all our homework, trying to think about what’s possible now and what’s possible in the future. And we know we can’t do it alone, there’s a lot of people that we learn from, and certainly benefit from partnerships across the private sector and in the public sector as well.

Helane Becker:

That’s great. Thank you so much for your time today. I really appreciate it.

Diana Birkett Rakow:

Thanks very much to you.

Speaker 1:

Thanks for joining us. Stay tuned for the next episode of Cowen Insights.


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