Alaska Air undertakes technology upgrades after painful outages

Alaska Air Group Inc. is upgrading its technology systems in the wake of painful outages that upended operations and hit earnings, a crucial step in the company’s strategy to establish itself as a global carrier.

Seattle-based Alaska is weighing moving operational, back-office systems and data center operations to the cloud, Chief Financial Officer Shane Tackett told Bloomberg at the company’s headquarters last week. The airline is already adding extra storage and network switches in response to the technology failures.

“We will incrementally be using more cloud to create redundancy and resiliency,” Tackett said. “That’s work that we’re going undertake this year to understand if it makes sense for us to stay in the data center business or move to cloud over time.”

Alaska expects to increase technology investments by tens of millions of dollars annually between capital and operating expenses, a company representative said.

Many businesses and government agencies in the last decade have wound down their backroom servers or data centers in favor of rented computing power from the likes of Amazon.com Inc. and Microsoft Corp.

Core airline technology infrastructure, which performs computing-intensive scheduling changes that juggle thousands of variables, has been slower to use such on-demand services. That’s partly due to the difficulty of moving customized systems that run on enormous mainframe computers.

Like other carriers, Alaska has instead relied on a patchwork of internal infrastructure built up over decades. It already uses cloud-based services for its ticket sales and other customer-facing portals.

Part of Alaska’s revamp will include evaluating Amazon Web Services and Microsoft’s Azure, among other providers. Its changes follow work with Accenture, the consulting firm it hired following the outages.

“A lot of that gets into just redundancy,” Tackett said of its more urgent changes. “If one of your databases goes down, you can immediately turn on the one right next to it.”

The outages added to a tough 2025 for Alaska, which battled rising fuel costs, weaker demand and government-imposed flight disruptions. It is expected to release fourth-quarter results later this month.

In October, the airline canceled more than 400 flights, disrupting travel for roughly 49,000 passengers, after a failure at its primary data center. The outage cut off a vital tool the airline uses to measure aircraft take-off weight and balance, it confirmed.

Alaska also faced disruptions tied to a global outage at Microsoft Azure, which hosts some of its systems.

Shoring up infrastructure is critical as Alaska seeks to compete more directly with larger legacy carriers such as Delta Air Lines Inc. and United Airlines Holdings Inc.

The carrier on Wednesday said it is placing its historically largest aircraft order to cash in on demand for premium, long-haul travel and link its major hubs into a broader international network.