Alaska Airlines Launches New Venture Fund

Alaska Airlines Launches Venture Capital Arm for Sustainable Aviation

Alaska Airlines has initiated a new venture capital division, Alaska Star Ventures, marking a significant step by a major airline into corporate investing. This move aligns with the broader aviation industry’s pursuit of emerging technologies designed to reduce carbon emissions from air travel.

Initial Investment in UP.Partners

The inaugural investment of Alaska Star Ventures amounts to $15 million and is directed towards the first venture fund established by Los Angeles-based UP.Partners. This fund, totaling $230 million, concentrates on early-stage mobility technologies.

Additional investment in the UP.Partners fund comes from several prominent entities, including Woven Capital (Toyota Motor’s investment arm), Standard Industries, Hillwood, and OSM Maritime.

Strategic Collaboration with UP.Partners

Alaska Airlines intends to collaborate closely with UP.Partners regarding its initial investments. While future consideration may be given to investments in other sector-specific funds, the primary focus will be on direct investments in individual technologies, according to Diana Birkett Rakow, VP of public affairs and sustainability at Alaska Airlines.

Commitment to Net-Zero Emissions

This investment strategy is directly linked to Alaska Airlines’ commitment to achieve net-zero carbon emissions by 2040. The airline has also established a goal to become the most fuel-efficient airline by 2025.

Furthermore, Alaska Airlines aims to halve its ground services emissions by 2025, targets announced in April as part of its participation in Amazon’s Climate Pledge.

The Role of Technology in Achieving Sustainability Goals

“Recognizing the essential role of technology in reaching our net-zero objectives, we decided to create this investment vehicle,” explained Birkett Rakow. “It will serve as a catalyst for identifying, accelerating, and advancing technologies that expedite our progress.”

Focus on Applicable Technologies

Despite the growing investment in clean technologies, Birkett Rakow emphasized that establishing a fund will enable the airline to pinpoint technologies that are “truly applicable” to its operational environment and can be implemented within the next three to ten years.

Why UP.Partners?

Alaska Airlines chose to invest in UP.Partners’ inaugural fund due to the extensive experience and expertise of its founders, Ben Marcus and Cyrus Sigari.

Marcus and Sigari previously founded jetAVIVA in 2006, a jet sales services company, and AirMap in 2014, a traffic management system for unmanned aircraft.

Benefits of the Partnership

The airline anticipates gaining valuable insights into the evolving technology landscape and contributing to the development of technologies suited for its operations. UP.Partners will also provide advisory services and potentially co-invest with Alaska Star Ventures.

Areas of Technological Focus

Indicating potential future investment areas, Birkett Rakow referenced the airline’s roadmap, which outlines five key areas: enhancing operational efficiency, modernizing the fleet, utilizing sustainable aviation fuels (SAF), exploring novel propulsion technologies, and implementing credible carbon offsets.

Beyond SAF and Propulsion

While SAF and alternative propulsion systems like batteries or hydrogen fuel cells often receive significant attention, Birkett Rakow stated that the fund will also explore technologies that improve efficiency and reduce unnecessary fuel consumption.

Route Optimization as a Model

Alaska Airlines recently collaborated with Airspace Intelligence to implement an AI-powered route optimization system, resulting in an average reduction of five minutes per flight.

“This collaboration with Airspace Intelligence demonstrated the potential of technology to significantly improve our operating performance and contribute to our net-zero goals,” Birkett Rakow explained. “It highlighted how access to such technology can drive success and scalability.”