Alumni Spotlight: Bill Ayer, Former CEO Alaska Airlines

While studying for his MBA at the University of Washington’s Foster School of Business, Bill Ayer received some advice that would propel him throughout his life, and his career.

“Get yourself a job that gives you exposure to the information flow … where people need you and you need them,” Ayer was told.

The former CEO of Alaska Airlines took this guidance to heart. After earning his undergrad degree at Stanford University with combined studies in economics and human biology, Ayer considered a career in medicine. Inspired by his father, a private pilot, he decided to combine his love for aviation with his business training.

“I was looking for a good program and I was looking for a little change in geography and Seattle seemed like a great place,” Ayer recalls of his decision to attend the Foster School. Having grown up in the San Francisco Bay Area, Ayer had a great love for the outdoors, and the campus’ setting appealed to him.

Bill Ayer

Bill Ayer

He earned his MBA in 1978. Of his time in the program he said, “Any experience like that is a combination of the classroom learning and the time you spend with your fellow students… [Foster’s focus on] team project work is very important.”

One of these projects for Ayer was a business plan for a mock airline. Little did he know that this would shape his future.

Upon graduation, he took a position with the Piper Aircraft Company in a role as sales representative for the West Coast region. Though the Pacific Northwest is a hub of the development of the commercial jet industry, the city of Olympia lacked air service. This inspired Ayer to quit his job at Piper and set out to fill this niche.

The nascent airline, Air Olympia, operated two eight-seat crafts, and offered daily flights between Olympia, Spokane and Yakima.

Ayer recalls the quirks of starting an airline from scratch, including filling every role from pilot to ticket attendant. The idiosyncrasies of the company were numerous. “We didn’t have that many passengers, so you really got to know them…There were some quirks about our passengers that provided comic relief.”

Air Olympia stayed in business for two years. Ayer recalled, “We didn’t go broke, but we probably would have if we’d stuck with it.” He then proceeded to a 13 year tenure with Horizon Airlines.

In 1995, Ayer took a position with Alaska Airlines as vice president of marketing. The next decade would prove to be one of the country’s most challenging in many sectors, but the airline industry took a particularly drastic hit after the events of 9/11.

In the landscape of global airlines, Alaska is unique. It operates on a small scale relative to its competitors, and its service is solely focused on one region. Also, it has avoided mergers like many of its competitors, in addition to not allying with other airlines. Economic analyst George Hamlin said of Alaska, “They seem to be running a business, rather than an airline.”  The company is a leader in industry landmarks such as customer satisfaction, profitability, and on-time arrival.

It was under Ayer’s leadership that Alaska Airlines rose to the challenge of becoming an example of how to thrive out of hardship. When Ayer assumed the CEO position in 2002, Alaska had seen not only a major decrease in business, but also the fallout from a tragic crash in 2000 off the coast of California. The accident exposed extreme failures in maintenance that needed to be addressed.

Ayer brought in a number of consultants who would become allies in his struggle to reform the company, including Oren Smith, head of Starbucks, and Jim Senegal, founder of Costco.

A Wall Street Journal article noted, “One idea that came from these brainstorming sessions was to pick a new measure of success. Usually, airlines focused on the number of new markets, or the number of new planes or passengers to justify debt-financed investment. Alaska latched on to a different measure: cost per available seat mile, a standard efficiency measure of what an airline spends to do business.”

With this back-to-basics approach, Bill Ayer was able to rescue the ailing company. He retired as CEO in 2012. Ayer currently serves on the Board of Regents at the University of Washington, and is the director of the Museum of Flight. Ayer is also a pilot with Angel Flight America, an organization which offers air travel to economically disadvantaged patients who need assistance in reaching their treatment locations.

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