Alaska Air Group, Inc. - Interview With William S. Ayer, Chairman And CEO
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William S. Ayer is Chairman and Chief Executive Officer of Alaska Airlines and Alaska Air Group, Inc., the parent company of Alaska Airlines and its sister carrier, Horizon Air. At Alaska Airlines, Mr. Ayer, 54, leads the nation's ninth largest airline, with 10,000 employees, 59 destinations and more than 110 aircraft.
A 27-year aviation veteran, Mr. Ayer began his career with Alaska in 1995 as Vice President of Marketing and Planning. Since then he has held the posts of Senior Vice President of Customer Service, Marketing and Planning, President and Chief Operating Officer. In 2002 he became the carrier's Chief Executive Officer, and in May 2003 he was appointed Chairman. Prior to his tenure with Alaska, Mr. Ayer spent 13 years at Horizon Air, where he held a variety of marketing and operations positions of increasing responsibility.
Immediately prior to joining Alaska, Mr. Ayer was Horizon's Senior Vice President of Operations. Before joining Horizon, Mr. Ayer founded and was President of Air Olympia, a commuter airline serving Washington state. He also served as a regional manager for Piper Aircraft Co. Mr. Ayer is a member of the board of directors of the Seattle branch of the Federal Reserve Bank of San Francisco, Puget Energy, the Museum of Flight and Angel Flight West. He also serves on the University of Washington Business School Advisory Board. A graduate of Stanford University with a bachelor's degree in economics, Mr. Ayer earned a master's degree in business administration from the University of Washington. He holds commercial and flight instructor pilot certificates with instrument and multi-engine ratings.
TWST: Please start with a brief history of Alaska Air.
Mr. Ayer: The parent company and the publicly traded company is Alaska Air Group (ALK), and we have two principal subsidiaries, Alaska Airlines and Horizon Air. Together we provide passenger air service to about 24 million passengers a year. And we also provide freight and mail service primarily to, from and within the state of Alaska and the West Coast. Looking at the two subsidiaries separately, Alaska is a 77-year-old company at this point. We started in the state of Alaska in 1932; we grew to become a carrier flying pretty much up and down the West Coast. We added Mexico to the network in the 1980s, and then following 9/11, the most dramatic change to our route map was going to east/west out of Seattle.
Our major cities are Seattle, obviously, and Anchorage, and also Portland, the Bay Area and the L.A. Basin. We operate an all-737 fleet, and that's a new fleet over the last couple of years. We moved out of the MD-80s, so we're all 737s. And in terms of what the company is known for, I think it's customer service and innovation. We were the first airline to offer reservation sales over the Internet back in 1995. We were the first to have a wide-scale deployment in our airports of kiosks and offer Web check-in to our customers. And more recently we have been developing what we call the "airport of the future" which we opened up in Seattle here a couple of years ago, which is a sort of a non-ticket counter approach. It's a flow-through design for customers to get their boarding pass if they didn't get it at home and then basically flow through the process, checking bags and getting on through security. We have done that both in Anchorage and Seattle, and it's been met with great praise from our customers. It really speeds up the process and lets them stay in control of the check-in. The airport process can be a stressful thing for people, so we try to understand our customers' point of view and design things that work really well for them.
Then if we look at Horizon real quickly, Horizon is a 27-year-old company; it was founded here in Seattle in 1981. It's a wholly owned regional, which there aren't many of. It has a strong, separate brand. Most of the major carriers, if they've acquired regional carriers, they've just made them XYZ express - they painted the airplanes like their own, and they haven't kept a separate brand. In Horizon's case, we kept it separate because it already had a strong brand before it was acquired by Alaska Air Group. Horizon operates Q400 turboprops, they're 76-seat airplanes, and regional jets, which are 70-seat aircraft. And its strong cities are Seattle and Portland. Horizon has had recent growth into California, Northern and Southern California, and some of that is substituting for larger Alaska airplanes with smaller airplanes because that makes more economic sense. All told, we have about 13,000 employees between the two companies.
TWST: What's the size of your fleet today for both subsidiaries, and how many cities in total do you serve?
Mr. Ayer: Alaska has 116 airplanes and Horizon has 55, so 171 airplanes in the Air Group fleet. And together the two airlines serve 95 cities; the break out is 62 for Alaska and 47 for Horizon, and 14 of that the two airlines serve together.
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