Bill Ayer of Alaska Airlines Explains Management Philosophies of a Successful Aviation Business

Bill Ayer, Chairman of the Board of Alaska Air Group, was a featured speaker at the FAA/EASA International Safety Meeting in Cleveland on June 13th.  He discussed the management philosophies that have allowed his carrier to survive and thrive, and he talked about the way that they have embraced technology shifts to support safety improvement.  But he opened his address by explaining, simply, that “Customers are very important to us.”

In Alaska, everything flies.  There are few roads, relative to the landmass, so air service is vital to Alaska’s success.  And this has helped to shape Alaska Airlines as a service provider that is considered to be a a vital part of the Alaskan community.

According to Ayer, “Business is all about people.”  He explained that keeping their staff motivated to work together has been a key strategy at his air carrier.  “Alaska relies on its employees for its success.  Leadership and management helps, but you have to have a committed bunch of people who come to work with a smile on their face.”  “Airlines,” Ayer explained, “are the ultimate team sport.”

William Ayer, Chairman, Alaska Air Group

William Ayer, Chairman, Alaska Air Group

Aviation is a highly competitive industry.  In 1978, Alaska was the 28th largest air carrier.  Today, they are 7th.  In going from 28th place to 7th, Ayer explained, Alaska has not passed any competitors.  Instead, all of the other carriers either merged or discontinued service.  Proudly, Ayer reminded the audience that Alaska Air is the only remaining legacy carrier in the United States that has not filed for bankruptcy protection in its history.

Part of what has helped Alaska remain successful has been a focus on expanding their route system to the rest of the country, and modifying their business model to be more like a low cost carrier.  Ayer stressed that they did this without losing their focus on customer service.  In fact, Ayer bragged that for the fifth year in a row, they had received the JD Power award for customer service among legacy carriers.

Ayer opined that businesses that grow too fast, lose their ability to remain in touch with the customers, and they also lose their nimbleness.  Under his leadership, Alaska Air has grown, but they have always moderated their growth so that they could handle it without an inordinate bureaucracy.  This became important when Alaska was looking to weather the economic storms of the past decade.

In the late 90s, oil prices were low, the economy was good, and competition in Alaska’s markets were less competitive.  Moving into the 21st century, there was a tendency in many companies to believe that the 90s were the norm, and that industry would simply return to that profitability (eventually).  Alaska was successful because they recognized that the 21st century was a new dawn, and required new management philosophies.  Alaska’s  philosophies included:

  • Get the right people on the bus: Alaska had a great Board that held the airline accountable, and that set realistic goals with a recognition of what the economy was going to be like, going forward.  They did not sugar-coat the problems, but they retained their optimism about what obstacles the airline could overcome.
  • Create sense of urgency: Do not wait for the perfect plan.  Some people change, when the see the light, but others wait until they feel the heat.
  • Work on only one or two big things at a time: do not take on too many objectives.  This year, Alaska is trying to make flying ‘hassle-free.’  And that is the sole focus.  By focusing on one or two tasks, they are able to get things done.
  • What you measure, gets done:  have metrics and make sure you are achieving your goals
  • Focus on what you can control over the long-term
  • Be totally and completely customer focused
  • Don’t confuse being popular with doing the right thing, at least in the short term:  when you have a crisis, making tough calls is what leaders do

Ayer explained that in his opinion, safety is a Board level initiative.  It needs to permeate an organization from the highest levels.  Ayer insisted that  “Nothing, including economics, will ever get in the way of safety” at his organization.

As a consequence, Alaska has been an early adopter of virtually every safety initiative over the years.  They have been very focused on technologies that can improve safety.  Because of weather conditions in Alaska, improved technologies can be real safety improvements for his airline.

Alaska took an interest in advancing NextGen technologies.  They have been working on developing new Required Navigation Performance (RNP) approaches to Seattle – the program is known as Greener Skies.  This is leading to less fuel burn, less noise, and less congestion, with no adverse impact to non-equipped users of the airport.  Most importantly, they have found that use of glide slopes and RNP procedures in lieu of non-precision approaches provides better assurance of a safe landing.

Ayer announced that the new approach has just been implemented for testing in Seattle.  This was accomplished through collaboration with a wide array of partners, including air traffic control, the airport, and the political leaders.

Alaska hopes that the successful collaboration in Seattle will provide a model for implementing the same sort of improvements at other airports.

NextGen technologies are not the only cutting-edge aviation subject area that has drawn Ayer’s attention.  Ayer predicted that “the next chapter, with the widespread use of SMS: turning data into action … will further raise the safety bar.”

About Jason Dickstein
Mr. Dickstein is the President of the Washington Aviation Group, a Washington, DC-based aviation law firm. He represents several aviation trade associations, including the Aviation Suppliers Association, the Aircraft Electronics Association, the Aircraft Fleet Recycling Association and the Modification and Replacement Parts Association.

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