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Bill Ayer
Flying for Business and Pleasure

Bill Ayer's (MBA 1978) first time in an airplane was a family trip to Disneyland when he was six, and he begged to take the connection rather than the non-stop in order to maximize his time in the air.

So began a lifelong love affair with flight for the CEO of Alaska Airlines. Ayer had his pilot's license by 17, worked through school as a flight instructor and even flew cargo at night.

In a near perfect convergence of interest, expertise and timing, the pilot earned his MBA from the UW the same year the airline industry was deregulated. Ayer jumped right in. After working a couple years in marketing for Piper Aircraft, he launched Air Olympia. The company didn't take off, but it got Ayer in the door at Horizon Air, a regional upstart that was flying similar territory with 40-seat planes.

Working closely with charismatic CEO Milt Kuolt, Ayer began integrating route systems and people from the smaller carriers that Horizon was snapping up. By the time Alaska Air Group purchased the carrier in 1986, he had become indispensable to its operations. Alaska brought over John Kelly, a calm, strategic marketing man and a great mentor, to lead Horizon into maturity. And Ayer quickly emerged as his chief lieutenant.

Kelly and Ayer grew Horizon for nearly a decade into a regional powerhouse. When Kelly went back to Alaska in 1995, he brought Ayer along. Under Kelly's leadership, they introduced innovative safety technologies, offered online reservations and e-ticketing kiosks before anyone, and began moving this legacy carrier, founded in 1932, toward a leaner, more agile model. The efforts paid off in years of profitability and growth.
And then came 9/11. The terrorist attacks of 2001 crippled the airline industry. It hasn't recovered, suffering rampant bankruptcies and $30 billion in losses—and counting.

Into the teeth of this management nightmare, Ayer took the top job at Alaska after Kelly's retirement in early 2002. "We took a unique path after 9/11," he explains. "There was shrinking demand and the immediate reaction by most was to park airplanes and lay off people, hunker down and try to reduce costs. And that was understandable, given the fragile nature of their balance sheets. We, on the other hand, had always had a relatively good balance sheet. And we decided that there was probably an opportunity."

Alaska launched its "Seattle Strategy," going to more places that people in Seattle want to go. That meant non-stops to Washington, Boston, Newark, Orlando, Miami, Denver, Chicago, and Dallas. The competition was unable to respond. And the travelers did come back. In 2005, Alaska was one of two airlines that earned a significant profit.

But that doesn't mean they are out of the woods. Even as the airline industry recovers, maintaining the low prices the market demands while meeting inexorably rising operation costs is the work of an alchemist as much as a CEO.

"This business today is all about making changes," Ayer says.

And despite the strains of such an epic transformation, Ayer has never lost his joy in flight. He still pilots his own plane whenever he can, and transports remote patients and their families to urban hospitals for treatment through an organization called Angel Flight.