Alaska's Ayer: Moral CEO Departs While on Top

SEATTLE (TheStreet) -- A year ago, Bill Ayer thought he wanted to retire as CEO of Alaska (ALK) but wanted to be sure he could handle the dramatic downshifting required to leave the perpetually busy job of running an airline.

So "he took a month off to see if he could do it," said Phyllis Campbell, the airline's lead independent director and chairman of Pacific Northwest Markets for JPMorgan Chase, in an interview. "He was testing himself and the company a bit. He kind of checked out -- he took a scuba diving trip.

"It taught him that the company did fine when he was gone, and that he could do other things and enjoy them," Campbell said. She noted that Ayer was not totally out of touch, and did maintain some contact. But after saying for two years that he wanted to step down as CEO, he was more certain after a month away.

"It's always tough when a CEO steps back from being at the heart of things and retires," she said. "But he was confident this would work."

Ayer, 57, has spent 30 years at Alaska. During the last decade, after being named CEO in 2002, he oversaw a turnaround during which Alaska not only rose to become the nation's seventh largest carrier, but also, by some measures, became its most successful. In 2003, Alaska unveiled a restructuring plan, which included cost-cutting, fleet replacement and financial goal-setting. In 2011, the carrier achieved a long sought goal and generated a 10% return on reducing costs.

"The future has never been brighter than at this moment," Ayer said in a February 2011 interview. It turns out that he was, at that time, already charting his departure.

Wall Street clearly noticed Ayers' efforts. In 2011, Alaska shares rose 30%, while shares in nearly every other major airline recorded double-digit losses. Also, as the industry consolidated, eliminating various carriers, Alaska was able to climb in terms of ranking its size and visibility. Through a focus on developing the Seattle hub and a strong West Coast network, Alaska became an eminently desirable partner for global carriers as well as a frequent subject of merger speculation, which it has consistently discouraged.