SEATTLE -- Bill Ayer announced Thursday he's stepping down as chief executive of Alaska Air Group, to be replaced by his right-hand executive, Alaska Airlines President Brad Tilden.
Although Tilden will officially take over in May, he's effectively in charge right away. And though Ayer will remain chairman for now, that's only for a short-term transition period.
"Brad will officially assume the title of CEO of Alaska Air Group, Alaska Airlines and Horizon Air at our annual shareholder meeting on May 15," Ayer said in an internal memo to employees. "He's in the left seat now, though, and in command."
"My tenure as chairman will be up to the board, but it won't be long-term," Ayer added. "Other than for a transition, my belief is the new CEO shouldn't have the old one looking over his shoulder.
"The time is right for me to pass the torch," he said.
Signaling confidence in financial prospects and the stock price, Alaska also announced a two-for-one stock split next month and the board authorized a $50 million share buyback. Alaska Air Group shares rose almost 3 percent on the news.
Ayer has spent 30 years at the company -- first at Horizon Air, the regional jet subsidiary, and then Alaska Air, becoming chief executive in 2002.
In the decade since, airlines have been under enormous pressure to slash costs.
Though Alaska had built a reputation for personal service and established customer loyalty, Ayer had to to cut jobs, outsource baggage handling and add bag fees. The airline is now a much-lower-cost operation.
But Ayer is credited with achieving that without going through bankruptcy and without the heavy cuts seen at some bigger airlines, most recently at American Airlines.
In the internal memo, Ayer gave credit to the airline's employees for helping him successfully navigate the financial pressures of the past 10 years.
"A small company feel makes it easier," Ayer said. "I'm certainly proud of how we're positioned today."
He said "low fares and low costs are required for long-term profitability and growth" and that the airline has been unafraid "to implement important changes even when they're really hard or unpopular."
And Ayer said he expects no let-up in the push for cost savings and in the challenges facing the industry.
"We'll continue to face competitive pressures, a weak economy and high oil prices, so change will be a constant," Ayer said. "The only thing we can't change is facing up to realities and executing a business plan with a long-term perspective."
Ayer said Tilden "has been my right-hand person as we made the series of important but often difficult decisions over the past 10 years. He's helped drive the plan forward and is responsible for much of the success we're enjoying today."
For his part, Tilden told employees that he'll continue the course set by Ayer.
"As to what may change with regard to my leadership style as I move into the CEO role, I would say 'not much,"" Tilden said in the memo. "We'll do a lot of what we've been doing."
Ray Neidl, an airline analyst with the Maxim Group, reiterated his buy recommendation on the stock in a note to investors.
"We believe Mr. Tilden may continue the Alaska Air culture of solid growth and profitability, the ability to adjust to developing market and economic conditions and the maintenance of good relationships with their employees and customers where the company is highly regarded by both groups," Neidl wrote.