Alaska Air Group’s board announced Monday that Brad Tilden will retire as Alaska Airlines’ chief executive at the end of March after eight years leading the company.
Tilden, who turns 60 next month, will continue to serve as chair of the board. He will be succeeded by his second-in-command, Ben Minicucci, 54, Alaska Airlines’ president and also a member of the Alaska Air board.
The leadership change comes at the most stressful time in two decades for the airline, with financial losses mounting due to the pandemic-driven airline downturn.
Earlier this month, Alaska reported a quarterly net loss of $431 million and said it expects to cut its workforce to between 19,000 and 20,000 next year, down from 23,000 at the beginning of this year.
In a statement, Minicucci expressed confidence in getting through the crisis.
“The way in which our employees have navigated through challenges is truly inspiring – and the last nine months is no exception,” he said. “I’m excited and optimistic about our future as we continue this journey together.”
Tilden in a statement insisted that, despite the coronavirus crisis, “Alaska is on a solid trajectory.”
“Now is the time to position Alaska for future growth, and now is the time to move forward with this long-planned transition,” Tilden said.
Tilden is a nearly 30-year veteran of the Seattle-based carrier. He joined Alaska Airlines in 1991 from accounting firm Price Waterhouse and nine years later was promoted to chief financial officer. He was appointed president of the airline in 2008 and became CEO in May 2012.
He has managed the airline against tough competition from low-cost carrier Southwest and then an aggressive push into its Seattle hub by Delta Air Lines.
Alaska has retained its leading share of passenger traffic at Seattle-Tacoma International airport and grown significantly. The latest major expansion, the $4 billion acquisition of San Francisco-based Virgin America in 2016, greatly strengthened Alaska’s West Coast network.
Port of Seattle Executive Director Stephen Metruck said Monday that Tilden “led Alaska Airlines through an extraordinary period of growth” that “benefited the region and state by unlocking routes to new destinations and boosting Washington’s tourism economy.”
Alaska for years marketed itself as standing apart from its larger competitors with its high-quality service. Faced with the reality that passengers now choose flights primarily based on fares, Tilden during his tenure has transformed the airline into a low-cost carrier while still attempting to retain the reputation for warm service.
New York-based analyst Bob Mann said Wall Street pushes airline management inexorably for reduced costs against the wishes of both employees and passengers.
“It’s a tough business to be in as a high-quality carrier competing with the lowest-cost guys,” said Mann, adding that Tilden has consistently delivered “the best financial performance in the industry.”
Last year, in a key metric used to compare airline costs, Alaska’s “cost per available seat mile, excluding fuel and one-time items” was 8.7 cents, compared with 9.62 cents at Southwest and 10.52 cents at Delta.
Navigating the financial and competitive pressures in recent years, Tilden repeatedly asserted his intent to keep Alaska independent, dismissing talk that the airline might have to merge with a bigger carrier to survive.
Mann said that while Tilden’s departure as CEO is “a watershed event in Alaska’s history,” Minicucci has proven himself leading Alaska’s flight operations.
“The company is in good hands,” said Mann. “It’s been very well managed.”
Tilden achieved Alaska’s financial performance by squeezing costs out.
He focused on operational efficiency and kept a tight rein on pay increases. In 2018, he added ancillary revenue by introducing bag fees, charging extra for exit-row seats and eliminating fee waivers for itinerary changes.
Alaska also introduced cheaper, no-frills, non-changeable tickets for seats at the rear of the plane.
The 2016 acquisition of Virgin America was done to head off competitive threats, including a potential West Coast expansion by New York-based low-cost carrier JetBlue.
Minicucci led the integration of Virgin, joining the separate ticket reservation systems, merging the employee seniority lists, and introducing Airbus jets into Alaska’s fleet for the first time.
While merging the operations of two airlines is very complex and sometimes goes badly, the Virgin integration with Alaska was remarkably smooth.
“Alaska did an excellent job,” said Mann. One hanging issue from that acquisition is whether to get rid of all the Airbus jets and revert to an all-Boeing fleet.
The company has already made clear it will not keep the smaller Airbus A319 and A320 aircraft, but may retain the longer-haul, larger A321neos.
“That will be one of Minicucci’s biggest questions,” said Mann.
Planning the transition
Patricia Bedient, the Alaska board’s lead independent director, said the leadership change “is the culmination of a multiyear succession planning process.”
“The board has complete confidence in Ben’s ability to lead Alaska to great success in the years to come,” she said.
Alaska Air has long had an unusually large top leadership team, with as many as half a dozen executives sometimes contributing their input on quarterly earnings calls with Wall Street analysts.
Minicucci emerged from the pack as Tilden’s No. 2 and likely successor in recent years.
Minicucci joined Alaska in 2004 as staff vice president of maintenance.
He was appointed to head up Alaska’s operations at its Seattle hub in 2007 and two years later became executive vice president and chief operating officer.
To lead the integration of Virgin America, Minicucci in 2016 was named CEO of that airline.
A Seattle native, Tilden grew up a few miles from Seattle-Tacoma International Airport and developed a love for aviation early in life. He holds a commercial pilot’s license.
A high-profile corporate leader in Seattle, he also led the airline’s philanthropic and community service efforts. Tilden serves on the boards of the Washington Roundtable, Nordstrom, Boy Scouts of America, the Seattle Chamber of Commerce and the national lobbying group Airlines for America.
Minicucci holds a master’s degree in mechanical engineering from the Royal Military College of Canada and managed military aircraft maintenance in the Canadian Armed Forces for 14 years.