OBJECTIVE:
Lead team efforts in formulating stategies, turning plans and intentions into reality.
EDUCATION
Bachelor of Business Administration - City College of New York, 1965
Master of Business Administration in economics and finance - New York University, 1967
ALASKA AIR GROUP AND ALASKA AIRLINES, INC. Seattle, WA
Former Chairman, President and Chief Executive Officer of Alaska Air Group and Alaska Airlines, Inc. Restructured and positioned a billion dollar airline business from one whose viability was threatened to a profitable dominant competitor on the West Coast.
Alaska Air Group with consolidated revenues of $1.3 billion, is the holding company for two operating subsidiaries, Alaska Airlines and Horizon Air Industries each accounting for about 80% and 20% of total revenues, respectively.
Through 1991, the company achieved 19 years of consecutive profitability. The company's past success relied on offering an exceptionally high level of service resulting in a corresponding high cost structure. Beginning in 1991 it became evident that this strategy was inconsistent with fundamental changes unfolding in the industry and in our specific marketplace.
In particular, pricing in the airline business was being driven by the strategies of financially troubled airlines, the ever changing mix of new low cost carriers and the growing presence of Southwest Airlines and its imitators. Since these drivers could not be viewed as temporary phenomena, this meant that low prices would be a long term competitive reality unlike past sporadic "price wars". As a result, major changes had to be made quickly if the company were to survive. Repositioning the company followed an approach highlighted by the following elements:
Determine A Long Term Business Philosophy
It was determined that the company must be positioned to be price competitive while continuing to offer customers superior service.
Define A Cost Structure Consistent With This Philosophy
This was accomplished by examining in detail whether a program, activity or function would be instituted if it did not currently exist. If not, it was eliminated. When uncertain, it was also eliminated unless the action was irreversible and the long term consequences of being wrong were unacceptable. As a result of this approach, about $100 million in permanent cost reductions were implemented in less than three years.
Reduce Capital Commitments
Three major actions were taken: canceled a contract for 20 MD-90 aircraft valued in excess of $600 million, without penalty; re-negotiated lease terms on 20 B-737-400 aircraft producing
savings in rental expense of $70 million over ten years; and canceled the planned construction of two aircraft maintenance facilities, avoiding nearly $100 million in additional capital commitments
Conclude Competitive Labor Contracts
Five year agreements were reached with mechanics, pilots and flight attendants. The new contracts provided for productivity improvements, wage increases where appropriate and no wage reductions, other than a 5% percent reduction volunteered by pilots in lieu of a lower pay scale for new hires.
Fully Utilize Employees, Equipment and Facilities
From 1993 to 1994, the number of employees per flight declined 12%; seat capacity per employee increased 22%; and customers per employee increased 33%. Daily utilization of aircraft increased 17% per plane over 1991, the last year representing a traditional business approach. In combination with cost reductions and other productivity gains, unit costs dropped 16% for the combined Alaska Airlines and Horizon operations. By the end of 1995 unit cost are expected to drop to $.078 per seat mile, a 24% reduction from 1991.
Communicate Purpose, Means and Reasons For Actions
Beginning in 1992, an ongoing communications campaign was launched, delivering a consistent message that the interest of investors, customers and employees must be satisfied simultaneously. What had to be done, how and why, were communicated to all audiences through media acquisition of Horizon Air in 1986 to provide increased market participation in he Pacific Northwest.
Oversaw the addition of Jet America, a low cost airline providing East-West service with 10 jets. Jet America was eventually merged into Alaska and its aircraft assigned to west coast flying.
Proposed and oversaw the expansion of service to the Mexican resort destinations of Puerto Vallarta and Mazatlan in 1988. Over the next three years, Mexican related travel grew to 15% of Alaska's traffic.
This promotion recognized the influence and effectiveness of the planning function. Subsequently responsibility for overseeing the legal department was also assigned to me.
After deregulation of the airline industry, Alaska expanded its route system from serving eleven cities in 1979 to serving 30 by the end of 1985. Revenues increased from $98.2 million to $433.2 million. Net earnings increased from $3.0 million to $26 million. The evaluation of expansion alternatives, selection and implementation became a continuous process. My responsibilities included heading task forces consisting of operational and marketing heads to implement expansion plans.
Additionally, beginning in 1982, I led a two year team review of our current and future aircraft needs, taking into account economic and operating characteristics of alternative aircraft. The study resulted in the placement of an initial order for six MD-80 aircraft from McDonnell Douglas.
The nature of the planning responsibilities demanded a growing role, interacting across all areas of the company. In addition, I directed evaluations which led to retiring a fleet of four engine B-720 aircraft for three-engine B-727-200 aircraft.
Held responsibility for schedule planning, pricing and profit planning. The department played three primary roles: produce economic analyses to identify available alternatives; provide staff support for those of different viewpoints; and coordinate these planning activities in a timely manner. During my first year, I installed a profit planning process to establish earnings targets and provide a framework for changes.
Adopting a method suggested by IBM, I also introduced a strategic planning process. Three to five day sessions were held several times a year. The approach relied on a few basic rules: no rank; the identification of obstructions to the company's success; participation designed to ensure that words, terms and statements had the same meaning for all; and unanimous agreement was required by the group. This genuinely participative approach produced focused strategies and commitment toward their implementation. The process and sessions continue today.
This promotion placed me in the regulatory affairs department reporting to the manager of route proceedings. I held the lead responsibility for developing evidence and testimony in route and rate-making proceedings.
June 1967-Dec.1971-Economics Analyst
(Military service, April 1968-Dec.1969)
Held responsibility for special analyses, including cost and pricing and evaluations related to aircraft, markets and levels of service.
International Air Transport Association-New York, NY -
June 1961-March 1966
Past Board member-Alaska Chapter of The Nature Conservancy
Raymond J. Vecci fifty-three, is married, with two sons, ages 15 and 17.
Sept. 1990-Feb. 1995
Chairman, President and Chief Executive Officer
(Progressive title changes between Sept. 1990 and May, 1991)
ALASKA AIRLINES, INC.- SEATTLE,WA -
Jan. 1986-Sept.1990
Executive Vice-president & Chief Operating Officer
Reported to Chairman and Chief Executive Officer
Held overall responsibility for Alaska Airlines' flight operations, maintenance, all ground activities, in flight catering, flight attendant services, marketing and the planning functions. The following highlights some of the achievements in this position:
By 1989, the combined Alaska and Horizon operations produced record earnings of nearly $43 million. Alaska's service was recognized in the marketplace as superior to competitors.
Evaluated and negotiated the acquisition of Horizon Air in 1986 to provide increased market participation in he Pacific Northwest.
Oversaw the addition of Jet America, a low cost airline providing East-West service with 10 jets. Jet America was eventually merged into Alaska and its aircraft assigned to west coast flying.
Proposed and oversaw the expansion of service to the Mexican resort destinations of Puerto Vallarta and Mazatlan in 1988. Over the next three years, Mexican related travel grew to 15% of Alaska's traffic.
April 1979-Dec. 1985 Vice President-Planning
Reported to Chairman and Chief Executive Officer
June 1976-July 1979 Staff Vice President Planning and Regulatory Affairs
Reported to President and Chief Operating Officer
Jan. 1975-June1976 Assistant Vice President-Planning & Regulatory Affairs
Reported to Sr. Vice President-Finance
United Airlines-Chicago, IL -
Dec. 1971-Dec. 1974 - Senior economic Analyst
Organizational Affiliations
Past member of Board of Advisors-Resource Center for the Handicapped
Current member Board of Advisors Albers School of Business and Economics of Seattle University
Personal
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