Wednesday, December 16, 2015

SkyWest slates open house amid CEO transition

SkyWest CEO Jerry Atkin is retiring after more than 40 years at the helm of the St. George-based regional carrier. An open house is scheduled Friday to celebrate his pending retirement.



When SkyWest CEO Jerry Atkin landed a job with his relatives’ budding airline more than 40 years ago, he had no background in aviation and had only been on an airplane twice to interview as a prospective employee with an MBA and accounting degree.

Atkin’s ancestors helped pioneer Southern Utah but when it came time to go to college, he left his small home town with no real expectation of ever moving back.

“I had no idea that there’d be a way or a reason to come back to St. George, not because I wouldn’t have liked to, but there wasn’t a lot to come back to or a lot of things to do back then,” he said.

Then his uncle, Ralph Atkin, called and said, “I’ve got this little airline going down here. It’s really little and it’s got a little messed up, but I wish you’d come back and help me with it,” he said. “And I (thought), ‘Maybe I can go back to St. George.’”

On Friday, SkyWest will celebrate Atkin’s tenure and pending retirement with an open house at The Falls Event Center on Mall Drive.

Atkin was the youngest CEO to direct a regularly scheduled airline when he took over the reins from Ralph in 1975, two years into the company’s history. He has since been recognized as the longest-tenured CEO in the industry.

“We went from a little rinky-dink outfit that people just made fun of, to we are by far the most capable regional to any major carrier that we choose to work with or that chooses to work with us,” Atkin said last Thursday. “This has just been a lifetime experience for me. It’s just been absolutely fantastic. … An amazing journey of a lot of accomplishments (with) a lot of people who themselves have developed a lot. ... So it’s really been a blast.”

SkyWest’s planes now fly routes in every state every month except for Alaska and Hawaii. The airline provides St. George residents direct access to Delta and United airlines routes and it employs some 28,000 people and $3 billion worth of airplanes, according to Atkin and SkyWest spokeswoman Marissa Snow.

“We carry one out of every 11 passengers that get on a flight in the United States that are not going international,” Atkin said.

“We’ve really hit some big marks, not that I care about the bigness part of it, but we are the biggest regional in the world. One of the biggest fleets of airplanes in the world,” he said. “(Our employees) have achieved that together.”


Sid Atkin
From small beginnings

SkyWest was forged in Ralph Atkin’s love of flying.

“He and some guys wanted to buy an airplane together because it was a little less expensive to get flying lessons if you owned the airplane instead of paying rent to somebody,” Jerry Atkin said.

When Ralph called, Jerry was so excited at the prospect of returning to St. George he didn’t give any thought to state of the company’s books.

“It’s probably a good thing I didn’t,” he said. “An airline sounded interesting to me. … (But) when I came, I thought I’d made the mistake of a lifetime because we couldn’t pay our bills, (the company) was broke. It looked hopeless. We couldn’t sell it.”

But the company’s 15 employees had a passion for flying, and that was infectious, he said. As they worked together to save the company and then make some progress, Atkin learned to fly and has since logged 45 hours in the air. But he stopped short of getting a license because he didn’t want the temptation of thinking he could do whatever he wants, he said.

Getting bigger

After a little over a decade, SkyWest became a publicly traded company in 1986. The decision was born of the need to come up with more money – “flying airplanes is pretty capital intensive … and none of us had deep pockets,” Atkin said.

But SkyWest was still small and unlikely to draw investors. It had started with small planes that cost about $100,000, then made the leap to a plane worth $1.3 million in 1979. Then came an opportunity to acquire a competitor’s fleet with planes worth more than $3 million, Atkin said.

“But it needed a flight attendant. I mean it was a real airplane, relatively speaking,” he said.

So SkyWest dealt with the challenges of going public, including getting a “high-quality auditor” to go back through the company’s books, and establishing a corporate board with experienced members who weren’t family members. The public offering basically funded the new, larger twin-turboprop airplanes that were part of SkyWest’s fleet up until this year.

The public offering “also was a way people could put their money in if they wanted, and then if they wanted to get out there was a way to get out” – something difficult for a private company to manage.


SkyWest CEO Jerry Atkin, left, visits with one of the airline's pilots in Chicago earlier this year. 

Benchmarks

SkyWest’s advances included occasional happy accidental accomplishments that could easily be described as luck.

Atkin’s first challenge was to help save the company, he said. As the company’s fleet grew and SkyWest went public and the company gained leadership stronger than it knew it had, it found an opportunity to partner with Western Airlines, well aware that the company was small and financially vulnerable.

“We knew we were taking a bit of a risk,” Atkin said.

But shortly afterward, Delta and Western agreed to a merger, and the Western brand was discontinued in 1987.

“It was the coolest thing we could have imagined,” Atkin said. “There could not have been a better outcome for us.”

Then small 50-seat jets became available to regional carriers in the industry and SkyWest acquired 10 worth $16 million each. The first four were delivered in 1994.

In the late 1990s, SkyWest made a “cold call” to United to discuss a potential feeder relationship. The resulting partnership gave SkyWest “the largest growth of a regional carrier ever in history,” Atkin said. The company’s size doubled overnight.

Acquisitions in 2005, 2010 and 2014 were just a continuation of what by that point had become a trend for success.

As the new CEO-in-waiting, Chip Childs, prepares to take Atkin’s place, Atkin said he’s only planning to spend more time with his family and to continue serving SkyWest as chairman of the board, which meets quarterly in St. George and Atlanta.

“I have lots of interests, but I’m not going to take on any new whatevers for at least a year,” he said. “But I’m not going to be sitting home watching TV, I can tell you for sure.”

If You Go

What: Reception honoring Jerry Atkin

When: Friday, 6 to 8 p.m.

Where: The Falls Event Center, 170 S. Mall Drive, St. George

Information: Contact SkyWest Corporate Communications, (435) 634-3553.

Story and photos: http://www.thespectrum.com

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