Junior Achievement Alaska Business Hall of Fame Laureates: Ron Cosgrave Bruce Kennedy

Alaska Business Monthly, Jan, 2007 by Tracy Barbour

It is nearly impossible to see the "smiling Eskimo" logo of Alaska Airlines and not think of the two men responsible for the company's legendary revitalization: Ron Cosgrave and Bruce Kennedy.

Cosgrave and Kennedy saved the airline in the early 1970s from overwhelming debt and impending bankruptcy. Cosgrave, who served as chairman and CEO of Alaska Airlines from 1972 to 1979, used strong leadership, teamwork and innovation to help restore the fledgling airline to a position of profitability and respect. Though he has received much of the credit for the turnaround, Cosgrave said, Kennedy played a crucial role in the transformation. "Bruce was there all the way," he added. "I couldn't have done it without him."

LEADERSHIP UNDER COSGRAVE

In business, Cosgrave has established a track record for innovation and resourcefulness. Upon returning home from the Korean War with a Purple Heart, the former U.S. Marine Staff Sergeant started the Cruising Smack Shack. The mobile lunch wagon, which he had converted from an old milk wagon, served hamburgers and coffee outside factories, sporting events and other venues.

Cosgrave eventually operated a real estate development business with Kennedy. The company, the Northern Alaska Development Corp., provided hotel accommodations to Alaska Airlines crews ferrying equipment to the North Slope. That business arrangement led to Cosgrave's inadvertent leadership position with the airline.

"Alaska was strapped for cash, and we agreed to take stock for providing the housing for the crews," Cosgrave explained. "As a result of that transaction, which Bruce Kennedy had a lot to do with, I became director of Alaska Airlines. I was subsequently asked to come on board to solve Alaska (Airline's) financial problems. In July 1971, I started working for Alaska (Airline's) as vice president and got to know a little bit more about Alaska (Airline's) and its financial condition, which was pretty precarious."

Within a year, Alaska Airlines had stopped losing money, all the creditors had been repaid and flights were arriving on time, Cosgrave said. "In 1973, we had our first year of full profit in 16 years," he added. "It went on for another 19 years, until the Gulf War."

Cosgrave served on the Alaska Air Group board of directors until several years ago. Currently, he runs a real estate investment company, ANP LLC (formerly Alaska Northwest Properties Inc.). The first chemical engineering graduate from the University of Alaska in 1958, Cosgrave was awarded an honorary law degree from UA.

KENNEDY AT THE HELM

Kennedy became CEO of Alaska Airlines in 1979 and expanded on the success initiated by Cosgrave. Under his watch, Alaska Airlines grew from serving Seattle and 10 Alaska cities with a fleet of 11 aircraft, to serving 38 cities in six western states, Mexico and the then Soviet Union with a 60-aircraft fleet.

Alaska Air Group Inc. was formed in 1985 as a holding company, which in 1986 acquired Horizon Air and Jet America. Horizon Air amassed a 50-aircraft fleet and expanded to serve 34 cities in five western states and British Columbia. Revenues increased tenfold, exceeding $1 billion.

Through the years, Alaska Airlines and Horizon Air gained wide recognition for their consistent profitability and impressive customer service. They received Best U.S. Airline awards from Conde Nast Traveler Magazine and Zagat Survey, as well as a Service of the Year award from Inflight Online Magazine. "It was the quality and the dedication of our people that enabled us to raise service levels, placing us in top rankings nationally and globally," Kennedy said.

In 1991, Kennedy left Alaska Air Group, stating his intent to devote himself to volunteer Christian service. He immediately became chairman of Mission Aviation Fellowship (MAF), on which board he had been serving. Following that service, he has assisted with the development of the Kodiak--a modern-day replacement for the 1950s vintage light airplanes being used in missions and humanitarian travel. That challenge has been taken on by the Idaho-based aircraft designer and manufacturer Quest Aircraft Trust, of which Kennedy has served as chairman for the past six years.

"The credibility I gained from Alaska Airlines' success under my leadership has proven very useful in convincing potential donors that our little group of six or so trustees might actually be able to succeed in developing from scratch a rugged 10-place turboprop using the best available technology," Kennedy said. "Soon, our Kodiak will be in operation all over the world. This is, to me, a better measure of success than is producing profits in the commercial world--though I enjoyed that, too."

A SPECIAL AWARD

For Kennedy, being named to the Junior Achievement Alaska Business Hall of Fame is humbling. "The mission of Junior Achievement includes familiarizing young people with how business operates and what its role is in the community," he said. "Those of us who have had the good fortune to have run the race successfully need to be willing to have ourselves examined by these same young people. They need to be able to determine whether there are icons they would want to emulate in setting out on business careers of their own. The Junior Achievement Alaska Business Hall of Fame is a collection of such icons. I'm humbled to have been selected to join this gallery of illustrious Alaskans."