USAir Group Inc. dropped its second bombshell in less than 48 hours, announcing yesterday the retirement of Chairman and Chief Executive Seth Schofield, just a day after the company projected its first annual profit since 1988.
Mr. Schofield has agreed to remain until a successor is chosen by a special committee of nonmanagement directors of the board, the Arlington, Va.-based company said.
The sudden departure of Mr. Schofield, who worked his way up from baggage handler to CEO over 38 years, caught industry watchers off-guard yet certain that his absence will create a void.
"It's a loss for USAir," said Michael J. Boyd, president of Aviation Systems Research, a consulting firm in Golden, Colo. "It's rare to have a chairman who understands what the cargo bin is, what a ticket counter is and what a board room is.
"To understand how all those three things work is a real asset. So whatever the reason for his leaving, he's not leaving with a cloud over his head."
In a company statement, Mr. Schofield, 56, didn't provide a reason.
But there were several factors that could have prompted his decision to retire. Mr. Schofield navigated the airline through the worst financial crisis in its history -- the company lost about $3 billion over six years, including $700 million last year alone.
USAir suffered from intense fare wars, two crashes in 1994 and apparently intractable labor negotiations, which broke off earlier this summer. Mr. Schofield also leaves as the airline plunges into a restructuring, in which it has already cut about $400 million in annual expenses, with plans to slice $100 million more.
But then, Mr. Boyd said, the CEO may have just had enough. "One thing it could be is, here's a man who finally turned an airline around, and he says, 'Hey, I've done it, let's give it to someone else, I'm going fishing.' Being chairman of USAir is really not a great job."
Industry experts have speculated that Mr. Schofield may be succeeded by USAir President Frank Salizzoni or that an outsider might be tapped for the post, such as Bob Baker, a top executive at American Airlines.
The announcement was made after the stock market closed. USAir shares rose 87.5 cents yesterday, to $10.625, on the New York Stock Exchange.
The committee search for Mr. Schofield's successor will be chaired by Mathias J. DeVito, chairman of the board of the Rouse Company. Mr. DeVito could not be reached late last night.
But in a statement, Mr. DeVito said, "In Seth Schofield's extraordinary 38-year career with USAir, he has been an outstanding leader in every position he held, most importantly, during the past three years when he presided over major changes at USAir and guided the company through some of the most difficult times in the history of the airline business. With his management-driven cost reduction program, Seth has laid the groundwork for USAir's future. The job of the special committee is to find a person who can take what Seth has built and move the company into a position of competitive leadership for the 21st century."