Alaska Airlines and Horizon Air 2012 Annual Report Download

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ANNUAL
REPORT
2012

Table of contents

  • Page 1
    ANNUAL REPORT 2012

  • Page 2
    ...2012 was a good year for Alaska Air Group. We reported ...airline. In order to succeed, we need to execute on a solid plan for the future. We are entering the second year of a five-year strategic plan that we simply call our "Five Focus Areas." This plan focuses on all key stakeholders - our employees...

  • Page 3
    "The Company has grown from a small bush airline flying in the state of Alaska to a large national carrier." 2

  • Page 4
    UNWAVERING COMMITMENT TO SAFETY AND COMPLIANCE Safety and compliance are the foundation of everything we do. We have an unwavering commitment to safety and compliance, and we will not compromise this commitment in the pursuit of other initiatives. 3

  • Page 5
    "Safety and compliance are the foundation of everything we do." 4

  • Page 6
    PEOPLE FOCUS While airplanes and technology enable us to do what we do, we recognize that this is fundamentally a people business, and our future depends on how we work together to win in this extremely competitive environment. As we grow, we want to strengthen our small company feel while also ...

  • Page 7
    "We recognize that this is fundamentally a people business, and our future depends on how we work together." 6

  • Page 8
    HASSLE-FREE CUSTOMER EXPERIENCE We cultivate loyal customer relationships by offering an intuitive and trouble-free experience at all touch-points that is enabled by industry-leading technology and by reliable and best-in-class customer service. 7

  • Page 9
    "We cultivate loyal customer relationships by offering an intuitive and trouble-free experience." 8

  • Page 10
    ... relevant to a changing customer profile, and we will use our brand and our technology to develop a more direct relationship with our customers. We will position Alaska as the industry leader in environmental stewardship. 9

  • Page 11
    "We will use our brand and our technology to develop a more direct relationship with our customers." 10

  • Page 12
    ... will establish ourselves as the preferred airline for all travelers living on the West Coast by defending and growing Alaska and the Pacific Northwest, and by growing Hawaii and California. We are targeting 4% to 8% annual growth for the Alaska mainline operation, assuming acceptable profitability...

  • Page 13
    2013 PROXY STATEMENT

  • Page 14
    ALASKA AIR GROUP, INC. NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND PROXY STATEMENT TABLE OF CONTENTS GENERAL INFORMATION Annual Meeting Information ...Questions and Answers about the Annual... ...2012 Nonqualified Deferred Compensation ...Potential Payments Upon Change in Control and Termination ......

  • Page 15
    ... Stockholders: The Annual Meeting of Stockholders of Alaska Air Group, Inc. (the "Annual Meeting") will ... person, we encourage you to vote by Internet or phone or to complete, sign and return your proxy prior ...download the 2013 Proxy Statement and 2012 Annual Report at www.edocumentview.com/alk. ...

  • Page 16

  • Page 17
    ...employee participants in the Company's 401(k) Plans were mailed a Notice of Internet Availability of Proxy Materials (the "Notice") directing them to a website where they can access our 2013 Proxy Statement and 2012 Annual Report (the "Annual... Alaska Air Group as of the record date for the Annual ...

  • Page 18
    ... a record holder to grant proxies or to vote at the meeting. Listed below are the various means - Internet, phone and mail - you can use to vote your shares without attending the Annual Meeting. You can vote on the Internet. Stockholders of record and beneficial owners of the Company's common stock...

  • Page 19
    GENERAL INFORMATION whether they receive their annual meeting materials through the mail or via the ...by the Internet or phone is fast and convenient and your vote is immediately confirmed and tabulated. By using the Internet or phone to vote, you help Alaska Air Group conserve natural resources ...

  • Page 20
    ... of determining a quorum at the Annual Meeting and will be voted on... on or before December 6, 2012, and complied with the other...Alaska Air Group shares. Please complete and submit all proxies to ensure that all your shares are voted or vote by Internet or phone using each of the identification numbers...

  • Page 21
    ...beneficial owners to change their votes by phone or the Internet, however, in all... card by contacting the Company's Corporate Secretary, Alaska Air Group, Inc., P.O. Box 68947, Seattle,...employees who hold shares through the 401(k) plans may not vote these shares at the meeting. Can I attend the Annual...

  • Page 22
    ... request. Because shares held by employees in the 401(k) plans must be voted by the trustee, these shares may not be voted at the meeting. How can I reduce the number of annual meeting materials I receive? The Company is required to provide an annual report and proxy statement to all stockholders...

  • Page 23
    ..., whether by returning a proxy card or voting instructions or by phone or Internet, without regard to whether the proxy or voting instructions ...that the persons receiving the highest number of "for" votes, up to the total number of directors to be elected at the Annual Meeting, will be elected. With...

  • Page 24
    ... included for purposes of determining the number of shares constituting a majority of ...personal interview, mail, phone and electronic means. ...employees. Is a list of stockholders entitled to vote at the Annual Meeting available? A list of stockholders of record entitled to vote at the 2013 Annual...

  • Page 25
    ... contact: Corporate Secretary Alaska Air Group, Inc. P.O.... Box 68947 Seattle, WA 98168 We will publish the voting results on Form 8-K on or about May 24, 2013. You can read or print a copy of that report...year's annual meeting? The Company expects to hold its next annual meeting ...

  • Page 26
    ... 1999 Age - 58 Mr. Ayer has served as chairman of the Alaska Air Group Board and Air Group's two subsidiaries, Alaska Airlines and Horizon Air, since May 2003. In May 2012, Mr. Ayer stepped down from the position of president and CEO of Alaska Air Group, a role he had filled since 2003, and from the...

  • Page 27
    ... also served on the Board's Audit Committee during 2012. Ms. Blakey is president and CEO of The...Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group), Noblis, the NASA Advisory Council, and the President's Export Council Subcommittee on Export Administration (PECSEA), as well as a number...

  • Page 28
    ...media career, Mr. Knight spent ten years in finance and marketing with the Dole Foods Company. Mr. Knight serves on the boards of Alaska Airlines, Horizon Air (subsidiaries of Alaska Air Group), the San Diego Padres Baseball Club, and the Timken Museum of Art in San Diego. He is a life member of the...

  • Page 29
    ... to 1983, and CEO from 1982 to 1992. He owns Mallott Enterprises (personal investments) and is a director of Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group), a director and member of the nominating committee of Sealaska Corporation, and a director and member of the audit committee...

  • Page 30
    ... - 52 Mr. Tilden has served as president of Alaska Airlines since December 2008. In May 2012, Mr. Tilden succeeded Mr. Ayer as president and CEO of Alaska Air Group and was also named CEO of Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group). He served as executive vice president of...

  • Page 31
    ...K. Yeaman Director since 2012 Age 45 Mr. Yeaman was appointed to the Alaska Air Group Board and the Board's Audit Committee in November 2012. He is president ...Foundation. He is also a director of Alaska Airlines and Horizon Air (subsidiaries of Alaska Air Group), Alexander & Baldwin, the United ...

  • Page 32
    ... of this Proxy Statement describes in more detail the Company's executive compensation programs and the decisions made by the Compensation and Leadership Development Committee during 2012.

  • Page 33
    ... with the opportunity to earn market-level or above compensation through shortand long-term incentive plans that pay when performance objectives are met. • Annual Incentive Pay added by the Dodd-Frank Wall Street Reform and Consumer Protection Act) and the related rules of the SEC, our Board of...

  • Page 34
    ...his intention to present a proposal at the 2013 Annual Meeting. Mr. Chevedden's address is 2215 Nelson ... up to the time of the senior executive's termination, with such qualifications for an award as the ...our Company's overall corporate governance as reported in 2012: GMI/The Corporate Library, an ...

  • Page 35
    ... companies. Our proxy did not disclose the number of years that Mr. Thompson had managed ...FOR THE FOLLOWING REASONS: Alaska Air Group maintains an equity-based...the executive's employment is terminated (or constructively terminated) in connection with the ...important in the airline business. Without ...

  • Page 36
    ... awards that vest based on the degree to which certain performance measures are met would vest on a pro-rata basis up to the executive's termination date in connection with a change in control. We believe that our stockholders have been served well by our compensation structure, which places a high...

  • Page 37
    ... J. Knight, Jr. R. Marc Langland Dennis F. Madsen Byron I. Mallott J. Kenneth Thompson Eric K. Yeaman Chair Å * Chair Å Å Å Chair Å Chair Å Å Å Å Å Å * Ms. Blakey served on the Audit Committee through November 7, 2012, at which time Mr. Yeaman was appointed a member. 21 Å Proxy

  • Page 38
    ...nonauditing services they are to perform. • Review annual and quarterly financial statements and filings made with the...clear hiring policies for employees and former employees of the independent registered...accountants: • Review major financial reporting risk exposure and adequacy and ...

  • Page 39
    ... employees with significant roles in internal controls. 4. 5. Prepare the Audit Committee Report required for the annual proxy statement. Annually review... for tax-qualified retirement plans by monitoring the Alaska Air Group Pension/Benefits Administrative Committee, Defined Contribution Retirement...

  • Page 40
    ... Board committees held the following number of meetings in 2012: • Audit Committee - ...annual meeting. Safety Committee Pursuant to its charter, the Safety Committee's responsibilities include the following: 1. Monitor management's efforts to ensure the safety of passengers and employees of the Air...

  • Page 41
    ... with respect to the Company's and the charitable organization's annual revenues. Each member of the Company's Audit Committee meets ...; and (iv) neither the director nor any immediate family member was an employee or partner of the independent accountants firm within the last three years and worked...

  • Page 42
    ...organization's annual revenues, does not create a material relationship. For the purposes of these standards, "Company" includes all Alaska Air Group ...a periodic basis, the Committee solicits ideas for possible candidates from a number of sources including, but not limited to, members of the Board, ...

  • Page 43
    .... In addition, as discussed above, non-Qualified Stockholders have the ability to nominate one or more director candidates directly at the annual meeting. All candidates (whether identified internally or by a stockholder) who, after evaluation, are then recommended by the Committee and approved by...

  • Page 44
    ... the date of the annual meeting with respect to ... business and residence address, principal occupation or employment, number of shares of the Company's stock beneficially owned, ... postage prepaid, to the following address: Board of Directors Alaska Air Group, Inc. PO Box 68947 Seattle, WA 98168 The...

  • Page 45
    ... location, and other factors. The consideration of diversity is implemented through discussions at the Governance and Nominating Committee. In addition, on an annual basis, as part of the Board's selfevaluation, the Board assesses whether the mix and diversity of board members is appropriate for the...

  • Page 46
    ... lead director; however, in 2012 the Board temporarily separated the roles... of the many complexities of the airline business, the regulatory environment, and ...annual evaluation of the CEO; (c) to conduct interviews with incumbent directors annually... LEAD DIRECTOR The Air Group Board holds regular...

  • Page 47
    ...and implementation of the program. Under the program, an Alaska Air Group risk matrix has been developed and the organization's... the Audit Committee receives quarterly updates regarding the program and an annual in-person review of the program's status by the chief risk...airline business. 31 Å Proxy

  • Page 48
    ...Company has adopted a Code of Conduct and Ethics that applies to all employees of the Company, including its CEO, CFO, principal accounting officer and ...ratified, all transactions with related persons will be reviewed at least annually. The policy does not require review or approval of the following...

  • Page 49
    ... (who presides over executive sessions of the nonemployee directors) or with the nonemployee directors as a group, may write to: Board of Directors Alaska Air Group, Inc. PO Box 68947 Seattle, WA 98168 Depending on the subject matter, management will: • forward the communication to the director or...

  • Page 50
    ...services in the following categories and amounts: 2012 KPMG LLP Audit Fees for the Company's Annual Financial Statements and Quarterly Reviews(1) Audit-Related.... (2) Consists of fees paid in connection with the audit of Air Group's employee benefit plans in all years. (3) Consists of fees paid for ...

  • Page 51
    ... and KPMG, the Company's independent accountants, the Company's audited financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2012. The Committee believes that management maintains an effective system of internal controls that results in...

  • Page 52
    ... recommended to the Board of Directors that the audited financial statements be included in Alaska Air Group's Annual Report on Form 10-K for the fiscal year ended December 31, 2012. Audit Committee Charter and the Committee's responsibilities with regard to assessing the Company's internal...

  • Page 53
    ...• an annual retainer of $1,000 to non-employee directors for service on the boards of Alaska Airlines or Horizon Air; • ...2012 Annual Report filed on Form 10-K with the SEC and incorporated herein by reference. The non-employee directors do not hold any outstanding stock options. Alaska Air...

  • Page 54
    ...this benefit encourages non-employee directors to travel, thus enhancing their connection to the Alaska Airlines and Horizon Air products and services.... number of shares they own. However, in 2012, the Board of Directors revised its share ownership policy for its members. Each non-employee director...

  • Page 55
    ...; Glenn S. Johnson, president of operating subsidiary Horizon Air Industries and executive vice president of Alaska Air Group; Benito Minicucci, chief operating officer of Alaska Airlines; and William S. Ayer, chief executive officer until May 2012. The CD&A includes a discussion of the following...

  • Page 56
    ...annual performancebased awards vest based on the Company's total shareholder return relative to that of a peer group of companies. For 2012... as determined by the Alaska Air Group Board Compensation and ... to align the interests of executives, employees, and stockholders by tying a large portion...

  • Page 57
    ...related to broad-based plans maintained for employees generally. The decision to engage Mercer to...Committee has sole authority to retain and terminate the consultant. In addition to considering ...by the Company represent less than 0.1% of 2012 total annual revenues for Mercer's parent company, Marsh &...

  • Page 58
    ... officer of Alaska Air Group; and that the Mercer consultants do not own shares of Alaska Air Group common ...on a short-term or current basis. Annual incentives and longterm equity-based incentives are... resourcefulness and teamwork by key employees whose performance and responsibilities directly affect...

  • Page 59
    ... as a comparator for determining appropriate compensation levels for 2012 Air Canada Allegiant AMR Corporation Delta Air Lines Hawaiian Holdings JetBlue Airways Republic Airways Holdings SkyWest Southwest Airlines United Airlines/Continental US Airways Group WestJet Total Direct Compensation of...

  • Page 60
    ...airline industry and their businesses are similar to the Company's business. • The median annual revenue of this group approximates the Company's annual...-term stockholder gain. All employee groups at the Company participated in the PerformanceBased Pay Plan during 2012. The Committee believes that ...

  • Page 61
    ...Airlines) 2012 Base Salary Alaska Air Group Base Salary (Air Group peers)* Air Canada Allegiant ** AMR Corporation Delta Air...Airlines United Airlines/Continental US Airways Group WestJet Average Base Salary ** (Air Group peers) * At the May 2012 annual... reported in the respective company's 2012 proxy...

  • Page 62
    ...-Based Pay Plan, which is intended to motivate executives and other employees to achieve specific Company goals. All of the Company's employee groups participated in the Performance-Based Pay Plan during 2012. The Committee aligns executive compensation with the Company's strategic plan by...

  • Page 63
    ...2012 Performance-Based Pay Metrics Goal Weight Threshold Alaska Horizon Target Alaska Horizon Maximum Alaska Horizon Operational Performance Safety • Risk Level 3+ Events* Employee Engagement/Customer Satisfaction • Measured by the number...pretax expense under any Alaska Air Group (or subsidiary)...

  • Page 64
    ...that can be controlled by the decisions and actions of employees, thereby providing a more direct link between performance and reward...Pay Plan. The performance measures are detailed below: 2012 Modifier to Performance-Based Pay Alaska Air Group Non-Ticket Passenger Revenue Per Passenger Performance ...

  • Page 65
    ...2012 Performance-Based Pay Plan payout for an Alaska Airlines executive: 2012 Performance-Based Pay Calculation* Metrics Actual % of Target Achieved Weight Payout % CASM Alaska Air...% 108% 182.7% 188.2% 184.7% Alaska average - 114% Horizon average - 116% 149.7% 149.6% ...Company's employees, including ...

  • Page 66
    ... goals, and the maximum annual payout for each employee is $1,200. Long-Term... their stock options only to the degree that Air Group stockholders would realize value if they purchased shares...performance periods beginning in January 2010, 2011 and 2012. In 2010 and 2011, performance stock units ...

  • Page 67
    ...Air Canada, Allegiant, AMR Corporation, Delta Air Lines, Hawaiian Holdings, JetBlue Airways, Republic Airways Holdings, SkyWest, Southwest Airlines, United Airlines... to 200% of the target number of units subject to the award... salary and annual target incentive ...Company's financial reporting) of ...

  • Page 68
    ... in connection with his election as CEO of the Company. The award, which was included with Mr. Tilden's annual grant and has a three-year performance period, represents four times Mr. Tilden's 2012 base salary if target goals are met, and can range from 0% if threshold performance is not reached to...

  • Page 69
    ...employees. Due to maximum limitations imposed by the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code on the annual... The Committee set Mr. Ayer's 2012 annual salary at $103,000, commensurate ...executive officer must beneficially own a number of shares of the Company's ...

  • Page 70
    ... Committee reviews compliance with this requirement annually. restatement due to the individual's ... Regarding Change in Control and Termination The Company has change-in-control...effective date of this policy; (2) the amount of or number of shares included in any such payment or award was determined...

  • Page 71
    .... The Committee is currently composed of three non-employee directors who are named at the end of this report, each of whom is independent as defined by ... the Compensation Discussion and Analysis section be included in the Company's 2012 Annual Report on Form 10-K on file with the SEC and the Company...

  • Page 72
    ...(5) Exec VP and General Counsel, Alaska Glenn S. Johnson(6) President, Horizon Air Exec VP, Air Group Benito Minicucci Exec VP/Operations and COO, Alaska William S. Ayer Executive Chair and Former CEO, Alaska Year (b) 2012 2011 2010 2012 2011 2010 2012 Salary Bonus ($) ($) (c) (d) 419,614 388...

  • Page 73
    ... 2012 Annual Report ...Salaried Employees and...number included in Column (h) is an estimate of the value of future payments and does not represent value received during 2012...airline industry. Also included in the total for Column (i) are the Company's incremental cost of providing flight benefits, annual...

  • Page 74
    ...Named Executive Officer prior to 2012. As such, only Mr. Loveless's 2012 compensation information is included. (6) Mr. Johnson was elected President of Horizon Air Industries, Inc. in June 2010. Previously he was Executive Vice President/Finance and CFO of Alaska Air Group, Inc. The Compensation and...

  • Page 75
    ...Maximum Threshold Target Maximum Units e) (f) (g) (h) (i) All Other Option Awards: Number of Securities Underlying Options (#) (j) Grant Exercise Date Fair or Base Value of... Statements, included as part of the Company's 2012 Annual Report filed on Form 10-K with the SEC and incorporated herein by reference...

  • Page 76
    ...by each of the Named Executive Officers as of December 31, 2012, including the vesting dates for the portions of these awards that ...are determined by multiplying the number of shares or units reported in Column (g) and Column (i), respectively, by $43.09 (the closing price of Air Group stock on 12/31...

  • Page 77
    EXECUTIVE COMPENSATION (5) The performance stock units reported in Column (i) are eligible to vest based on the ... Named Executive Officers during 2012 and the vesting during 2012 of other stock awards previously granted to the Named Executive Officers. Option Awards Number of Shares Acquired on...

  • Page 78
    ... nonqualified defined-benefit pension plans. Number of Years Present Value of Payments During Credited Service Accumulated Benefit Last Fiscal Year... Note 8 (Employee Benefits Plans) to the Company's Consolidated Financial Statements, included as part of the Company's 2012 Annual Report filed on Form...

  • Page 79
    ...benefit retirement plan for salaried Alaska Airlines employees hired prior to April ... the employee's final average base salary times years of credited service (limited to 40 years). Annual benefits ...a change in control of the Company or upon termination of the participant's employment due to death or ...

  • Page 80
    ...employees may elect to receive a portion of some or all of their Performance-Based Pay awards on a deferred basis. The crediting...under the plan are generally distributed on termination of the participant's employment, although participants... deferred compensation plans during 2012, and also shows the...

  • Page 81
    ...annual incentive payments for the three years preceding the year in which the change in control occurs; • continue to accrue age and service credit...and a prorated number of the target number of performance stock...terminated. The outstanding equity awards held by the executives as of December 31, 2012...

  • Page 82
    ...the benefits shown to each of our Named Executive Officers as if the executive's employment had terminated due to retirement, death or disability, or change in control on December 31, 2012. The value of accelerated vesting shown in the "Equity Acceleration" column below assumes the performance share...

  • Page 83
    ... credit ...employees who retire with more than ten years of service are entitled to flight benefits on Alaska Airlines and Horizon Air...annual usage is equal to actual average annual usage amounts in 2010 through 2012, and that the annual value of the benefit is equal to the annual...upon termination ...

  • Page 84
    ...the rules of the SEC and represents the sum of the columns "Number of Shares of Common Stock Owned" and "Options Exercisable within 60...which are described in the "2012 Grants of Plan Based Awards" table. Total shares beneficially owned reported for non-employee directors also include common shares to...

  • Page 85
    ... as of March 22, 2013. Beneficial Owner Name and Address Number of Shares Owned Percent of Outstanding Shares (1) The Vanguard Group ...common stock outstanding as of March 22, 2012. (2) A Schedule 13G/A filed on February 4, 2013 by BlackRock, Inc. reported sole voting power and sole dispositive power...

  • Page 86
    ... also require the Company to identify in this Proxy Statement any person subject to this requirement who failed to file a report on a timely basis. A Form 4 due September 18, 2012 for Mr. Mark Eliasen relating to the vesting of restricted stock units, forfeiture of shares to cover payroll taxes, and...

  • Page 87
    Annual Report on Form 10-K Å Form 10-K

  • Page 88

  • Page 89
    ...ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2012 OR ' TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-8957 ALASKA AIR...

  • Page 90
    ALASKA AIR GROUP, INC. ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2012 TABLE OF CONTENTS PART I ...ITEM 1. OUR BUSINESS ...ITEM 1A. RISK FACTORS ...ITEM 1B. UNRESOLVED STAFF COMMENTS ...ITEM 2. PROPERTIES ...ITEM 3. LEGAL PROCEEDINGS ...ITEM 4. MINE SAFETY DISCLOSURES ......

  • Page 91
    ... our control. Our forward-looking statements are based on the information currently available to us and speak only as of the date on which this report was filed with the SEC. We expressly disclaim any obligation to issue any updates or revisions to our forward-looking statements, even if subsequent...

  • Page 92
    PART I ITEM 1. OUR BUSINESS Alaska Air Group operates Alaska Airlines and Horizon Air, which together with its partner regional airlines, serve 95 cities through an expansive network in Alaska, the Lower 48, Hawaii, Canada and Mexico. During 2012, we carried 26 million passengers while earning ...

  • Page 93
    ...International Airport (LAX), Alaska moved to a newly renovated Terminal 6, which includes... new markets, offers from partner airlines and monthly Mileage Plan activity. ...annual reduction out of the past 11 years. We achieved this through a continued focus on productivity. In 2012, we increased employee...

  • Page 94
    ... states of Washington, Oregon, Idaho and California. Horizon is the largest regional airline in the Pacific Northwest and represented over 90% of Air Group's regional revenue passengers during 2012, 2011, and 2010, respectively. West Coast ...Alaska ...Transcon/midcon . . Hawaii ...Mexico ...Canada...

  • Page 95
    ...2012, Horizon's operating fleet consisted of 48 Bombardier Q400 turboprop aircraft. Horizon flights are listed under Alaska's designator code in airline...annually. Said another way, a one-cent change in our fuel price per gallon will impact our expected annual..., a largely unionized work force, the...

  • Page 96
    ...Horizon operates an all-Q400 turboprop fleet. Alaska's fuel burn expressed in available seat miles flown per gallon (ASMs/g) improved from 72.6 ASMs/g in 2008 to 76.6 ASMs/g in 2012... AIRLINES We have marketing alliances with a number of airlines that provide reciprocal frequent flyer mileage credit ...

  • Page 97
    ... Airlines and Delta Air Lines are our primary codeshare partners. They participate in two of the three major global alliances. Our marketing alliances with other airlines are as follows: Codeshare- Other Airline Flight # on Flights Operated by Alaska / Horizon / SkyWest TICKET DISTRIBUTION Airline...

  • Page 98
    ...competition. New entrants into the U.S. airline industry generally do not have unionized work forces, and often have lower costs and more liberal work rules. At December 31, 2012, labor unions represented 83% of Alaska's and 49% of Horizon's employees. Our relations with our U.S. labor organizations...

  • Page 99
    Alaska's union contracts at December 31, 2012 were as follows: Number of Active Employees Union Employee Group Contract Status Air Line...Amendable 3/24/2015 Horizon's union contracts at December 31, 2012 were as follows: Number of Active Employees Union Employee Group Contract Status ...

  • Page 100
    ...Board in 2010. He was elected Chief Executive Officer of Alaska Air Group, Alaska Airlines and Horizon Air Industries in May 2012. Mr. Johnson joined Alaska Airlines in 1982, became Vice President/Controller and Treasurer of Horizon Air Industries in 1991 and Vice President/Customer Services in 2002...

  • Page 101
    ... passenger and cargo air transportation in the U.S., a domestic airline is required to ... time, duty period and rest came into effect in 2012. The rule limits flight time to eight to nine hours...rule also places 28-day and annual limits on actual flight time. TSA: Airlines serving the U.S. must operate ...

  • Page 102
    ...2012, 2011 and 2010. The Department of Justice and DOT have jurisdiction over airline... greenhouse gas emissions. Alaska and Horizon have transitioned to more... Capacity Act of 1990, the Clean Air Act, the Resource Conservation and Recovery ...have adopted environmental and employee safety and health laws ...

  • Page 103
    ... our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports are available...air carriers. Additional laws, 15 SAFETY, COMPLIANCE AND OPERATIONAL EXCELLENCE Our reputation and financial results could be harmed in the event of an airline...

  • Page 104
    ...that could significantly increase the cost of airline operations or reduce the demand for air travel. Although lawmakers may impose these ..., in recent years, Alaska and Horizon have subcontracted their heavy aircraft...perception of our airline. Vendor bankruptcies, unionization, regulatory compliance ...

  • Page 105
    ... general reduction in airline passenger traffic as... a reduction in demand for air transportation in our key markets....number of suppliers for aircraft and parts. Alaska is dependent on Boeing as its sole supplier for aircraft and many aircraft parts. Horizon...2012, passengers to and from Seattle accounted ...

  • Page 106
    ...Alaska and Horizon are parties to marketing agreements with a number of domestic and international air carriers, or "partners," including, but not limited to, American Airlines and Delta Air...our customers, our employees, our business partners... for the years ended 2012, 2011 and 2010, respectively...

  • Page 107
    ... of Seattle for terminal space at Seattle-Tacoma International Airport expired on December 31, 2012. Negotiations for ... process and any subsequent challenge by us or other airlines will not interrupt our tenancy at Sea-Tac. does... strengthen our relationships with union employees, or loss of key...

  • Page 108
    As of December 31, 2012, labor unions represented approximately 83% of Alaska's and 49% of Horizon's employees. Although we have been ... affecting employee focus in our business and diverting management's attention from other projects and issues. We compete against the major U.S. airlines and ...

  • Page 109
    ... facilities outside of Seattle include a regional headquarters building, an air cargo facility and a hangar/office facility in Anchorage, AK, as well as leased call center facilities in Phoenix, AZ and Boise, ID. Alaska uses its own employees for ground handling services at most of its airports in...

  • Page 110
    ... stock is listed on the New York Stock Exchange (symbol: ALK). The following table shows the trading range of Alaska Air Group, Inc. common stock on the New York Stock Exchange: 2012 High Low 2011 High Low SALES OF NON-REGISTERED SECURITIES None PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND...

  • Page 111
    ... Index $400 $350 $300 $250 $200 $150 $100 $50 $0 12/07 12/08 12/09 12/10 12/11 12/12 Alaska Air Group, Inc. S&P 500 Dow Jones US Airlines *$100 invested on 12/31/07 in stock or index, including reinvestment of dividends. Fiscal year ending December 31. Copyright© 2013 S&P, a division...

  • Page 112
    ...(CASMex) (c) ...Average number of full-time equivalent employees (FTE) ...Mainline: Revenue...capacity" ...Load factor ...Yield ...PRASM ...Operating fleet at period-end (Horizon only) ... 4,657 4,125 532 (18) 514 316 70.708...million, $8 million, and $23 million for 2012, 2011, 2010, 2009, and 2008, ...

  • Page 113
    ... 2012, marking our ninth consecutive year in which we reported an adjusted profit. Air Group employees earned $88 million in incentive pay, or more than one-month's pay for most employees. Over the last four years, employees have earned more than $325 million in incentive pay, averaging 8% of annual...

  • Page 114
    ..." by Travel + Leisure magazine for Alaska Airlines' sustainability efforts. Alaska Airlines named "Best Regional Airline in North America" at the 2012 World Airline Awards. Alaska Airlines earned "Eco-Partnership of the Year Award" by Air Transport World magazine. Recognized Alaska Air Group as the...

  • Page 115
    ...we are in early discussions with Alaska's pilots, represented by the Airline Pilots Association (ALPA), whose contract is amendable in April 2013. We are also in negotiations with Horizon's maintenance store employees, represented by IAM. Stock Repurchase In 2012, we repurchased 1,685,951 shares of...

  • Page 116
    ... and provide our employees with the long-... compared to the same periods in 2012 on an expected 8.5% increase in ...results to those of other airlines; and • It is ...Horizon's fleet transition to an all Q400 fleet. (in millions, except per share amounts) Net income and diluted EPS as reported...

  • Page 117
    ...Alaska Air Group, Inc. Below are operating statistics we use to measure operating performance. We often refer to unit revenues and adjusted unit costs, which is a non-GAAP measure. 2012... (000,000) ...422 398 Average number of full-time equivalent employees ...11,955 11,840 Mainline Operating ...

  • Page 118
    ...2011, which waives the checked bag fee for residents in the state of Alaska who have joined the program. Passenger Mainline ...$3,284 $2,995 Regional ...746 ... with the way expenses are reported internally and evaluated by management: (in millions) Year Ended December 31, 2012 2011 % Change $1,298 ...

  • Page 119
    ... the different employee groups contain important productivity improvements, which resulted in a 3.5% increase in the number of passengers handled...crude oil to jet fuel. The increase in raw fuel price per gallon during 2012 was due to the increase in refining margins of 10.3%, offset by the decrease...

  • Page 120
    ...reporting and incentive pay plans. Losses recognized for hedges that settled during the year was $24 million in 2012...increases were partially offset by lower rents at LAX of $8 million. We expect landing fees ... as a result of an increase in the number of flights to airports where outside vendors are ...

  • Page 121
    ... as credit card ...annualization of B737 aircraft and Q400 aircraft delivered in 2011, as well as the deliveries of B737 aircraft in 2012. In addition, we incurred depreciation of $6 million since we placed Terminal 6 at LAX into service in March 2012... increase in the number of passengers. Mainline...

  • Page 122
    ...by the Air Group Board of Directors in assessing quarterly and annual cost ...employee incentive plan that covers all employees. • CASM excluding fuel and certain special items is a measure commonly used by industry analysts, and we believe it is the basis by which they compare our airlines...

  • Page 123
    ... income and diluted EPS as reported ...Fleet transition costs, net ... Our effective income tax rate for 2012 was 38.5% compared to 37.9%...or $0.05 per share) in 2010. 2011 included Horizon fleet transition costs of $39 million ($24 million ...driven by the annualization of new routes added in 2010 and ...

  • Page 124
    ...Alaska's clerical, office and passenger service employees in connection with a new contract ratified in January 2011. Productivity as measured by the number...expenses as follows, which is consistent with the way expenses are reported internally and evaluated by management: Year Ended December 31, % ...

  • Page 125
    ...of higher travel agent and ticket distribution costs of $11 million and credit card commissions of $6 million due to increased revenues of 13%. Depreciation... $10 million, or 17%, from the prior year due to an increased number of passengers, increased sales of buy on board products, a higher cost of...

  • Page 126
    primarily driven by higher personnel non-wage costs such as hotels, meals and per diems of $8 million and higher professional service costs of $7 million as well as higher costs for communications, property taxes, passenger remunerations, and deicing. CONSOLIDATED NONOPERATING INCOME (EXPENSE) Net ...

  • Page 127
    ..., approved and prohibited investments, and duration and credit quality guidelines. Our policy and the portfolio managers...Long-term debt-to-capital assuming aircraft operating leases are capitalized at seven times annualized rent ...December 31, 2012 $ 1,252 27% 871 1,421 54%:46% December 31, 2011 $ ...

  • Page 128
    ... new Boeing agreements. In 2012, we entered into a...NG and MAX aircraft will give Alaska the flexibility, but not the...Horizon has options to acquire 10 Q400 aircraft with deliveries in 2013 to 2015. In addition, our capital expenditures related to Terminal 6 at Los Angeles International Airports (LAX...

  • Page 129
    ...from Los Angeles World Airport (LAWA) for our construction of Terminal 6 at LAX of $178 million. We plan to meet our capital ...spare engines, spare parts and ground service equipment. We modified the first facility in 2012 by extending the term from March 2013 to August 2015 and the second facility ...

  • Page 130
    ...to acquire 10 Q400 aircraft. The following table summarizes aircraft purchase commitments by year: Actual Fleet Count Dec 31, Dec 31, 2011 2012 2013 Changes Expected Fleet Activity Dec 31, 2014 Dec 31, 2013 Changes 2014 Aircraft B737 Freighters & Combis ...B737 Passenger Aircraft ...Total Mainline...

  • Page 131
    ... plans was $335 million at December 31, 2012 compared to $306 million at December 31, ...using an accelerated depreciation method. For financial reporting purposes, the majority of our assets are ...our control. 43 Credit Card Agreements We have agreements with a number of credit card companies to ...

  • Page 132
    ... utilization of federal net operating losses and alternative minimum tax credits in 2012. However, this is highly dependent on actual taxable income ...cash. In either case, the outstanding miles may be redeemed for travel on our airlines or any of our travel partners. As long as the Mileage Plan is in...

  • Page 133
    ... For example, our members may redeem credit for award travel to various locations or...accrual basis over employees' approximate service ...$42 million, and $50 million in 2012, 2011, and 2010, respectively. We...45 4. The number of awards redeemed for travel on our airlines versus other airlines: The cost...

  • Page 134
    ...This expected long-term rate of return on plan assets at December 31, 2012 is based on an allocation of U.S. and non-U.S. equities and U.S. fixed... plans are now closed to new entrants. Additionally, benefits in our non-union defined-benefit plans will be frozen January 1, 2014. Future changes in plan...

  • Page 135
    ...not have any collateral held by counterparties to these agreements as of December 31, 2012. We continue to believe that our fuel hedge program is an important part of...is approximately 18% of our total long-term debt at December 31, 2012 compared to 23% at December 31, 2011. We also have investments ...

  • Page 136
    ... DATA SELECTED QUARTERLY CONSOLIDATED FINANCIAL INFORMATION (unaudited) (in millions, except per share) First Quarter 2012 2011 Second Quarter 2012 2011 Third Quarter 2012 2011 Fourth Quarter 2012 2011 Operating revenues ...$1,039 Operating income ...72 Net income ...41 Basic earnings per share...

  • Page 137
    ... audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Alaska Air Group, Inc.'s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control- Integrated Framework issued by the Committee of...

  • Page 138
    ALASKA AIR GROUP, INC. CONSOLIDATED BALANCE SHEETS As of December 31 (in millions) 2012 2011 ASSETS Current Assets Cash and cash equivalents ...Marketable securities ...Total cash and marketable securities ...Receivables-less allowance for doubtful accounts of $0 and $1 ...Inventories and ...

  • Page 139
    ALASKA AIR GROUP, INC. CONSOLIDATED BALANCE SHEETS-(continued) As of December 31 (in millions except share amounts) 2012 2011 ...Air traffic liability ...534 Current portion of long-term debt ...161 Total Current Liabilities ...Long-Term Debt, Net of Current Portion ...Other Liabilities and Credits...

  • Page 140
    ALASKA AIR GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS Year Ended December 31 (in millions, except per share amounts) 2012 2011 2010 Operating Revenues Passenger Mainline ...$ 3,284 Regional ...746 Total passenger revenue ...Freight and mail ...Other-net ...Total Operating Revenues ......

  • Page 141
    ALASKA AIR GROUP, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS Year Ended December 31 (in millions) 2012 2011 2010 Net Income ...$316 $ ...(8) Income tax benefit (expense) ...(1) 1 - Total ...Related to employee benefit plans: Amortization of net actuarial items and prior service costs ...

  • Page 142
    ALASKA AIR GROUP, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDER'S ...repurchase ...Stock-based compensation ...Retirement of treasury stock ...Stock issued for employee stock purchase plan ...Stock issued under stock plans ...Balances at December 31, 2012 ... 71.182 $ 72 $ 731 $ (6) $(240) (27...

  • Page 143
    ALASKA AIR GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31 (in millions) 2012 2011 2010 ...(net of amount capitalized) ...$ Income taxes ...Non-cash transactions: Relocation credit and assets constructed related to Terminal 6 at LAX ...753 696 553 (455) (24) (39) (518) (56)...

  • Page 144
    ...2012 NOTE 1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Basis of Presentation The consolidated financial statements include the accounts of Alaska Air Group, Inc. (Air Group or the Company) and its subsidiaries, Alaska Airlines, Inc. (Alaska) and Horizon Air... reported ...

  • Page 145
    ...consist primarily of airline traffic (including credit card) receivables, Mileage Plan partners, amounts due from other airlines related to interline... inventory of $23 million and $20 million at December 31, 2012 and 2011, respectively. Repairable and rotable aircraft parts inventories are included...

  • Page 146
    ...not be known with certainty until lease termination. As leased aircraft are returned, any...reported as air traffic liability until travel or date of expiration. Air traffic liability includes approximately $26 million and $22 million related to travel credits for future travel, as of December 31, 2012...

  • Page 147
    ... ended December 31 (in millions): 2012 2011 2010 Mileage Plan Alaska operates a frequent flyer program ("Mileage Plan") that provides travel awards to members based on accumulated mileage. For miles earned by flying on Alaska or Horizon and through airline partners, the estimated cost of providing...

  • Page 148
    ... years ended December 31, 2012, 2011, and 2010, ... approach for accounting and reporting income taxes. Deferred tax...and for operating loss and tax credit carryforwards. Deferred tax assets and ...that the Company grants to employees as well as the Company's Employee Stock Purchase Plan Level 1-...

  • Page 149
    (ESPP), which features a look-back provision and allows employees to purchase stock at a 15% discount. All stock...of in-themoney stock options and restricted stock units, using the treasury-stock method. In 2012, 2011, and 2010, antidilutive stock options excluded from the calculation of EPS were not ...

  • Page 150
    ... for jet fuel refining margins. As of December 31, 2012, the Company had fuel hedge contracts outstanding covering 454 million...termination dates. Fair Values of Derivative Instruments Fair values of derivative instruments on the consolidated balance sheet as of December 31 (in millions): 2012...

  • Page 151
    ... twelve months. (10) (26) (17) credit ratings. The Company maintains security agreements with a number of its counterparties which may require the Company to... of $15 million, $1 million and nil as of December 31, 2012, 2011 and 2010, respectively. The collateral was provided to one counterparty ...

  • Page 152
    ... active markets. In addition, the fair value considers the exposure to credit losses in the event of non-performance by counterparties. The fair value... measured at fair value on a nonrecurring basis at December 31, 2012. Fair Value of Other Financial Instruments The Company used the following ...

  • Page 153
    ...Terminal 6. During the fourth quarter of 2012, the Company was reimbursed for substantially all of the non-proprietary renovations. For accounting and financial reporting...31 (in millions): 2012 2011 Proprietary assets of T6 at LAX ...$ 17 $ 9 Assets constructed for others (T6 at LAX) ...199 143 Other...

  • Page 154
    ...2012 2011 Excess of tax over book depreciation ...$ 842 Other-net ...19 Gross deferred tax liabilities ...Mileage Plan ...AMT and other tax credits ...Inventory obsolescence ...Deferred gains ...Employee...excess of compensation recognized for financial reporting. Those deferred tax assets included ...

  • Page 155
    ...those years that were utilized in 2010 and later years. At December 31, 2012, the total amount of unrecognized tax benefits is recorded as a liability, all ... plans cover various employee groups of Alaska and Horizon. The defined-benefit plans provide benefits based on an employee's term of service...

  • Page 156
    ... December 31, 2012 and 2011, respectively. For 2012, the rate of...of December 31: 2012 2011 Asset category:... ended December 31, 2012, 2011, and 2010, respectively. Expected...the year ended December 31, 2012, 2.99% to 4.35% ... As of December 31, 2012, other than the money ...in millions): 2012 2011 Level Fund type...

  • Page 157
    Nonqualified Defined-Benefit Pension Plan Alaska also maintains an unfunded, noncontributory defined-benefit ...Discount rates of 4.65%, 5.55%, and 5.85% were used for the years ended December 31, 2012, 2011, and 2010, respectively. The rate of compensation increase used was 7.00% per year during the...

  • Page 158
    ...$42 $- 306 $306 $ 2 41 $43 AMOUNTS NOT YET REFLECTED IN NET PERIODIC BENEFIT COST AND INCLUDED IN AOCL: 2012 Nonqualified 2011 Nonqualified Qualified Qualified Prior service credit ...Net loss ...Amount recognized in AOCL (pretax) ... $ (15) 695 $680 $- 9 $ 9 $ (15) 613 $598 $- 12 $ 12 The...

  • Page 159
    ..., and vision benefits by paying all or a portion of the active employee plan premium until eligible for Medicare, currently age 65. This results in...using an assumed discount rate of 3.95% and 4.65% at December 31, 2012 and 2011, respectively. The Company does not believe the U.S. Health Care Reform: ...

  • Page 160
    ... 31, 2012 and 2011, respectively. Employee Incentive-Pay Plans Alaska and Horizon have employee incentive plans that pay employees based on...all employees. The program is based on four separate metrics related to Air Group profitability, safety, achievement of unit-cost goals, and employee engagement...

  • Page 161
    ... and terminal facilities are also leased. Rent expense was $275 million, $275 million, and $295 million, in 2012, 2011, and 2010, respectively. owned subsidiary, Horizon. Beginning January 1, 2011, Horizon sold 100% of its capacity under a CPA with Alaska. On May 14, 2011, SkyWest Airlines, Inc...

  • Page 162
    ... the total number of common shares outstanding. Accumulated Other Comprehensive Loss (AOCL) AOCL consisted of the following at December 31 (in millions, net of tax): 2012 2011 Unrealized gain on marketable securities considered available-for-sale ...$ (7) $ (6) Related to employee benefit plans...

  • Page 163
    ...based compensation for the years ended December 31 (in millions): 2012 2011 2010 The Company has various equity incentive plans under which it may grant stock awards to directors, officers and employees. The Company also has an employee stock purchase plan (ESPP). The Company is authorized to issue...

  • Page 164
    ... Contractual Life (Years) Aggregate Intrinsic Value (in millions) Number of Units Non-vested, December 31, 2011 ...1,123,002... Employees may contribute up to 10% of their base earnings during the offering period to purchase stock. Employees purchased 157,373, 125,564, and 31,098 shares in 2012, ...

  • Page 165
    ... of Horizon. Horizon-Horizon operates regional aircraft. All of Horizon's capacity is sold to Alaska under a CPA. Expenses included those typically borne by regional airlines such as crew costs, ownership costs, and maintenance costs. Additionally, the following table reports "Air Group adjusted...

  • Page 166
    Operating segment information is as follows (in millions): Alaska Year ended December 31, 2012 Air Group Special Mainline Regional Horizon Consolidating Adjusted (a) Charges Consolidated Operating revenues Passenger Mainline ...$3,284 Regional ...- Total passenger revenues ...CPA revenues ......

  • Page 167
    Alaska Year ended December 31, 2010 Air Group Special Mainline Regional Horizon Consolidating Adjusted (a) ...fuel-hedge accounting. 2012 2011 2010 Depreciation: Alaska (a) ...$ Horizon ...Parent company ...Consolidated ...$ Capital expenditures: Alaska (a) ...$ Horizon ...Consolidated ...$ 217...

  • Page 168
    ... Treadway Commission (the COSO Framework). Based on our evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2012. We intend to regularly review and evaluate the design and effectiveness of our disclosure controls and procedures and...

  • Page 169
    ... INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholders Alaska Air Group, Inc.: We have audited Alaska Air Group, Inc.'s internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control-Integrated Framework issued by...

  • Page 170
    ITEM 9B. OTHER INFORMATION On October 10, 2012, Alaska Airlines, Inc. (Alaska) amended and supplemented its aircraft purchase agreement with The Boeing Company with respect to 737-900ER aircraft. The supplemental agreement includes firm orders for thirteen ...

  • Page 171
    ...Proxy Statement for Air Group's 2013 Annual Meeting of ...Stockholders to be filed with the Securities and Exchange Commission within 120 days after the end of the fiscal year ended December 31, 2012...2008 Plan. (3) Of the aggregate number of shares that remained available for...

  • Page 172
    Other information required by this item is set forth under the heading "Beneficial Ownership of Securities" in our 2013 Proxy Statement and is incorporated by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this item is ...

  • Page 173
    PART IV ITEM 15. EXHIBITS The following documents are filed as part of this report: 1. Exhibits: See Exhibit Index. 85 Å Form 10-K

  • Page 174
    ... 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. ALASKA AIR GROUP, INC. By: /S/ BRADLEY D. TILDEN Date: February 14, 2013 Bradley D. Tilden President and Chief Executive Officer...

  • Page 175
    ..., Inc. Purchase Agreement No. 3866 between The Boeing Company and Alaska Airlines, Inc. Supplement to Master Purchase Agreement, dated October 18, 2005, between Horizon Air Industries, Inc. and Bombardier Inc. Alaska Air Group Performance Based Pay Plan (formerly "Management Incentive Plan"), as...

  • Page 176
    ... Performance Incentive Plan, Form of Stock Unit Award Agreement, as amended 2008 Performance Incentive Plan, Form of Stock Unit Award Agreement Incentive Award, as amended Alaska Air Group, Inc. 2004 Long-Term Incentive Plan and original form of stock option and restricted stock unit agreements...

  • Page 177
    ... Group, Inc. 1997 Non Officer Long-Term Incentive Equity Plan Alaska Air Group, Inc. 1996 Long-Term Incentive Equity Plan Alaska Air Group, Inc. Non Employee Director Stock Plan Alaska Airlines, Inc. and Alaska Air Group, Inc. Supplementary Retirement Plan for Elected Officers, as amended November...

  • Page 178
    32.2†Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 XBRL Instance Document XBRL Taxonomy Extension Schema Document XBRL Taxonomy Extension Calculation Linkbase Document XBRL Taxonomy Extension ...

  • Page 179
    ...have reviewed this annual report on Form 10-K of Alaska Air Group, Inc. for the period ended December 31, 2012; Based on my knowledge, this report does not contain... management or other employees who have a significant role in the registrant's internal control over financial reporting. By: /s/ ...

  • Page 180
    ... have reviewed this annual report on Form 10-K of Alaska Air Group, Inc. for the period ended December 31, 2012; Based on my knowledge, this report does not contain ... and report financial information; and any fraud, whether or not material, that involves management or other employees who have...

  • Page 181
    ...18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Alaska Air Group, Inc. (the "Company") on Form 10-K for the period ended December 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the...

  • Page 182
    ...18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Alaska Air Group, Inc. (the "Company") on Form 10-K for the period ended December 31, 2012 as filed with the Securities and Exchange Commission on the date hereof (the...

  • Page 183
    ...ALASKA AIR GROUP DIRECTORS William S. Ayer Executive Chairman Alaska Air Group Alaska Air Group Officers William S. Ayer Executive Chairman Alaska Airlines... Shane R. Tackett Labor Relations Tamara S. Young Human Resources Horizon Air Officers William S. Ayer Executive Chairman Brad Tilden CEO Glenn ...

  • Page 184
    ...in 1981, is noted for its outstanding operational performance. Horizon Air is a regional carrier and performs all of its flying for Alaska Airlines under a capacity purchase arrangement. Horizon serves nearly seven million passengers annually. Its hubs are Seattle and Portland. Investor Information...

  • Page 185
    Thanks for sharing this journey with us.

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    002CSN7950