Alaska Air Group, Inc. · NYSE:ALK

Alaska Air — Calyon U.S. Airline Conference 2008

17 slides from Alaska Air's conference presentation, Sep 18, 2008

  1. Slide 1: Calyon U.S. Airline Conference

    This presentation may include forward-looking statements regarding the performance of Alaska Air Group or its subsidiaries. Actual results may differ materially from these projections. Please see our most recent Annual Report on Form 10-K for additional information concerning factors that could caus

  2. Slide 2: Strong cash position and multiple sources of liquidity

    14% 17% 17% 18% 22% 23% 25% 27% 28% 56% 0% 10% 20% 30% 40% 50% 60% United Delta US Airways Group AirTran American Continental Northwest Jet Blue Alaska Air Group Southwest Strong cash position and multiple sources of liquidity Cash as a % of Revenues Q2 ‘08 Note: Calculated using unrestricted cash a

  3. Slide 3: Relatively low leverage

    30% 72% 73% 74% 76% 85% 88% 89% 93% 106% Relatively low leverage -40% 10% 60% 110% Alaska Air Group Adjusted Debt-to-Capitalization – Q2 2008 Source: Company Q2 08 SEC filings FPA-PS 090308

  4. Slide 4: Alaska's unit costs lower than legacies'

    Alaska’s unit costs lower than legacies’

  5. Slide 5: Relentless control of non-fuel unit costs

    Relentless control of non-fuel unit costs Cost per available seat mile excluding fuel 8.73¢ 8.52¢ 8.33¢ 7.92¢ 7.0¢ 7.5¢ 8.0¢ 8.5¢ 9.0¢ 2001 2002 2003 2004 2005 2006 8.01¢ 7.81¢ 2007 7.50¢ 2008 target 7.50 – 7.6¢ Reflects 8K guidance as of 8/21/08 SA-IR

  6. Slide 6: Fuel cost increase overshadows non-fuel cost reductions

    Fuel cost increase overshadows non-fuel cost reductions 1.5¢ 1.4¢ 1.6¢ 2.9¢ 8.7¢ 8.5¢ 8.3¢ 7.9¢ 8.0¢ 2.2¢ 3.3¢ 4.9¢ 3.4¢ 7.55¢ 7.5¢ 7.8¢ 0¢ 2¢ 4¢ 6¢ 8¢ 10¢ 2001 2002 2003 2004 2005 2006 2007 2008* Fuel CASM Non fuel CASM * 2008 unhedged fuel CASM forecast ($113/bbl for FY2008) vs. CASM ex. fuel targ

  7. Slide 7: Alaska's aircraft most fuel-efficient in operation today

    Better Alaska’s aircraft most fuel-efficient in operation today • Alaska Domestic Mission Rules • 1,000 statute miles • Nominal fuel burn • Pax/Bag weight = 220 lb • 100% load factor 10.76 11.16 11.65 12.38 12.63 12.75 13.12 15.36 16.49 737-900 172 seats 737-800 157 seats A320 149 seats 757-200 182

  8. Slide 8: Horizon's aircraft also among the most fuel-efficient

    Better Horizon’s aircraft also among the most fuel-efficient 5.8 6.2 6.7 7.1 7.2 7.3 7.7 10.6 Q400 76 seats CRJ900 88 seats E190 99 seats CRJ700 70 seats Q200 37 seats CRJ200 50 seats E170 72 seats B1900 19 seats • 400 statute miles • 100% load factor Fuel gallons per passenger Source: Bombardier

  9. Slide 9: We are focused on increasing unit revenues

    We are focused on increasing unit revenues • Reducing and reallocating capacity • Increasing fares • Increasing ancillary revenues

  10. Slide 10: Reduce growth and redeploy capacity

    9.5% 6.8% 9.4% 20.9% 5.8% 13.0% -6.6% -10% -5% 0% 5% 10% 15% 20% 25% 2001 2002 2003 2004 2005 2006 2007 2008 4.0% 4.4% 0.1% 7.1% 7.5% 8.0% 3.5% 0% 5% 10% 15% 20% 25% 2001 2002 2003 2004 2005 2006 2007 2008 Reduce growth and redeploy capacity forecast forecast (year-over-year % available seat mile (A

  11. Slide 11: Fourth quarter industry capacity down significantly

    Carrier Total System Mainline Only Domestic ASM Chg - 4Q 08 vs. 4Q 07 Fourth quarter industry capacity down significantly Sources: Industry - Latest published schedules; AS - Latest capacity forecast AirTran (6%) (6%) American (13%) (12%) Continental (11%) (24%) Delta (12%) (9%) Frontier (12%) (16%)

  12. Slide 12: Slide 12

  13. Slide 13: Ancillary fee changes

    Ancillary fee changes Baggage • nd checked bag $25 • Excess baggage fees increased Ticketing & service fees • Airport ticketing • Reservations • Ticket changes • Pets • Unaccompanied minors

  14. Slide 14: Greatly improved on-time performance reduces costs

    73.0% 76.7% 78.0% 81.6% 79.9% 78.7% 77.8% 69.7% 73.3% 72.4% 80.4% 2.5 4.5 4.8 1.7 4.2 7.3 11.8 11.6 Greatly improved on-time performance reduces costs 50% 66% 83% 2005 2006 2007 Jan Feb Mar Apr May Jun Jul Aug % On time 2008

  15. Slide 15: Highest in Customer Satisfaction

    Highest in Customer Satisfaction * • J.D. Power and Associates North America Airlines Satisfaction Study – June 16, 2008 • More than 19,000 business and leisure travelers surveyed • Alaska garnered high marks for: – Aircraft – Boarding/deplaning/baggage – Check-in – Flight crews – Reservations Sourc

  16. Slide 16: Alaska Air Group is well prepared to weather the storm

    Alaska Air Group is well prepared to weather the storm • Conservative balance sheet with good liquidity • Low unit costs relative to industry and great progress outside of bankruptcy • Young, fuel-efficient, simple fleets • Great brands; strong operation • Positioned to benefit from growth through n

  17. Slide 17: Slide 17

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