Alaska Air Group, Inc. · NYSE:ALK

Alaska Air — Corporate Update (December 2016)

8 slides from Alaska Air's corporate update, Dec 19, 2016

  1. Slide 1: Investor Update: Delta Marketing & Codeshare Agreement

    Investor Update: Delta Marketing & Codeshare Agreement

  2. Slide 2: Safe harbor

    Safe harbor This presentation may contain forward-looking statements subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Thes

  3. Slide 3: Alaska's marketing & codeshare agreement with Delta is ending effective April 30th, 2017

    Alaska’s marketing & codeshare agreement with Delta is ending effective April 30th, 2017 3 Backdrop  Revenue and relevance of Delta marketing (“frequent flyer”) and codeshare relationship had been steadily declining since late 2013  Both parties agreed to accelerated termination of codeshare agree

  4. Slide 4: As Alaska's own network has grown, revenue from domestic codeshare partners has decreased

    4 Total Codeshare Partners $320M (6%) International Interline* $50M (1%) Domestic Interline* $115M (2%) American $190 Delta $65 Others $65 Total Codeshare Partners $486M (9%) International Interline* $53M (1%) Domestic Interline* $113M (2%) American $225 Delta $190 Others $71 2014 9% of Revenue from

  5. Slide 5: At ~$65M of revenue, the Delta partnership has declined significantly since its peak in 2013

    5 At ~$65M of revenue, the Delta partnership has declined significantly since its peak in 2013 2013 2014 2015 2016 - 72% Revenue from Delta Interline & Codeshare (TTM) $65M $235M $190M $94M ~80% ($50M) of current revenue is from interline agreement (not from code sharing)

  6. Slide 6: We believe that financial exposure from codeshare termination is between $5-$10M

    6 We believe that financial exposure from codeshare termination is between $5-$10M ~$50M Interline Current Revenue from Delta  Customer demand in a market does not disappear when codeshare ends, but revenue may shift between carriers (“recapture”)  We believe we will be able to recapture between $

  7. Slide 7: Customer impact should be limited as the combined Alaska-Virgin network provides increased utility

    7 In addition, the customer impact should be limited as the combined Alaska-Virgin network provides increased utility… As a larger airline, we offer customers:  ~1,200 daily flights to 118 destinations in the U.S., Canada, Mexico, Costa Rica, and soon Cuba  The most non-stop flights and destinatio

  8. Slide 8: Our other international partners have already replaced the global utility Delta used to provide

    8 …and our other international partners have already replaced the global utility Delta used to provide Our global partner network offers access to more than 900 destinations worldwide

Alaska Air Group — Corporate Update (December 2016) on 6ix