Alaska Air Group Well Positioned, CEO Says.

Business Editors

SEATTLE--(BUSINESS WIRE)--May 15, 2001

With the world's first-ever Boeing 737-900 parked outside and set for delivery to Alaska Airlines tomorrow, Alaska Air Group Chairman and CEO John Kelly told shareholders gathered today at the Museum of Flight that a slowing economy and continued high fuel prices are combining to make 2001 one of the airline industry's most challenging years in nearly a decade.

But fundamental strengths position Alaska Airlines and Horizon Air to weather the storm and then excel as the economy improves, Kelly said at the Alaska Air Group annual meeting.

"We're continuing to focus on the fundamentals that have made us a winner over the last seven decades: Safety, service, reliability, and product differentiation," said Kelly.

To that end, Kelly noted that:

-- Alaska has implemented the vast majority of items contained in both the
safety action plan it submitted to the FAA a year ago and in the report
compiled by an independent safety panel commissioned by the airline. Remaining
items are on track with scheduled implementation dates.

-- National surveys continue to rate customer service at Alaska and Horizon as
outstanding. In addition, Forrester Research recently ranked Alaska's Web
site the best in the industry. Moreover, Alaska consistently ranks among the
top three major carriers in the industry for fewest customer complaints to the
U.S. Department of Transportation. Also, Business Ethics magazine for the
second straight year has named Alaska Air Group one of the nation's 100
best corporate citizens.

-- Alaska's schedule reliability--the rate at which flights are
completed--is now at or above the historical average of 98 percent. In
addition, Alaska's baggage handling proficiency continues to be the best
in the industry. On-time performance has improved and a number of steps are
being taken this summer to keep the momentum going, including extra ground and
block times for most flights.

-- In April, Alaska and Horizon began offering customers the option of checking
in for flights using wireless, hand-held Palm devices. This is just the latest
in a long line of technological innovations--including on-line check in from
home -- that help Alaska and Horizon differentiate themselves by offering
greater convenience to customers.

-- Alaska's fleet, already the youngest among the nation's ten
largest carriers, will become younger tomorrow with delivery of the 737-900.
Alaska is the launch customer for Boeing's newest Next Generation
aircraft. Alaska is set to take delivery of two more of these 174-seat aircraft
this summer.

-- Horizon's transition to a fleet made up entirely of quiet,
fuel-efficient Dash 8 turboprop and CRJ700 jet aircraft is expected to be
completed in June 2002. This transition, which will give Horizon one of the
youngest fleets in the nation, will streamline the carrier's cost
structure and position it for more aggressive growth.

In other news, shareholders re-elected Bill Ayer, Ron Cosgrave, Marc Langland and John Rindlaub to three-year terms on the board of directors of Alaska Air Group.

Ayer, a director since 1999, is president and chief operating officer of Alaska Airlines. Cosgrave, a director since 1983, is executive manager of ANP, LLC of Seattle, and a former chairman and CEO of Alaska Airlines. Langland has been a director since 1991 and is the president and chairman of Anchorage-based Northrim Bank. Rindlaub, a director since 1996, is president of Bank of America, Northwest.