Alaska Airlines Rebuts Allegations Made in Seattle Post-Intelligencer Article.

SEATTLE--(BUSINESS WIRE)--March 5, 1999--Alaska Airlines Chairman and CEO John F. Kelly and President Bill Ayer issued the following joint statement to all employees of Alaska Airlines this afternoon, in response to a front page article in the Seattle Post-Intelligencer raising questions about the carrier's relationship with the FAA:

"Safety first. Those two words drive everything we do at Alaska Airlines, despite what you may have read on the front page of today's Seattle Post-Intelligencer.

"Unfortunately, we've been caught in the cross hairs of some intense media scrutiny of the aviation industry -- no doubt fueled in large part by the much-hyped circulation war between Seattle's two daily newspapers and their subsequent race to one-up each other.

"We have many things to share on the matter and will be communicating them in greater depth to you in the days ahead. But for now, it's crucial that perspective be put on what is a very inaccurate and unbalanced news report -- one that questions the integrity and professionalism of the 9,244 people who are Alaska Airlines. Here are the facts:

"SAFETY -- There are no benefits to compromising safety, only dire consequences. In addition to putting thousands of customers on our planes every day, we put ourselves and our families in the air as well. To suggest we'd operate in anything but a safe manner is absolutely outrageous. Moreover, we've pioneered new technologies and training programs that enhance safety margins.

"PROVEN EXCELLENCE -- Both the FAA and the Department of Defense, in their periodic `white glove' audits of our maintenance, engineering and flight operations divisions, have rated our work as exceptional. If that's not objective enough, The Wall Street Journal found we had the best safety record among the 10 largest carriers in 1997 and ranked among the top three carriers from 1992-97 based on figures obtained from the U.S. Department of Transportation.

"THE PROCESS -- We don't skirt rules -- we follow them. We don't always agree with the FAA. And when we don't, we follow the prescribed method for appealing inspector rulings. Do we always prevail? No. But to imply, as the P-I did, that our use of the FAA's own appeal process is somehow wrong points to their ignorance, not our ethics. The appeal process was put in place long ago to ensure fairness in a field where inspectors can often disagree.

"THE PLAYERS -- We're not just the target of intense media scrutiny, but of a few disgruntled FAA employees upset with their agency. We'll detail their charges in a later communications piece, but for now, let us say that their allegations don't hold water. In fact, prior to the publication of the article, attorneys for one of the FAA inspectors threatened litigation and adverse publicity unless we agreed to the payment of hundreds of thousands of dollars.

"RIGHTING A WRONG -- One of the disgruntled FAA employees says Mike Swanigan, vice president of flight operations, tried to have him fired. Not true. Mike recommended that the inspector be reassigned after the inspector had browbeat and threatened two of our customer service agents to the point of tears. If the P-I thinks it's wrong to stand up for our people when they're being abused, then we welcome front-page stories every day.

"We are personally outraged and offended by the allegations made by these inspectors and their implications. The Seattle P-I may not like either of us, or Mike Swanigan or Executive Vice President John Fowler, or our company generally. And that's just fine. But when they question the professionalism and integrity of the dedicated men and women who make up the Alaska family, then we're going to take the gloves off in defense of our team."