Alaska CEO John F. Kelly Announces New Initiatives in Light of Recent Questions Regarding Maintenance.

Business Editors, Airlines Writers

SEATTLE--(BUSINESS WIRE)--March 20, 2000

Alaska Airlines Chairman and Chief Executive Officer John F. Kelly today announced several new initiatives he has ordered in light of recent concerns about the carrier's maintenance practices.

"Last Thursday, I was shocked to learn that 64 employees had written to tell me that they felt pressured, threatened and intimidated," Kelly said. "They also raised serious allegations regarding maintenance practices here at Alaska Airlines.

"That's why I have personally ordered these initiatives to address the concerns," he added. "While I'm confident in the system of checks and balances we have in place, if we uncover a problem, I'm going to make sure it gets fixed."

Kelly said the airline and the FAA are continuing to investigate the allegations raised by the 64 maintenance employees in Seattle. Fifty one (51) employees have been interviewed so far, and not a single safety concern warranting any action involving any of our aircraft has been uncovered, he said.

"We have found no evidence that any aircraft was returned to service in an unsafe or unairworthy condition or in violation of any Federal Aviation Regulation," Kelly said. "Despite this scrutiny, I am confident that Alaska Airlines is one of the safest airlines in the business and that its maintenance program is one of the best in the industry."

Kelly announced the following actions:

-- An audit of all operational areas by an independent team of

outside safety experts. Members of that team, who will be

announced later this week, will report directly to Kelly.

-- The hiring of a vice president of safety who will report

directly to Kelly. The process of identifying qualified

candidates for the position will begin immediately, he said.

-- Establishment of a "safety hotline" for employees to contact

the chairman's office directly regarding any safety concern.

In addition to those initiatives, Kelly said the airline fully embraces the FAA's announcement of a comprehensive "white glove" audit, which is scheduled to begin April 3. And he said the carrier will continue to fully cooperate with all federal agencies.

On a parallel front, Kelly said the airline also plans to take steps to address a range of customer service issues that have arisen since the Flight 261 tragedy.

"I want to apologize to our customers for the inconveniences they've experienced in recent weeks," Kelly said. "Rest assured, we're working hard to get things back on track."

Kelly, 55, is chairman, president and chief executive officer of Alaska Air Group (NYSE:ALK), as well as chairman and chief executive officer of Alaska Airlines. The carrier serves 42 cities in Alaska, Mexico and five Western states.