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ALASKA AIR GROUP REPORTS FOURTH-QUARTER AND FULL-YEAR LOSS

 SEATTLE, Jan. 26 /PRNewswire/ -- Alaska Air Group Inc. (NYSE: ALK; PSE) today reported a fourth quarter 1992 net loss of $44.6 million, or $3.47 per share. The fourth quarter results include a special after-tax charge of $16.6 million for the retirement of Boeing 727 aircraft. Without this charge, the fourth quarter net loss would have been $28.0 million, or $2.23 per share. This compares with a 1991 fourth quarter net loss of $895,000, or $.19 per share.
 For the full year, the company lost $84.8 million, or $6.87 per share, including the effect of an accounting change for retiree medical benefits (FAS No. 106) and the special charge described above. Without these charges, the 1992 net loss would have been $63.6 million, or $5.28 per share. This compares with a 1991 profit of $10.3 million, or 27 cents per share.
 "Even absent the one-time charges, these losses are intolerable," said Raymond Vecci, chairman and chief executive officer. "They are a result of the continuing deep fare discounts that have plagued the industry for more than two years. With the number of financially troubled airlines growing, we don't look for improvement any time soon. Our challenge is to make the changes that will produce adequate return for our investors in a fundamentally changed environment.
 "We're taking actions needed to return this company to profitability and shape its long-term future. In the last six months we've taken steps to reduce capital spending commitments by $545 million and cut our cost structure by $50 million a year -- without sacrificing the competitive edge in customer service that has been our key to success." He added, "We've tailored our level of flying to the realities of the marketplace and will continue to analyze the amount of flying we do."
 Operating revenues for the fourth quarter fell 2 percent, to $258.9 million, on a 1-percent increase in passenger traffic. Yield, the average amount one passenger pays to fly one mile, declined 5 percent to 17.9 cents from 18.9 cents last year. Despite a 1-percent decrease in available seat mile capacity, operating expenses increased 20 percent to $318.4 million (a 10-percent increase excluding the special charge for the Boeing 727 write-down). Operating expenses in the quarter increased significantly due to a 13-percent increase in wages and benefits and a 25-percent increase in ownership costs from a net addition of 12 aircraft to the fleet. With few opportunities in the current environment to profitably fly those aircraft, average fleet utilization declined and operating costs per available seat mile increased. The pretax loss in the fourth quarter was $70.2 million, which includes the $26.0 million special charge. This compares to a $3.2 million pretax loss for 1991.
 Operating revenues for full year 1992 increased only 1 percent to $1.115 billion from $1.104 billion last year despite a 13-percent increase in passenger traffic. The traffic gains were offset by an 11-percent decline in yield, to 16.6 cents from 18.7 cents. Each one cent change in yield affects annual revenues by $60 million. With a 10-percent increase in available seat mile capacity, operating expenses increased 13 percent to $1.210 billion, as compared to $1.069 billion last year. The 1992 pretax loss was $125.7 million including the special charge. This compares to a $16.2 million pretax profit for 1991.
 Alaska Air Group Inc. is the parent company of Alaska Airlines Inc. and Horizon Air Industries Inc.
 ALASKA AIR GROUP INC.
 CONSOLIDATED STATEMENT OF INCOME
 (In thousands, except per share)
 Quarter Year
 1992 1991 1992 1991
 Operating Revenues:
 Passenger $228,757 $238,108 $1,000,618 $ 999,859
 Freight and mail 20,922 15,993 77,311 69,590
 Other 9,259 10,529 37,449 34,582
 Total operating
 revenues 258,938 264,630 1,115,378 1,104,031
 Operating Expenses:
 Wages and benefits 95,441 84,609 370,567 332,041
 Aircraft fuel 37,683 38,007 162,768 156,491
 Aircraft maintenance 21,614 18,657 87,687 82,983
 Aircraft rent 34,34 26,209 123,732 102,279
 Commissions 19,777 19,112 86,335 84,345
 Depreciation and
 amortization 14,691 13,086 56,757 51,767
 Special charges 26,000 -- 26,000 --
 Other 68,853 65,526 296,373 259,499
 Total operating
 expenses 318,408 265,206 1,210,219 1,069,405
 Operating income
 (loss) (59,470) (576) (94,841) 34,626
 Interest income 1,871 4,015 7,374 11,698
 Interest expense (10,954) (10,846) (43,223) (40,180)
 Interest capitalized (356) 2,414 6,102 8,301
 Other income - net (1,329) 1,832 (1,118) 1,762
 Total (10,768) (2,585) (30,865) (18,419)
 Income (loss) before
 tax and accounting
 change (70,238) (3,161) (125,706) 16,207
 Income tax expense
 (credit) (25,639) (2,266) (45,436) 5,869
 Income before
 accounting change (44,599) (895) (80,270) 10,338
 Cumulative effect
 of accounting
 change -- -- (4,567) --
 Net income (loss) $(44,599) (895) $ (84,837) $ 10,338
 Earnings per Common Share:
 Primary -
 Income (loss) before
 accounting change $(44,599) $ (895) $ (80,270) $ 10,338
 Preferred stock
 dividends 1,681 1,681 6,688 6,671
 Income (loss) before
 accounting change
 applicable to
 common shares (46,280) (2,576) 86,958) 3,667
 Cumulative effect
 of accounting
 change -- -- (4,567) --
 Net income (loss)
 applicable to
 common shares $(46,280) $ (2,576) $ (91,525) $ 3,667
 Average common shares
 outstanding (000) 13,320 13,220 13,309 13,413
 Earnings (loss) per common share:
 Before accounting
 change $ (3.47) $ (0.19) $ (6.53) $ 0.27
 Accounting change -- -- (0.34) --
 Net income $ (3.47) $ (.19) $ (6.87) $ 0.27
 ALASKA AIR GROUP INC.
 CONSOLIDATED BALANCE SHEET
 (In thousands)
 Dec. 31
 1992 1991
 Cash and marketable securities $ 83,431 $ 102,835
 Total current assets $ 250,485 $ 239,401
 Property and equipment-net 790,910 819,787
 Other assets 166,963 166,267
 Total assets $1,208,358 $1,225,455
 Current liabilities $ 335,718 $ 250,269
 Long-term debt and capital
 lease obligations 487,847 499,971
 Other liabilities and credits 126,834 129,821
 Redeemable convertible preferred stock 61,235 60,947
 Shareholders' equity 196,724 284,447
 Total liabilities and capital $1,208,358 $1,225,455
 AIRLINE DATA
 Selected airline data follows -
 Quarter Ended Dec. 31: Alaska Horizon
 Financial Data ($000): 1992 1991 1992 1991
 Operating revenues $ 206,093 $ 217,284 $ 53,319 $ 47,534
 Operating expenses 267,441 219,021 51,183 46,132
 Operating income (loss) (61,348) (1,737) 2,136 1,402
 Other income (expense) (8,225) (1,645) (111) (204)
 Income (loss) before
 tax $ (69,573 $ (3,382) $ 2,025 $ 1,198
 Operating Data:
 Revenue passengers (000) 1,330 1,360 600 536
 RPMs (000,000) 1,154 1,152 122 109
 ASMs (000,000) 2,170 2,227 228 203
 Passenger load factor (pct) 53.2 51.7 53.4 53.7
 Breakeven load factor (pct) 69.2 54.2 51.2 52.2
 Revenue per passenger
 mile (cents) 15.4 16.8 41.5 41.3
 Operating cost
 per ASM (cents) 12.3 9.8 22.5 22.7
 Year Ended Dec. 31:
 Financial Data ($000):
 Operating revenues $ 908,286 $ 921,519 $ 208,149 $ 183,142
 Operating expenses 1,009,299 893,236 200,844 175,245
 Operating income
 (loss) (101,013) 28,283 7,305 7,897
 Other income (expense) (19,802) (11,695) (1,568) (1,827)
 Income (loss) before
 tax and accounting
 change $ (120,815) $ 16,588 $ 5,737 $ 6,070
 Operating Data:
 Revenue passengers (000) 6,249 5,866 2,381 2,022
 RPMs (000,000) 5,537 4,948 486 405
 ASMs (000,000) 9,617 8,789 905 786
 Passenger load factor (pct) 57.6 56.3 53.7 51.5
 Breakeven load factor (pct) 66.4 55.9 52.1 49.6
 Revenue per passenger
 mile (cents) 14.5 16.7 40.7 42.9
 Operating cost
 per ASM (cents) 10.5 10.2 22.2 22.3
 ALASKA AIR GROUP INC.
 AIRLINE DATA (continued)
 Quarter Ended Dec. 31 Total(A)
 Financial Data ($000): 1992 1991
 Operating revenues $ 258,938 $ 264,630
 Operating expenses 318,408 265,206
 Operating income (loss) (59,470) (576)
 Other income (expense) (10,768) (2,585)
 Income (loss) before tax $ (70,238) $ (3,161)
 Operating Data:
 Revenue passengers (000) 1,930 1,896
 RPMs (000,000) 1,276 1,261
 ASMs (000,000) 2,398 2,430
 Passenger load factor (pct) 53.2 51.9
 Breakeven load factor (pct) 64.9 53.6
 Revenue per passenger mile (cents) 17.9 18.9
 Operating cost per ASM (cents) 13.3 10.9
 Year Ended Dec. 31:
 Financial Data ($000):
 Operating revenues $1,115,378 $1,104,031
 Operating expenses 1,210,219 1,069,405
 Operating income (loss) (94,841) 34,626
 Other income (expense) (30,865) (18,419)
 Income (loss) before
 tax and accounting change $ (125,706) $ 16,207
 Operating Data:
 Revenue passengers (000) 8,629 7,889
 RPMs (000,000) 6,023 5,353
 ASMs (000,000) 10,522 9,575
 Passenger load factor (pct) 57.2 55.9
 Breakeven load factor (pct) 63.7 55.1
 Revenue per passenger mile 16.6 18.7
 Operating cost per ASM 11.5 11.2
 (A) The "Consolidated" columns include nonairline entities where appropriate.
 -0- 1/26/93
 /CONTACT: Lou Cancelmi, 206-433-3170, or J. Ray Vingo, 206-433-3232, both of Alaska Air Group Inc./
 (ALK)


CO: Alaska Air Group Inc.; Alaska Airlines Inc.; Horizon Air Industries
 Inc. ST: Washington IN: AIR SU: ERN


LM -- SE018 -- 9320 01/26/93 17:51 EST
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