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ALASKA AIR GROUP REPORTS THIRD-QUARTER LOSS

 ALASKA AIR GROUP REPORTS THIRD-QUARTER LOSS
 SEATTLE, Oct. 26 /PRNewswire/ -- Alaska Air Group Inc.


(NYSE: ALK; PSE) today reported a third-quarter net loss of $2.2 million, or 29 cents per share (both primary and fully diluted). This compares with a profit of $16.7 million, or 83 cents per share (fully diluted), for the 1991 quarter.
 Despite an 18-percent increase in passenger traffic, operating revenues for the third quarter of 1992 increased only 2 percent to $321.1 million from $314.4 million last year. The traffic gains were offset by a 15 percent decline in yield (the average amount one passenger pays to fly one mile; each one-cent change in yield affects annual revenues by $60 million). The yield for the quarter fell to 15.6 cents from 18.3 cents last year.
 Calling the results "simply awful," Chairman and Chief Executive Officer Raymond Vecci said, "Continuing deep fare discounts throughout the industry led to Alaska Air Group's worst ever third quarter."
 With a 10-percent increase in available seat mile capacity, operating expenses increased 13 percent to $317.3 million, as compared to $281.1 million last year. The pretax loss for the current quarter was $3.5 million compared to a $28.9 million profit for the 1991 period.
 For the nine months ended Sept. 30, 1992, the company reported a net loss of $35.7 million, or $3.06 per share. This compares with a 1991 nine-month net profit of $11.2 million, or 46 cents per share. Passenger traffic was up 16 percent for the period, but operating revenues rose only 2 percent to $856.4 million due to the decline in yields. Operating expenses were $891.8 million, an 11-percent increase over the $804.2 million for the 1991 nine-month period.
 "With the economic and competitive environment unlikely to change any time soon, our challenge now is to concentrate on the future, tailoring our strategies to these new realities," stated Vecci. Citing Alaska Airline's recent moves to reduce capital commitments by some $600 million, Vecci noted that, "We're evaluating every facet of our business to lower our long-term cost structure while maintaining our competitive service edge."
 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 Nine Months
 Ended Sept. 30: 1992 1991 1992 1991
 Operating Revenues:
 Passenger $289,276 $286,968 $771,861 $761,751
 Freight and mail 22,251 19,094 56,389 53,597
 Other 9,560 8,357 28,190 24,053
 Total operating revenues 321,087 314,419 856,440 839,401
 Operating Expenses:
 Wages and benefits 95,760 87,197 275,126 247,432
 Aircraft fuel 47,628 42,036 125,085 118,484
 Aircraft maintenance 20,463 21,602 66,073 64,326
 Aircraft rent 33,719 25,265 89,383 76,070
 Commissions 24,952 24,538 66,558 65,233
 Depreciation and amortization 14,076 13,425 42,066 38,681
 Other 80,696 67,021 227,520 193,973
 Total operating expenses 317,294 281,084 891,811 804,199
 Operating income (loss) 3,793 33,335 (35,371) 35,202
 Interest income 1,847 3,713 5,503 7,683
 Interest expense (10,659) (10,735) (32,269) (29,334)
 Interest capitalized 1,865 2,225 6,458 5,887
 Other income - net (305) 319 211 (70)
 Total (7,252) (4,478) (20,097) (15,834)
 Income (loss) before tax (3,459) 28,857 (55,468) 19,368
 Income tax expense (credit) (1,244) 12,121 (19,797) 8,135
 Net Income (loss) $(2,215) $ 16,736 $(35,671) $ 11,233
 Earnings (loss) per common share:
 Primary -
 Net income (loss) $(2,215) $ 16,736 $(35,671) $ 11,233
 Preferred stock dividend 1,681 1,681 5,007 4,990
 Income applicable to
 common shares $(3,896) $ 15,055 $(40,678) $ 6,243
 Average common shares
 outstanding (000) 13,320 13,436 13,306 13,429
 Earnings (loss) per
 common share $ (0.29) $ 1.12 $ (3.06) $ 0.46
 Fully Diluted -
 Income applicable to
 common shares -- $ 18,955 -- --
 Average common shares
 outstanding (000) -- 22,839 -- --
 Earnings per common share (A) $ 0.83 (A) (A)
 (A) Anti-dilutive
 ALASKA AIR GROUP INC.
 CONSOLIDATED BALANCE SHEET
 (In thousands)
 Sept. 30: 1992 1991
 Cash and marketable securities $ 103,620 $ 129,201
 Total current assets $ 258,770 $ 272,460
 Property and equipment-net 824,670 806,660
 Other assets 167,531 167,017
 Total assets $1,250,971 $1,246,137
 Current liabilities $ 310,996 $ 262,315
 Long-term debt and
 capital lease obligations 539,828 516,320
 Other liabilities 92,837 119,967
 Redeemable convertible
 preferred stock 61,163 60,875
 Shareholders' equity 246,147 286,660
 Total liabilities and capital $1,250,971 $1,246,137
 AIRLINE DATA
 Selected airline data follows
 (Dollars in thousands)
 Alaska Horizon
 Quarter Ended Sept. 30: 1992 1991 1992 1991
 Financial Data:
 Operating revenues $263,911 $265,028 $ 57,441 $ 49,548
 Operating expenses 266,686 236,086 50,908 44,878
 Operating income (loss) (2,775) 28,942 6,533 4,670
 Other expense (4,332) (1,735) (505) (478)
 Income (loss) before tax $(7,107) $ 27,207 $ 6,028 $ 4,192
 Operating Data:
 Revenue passengers (000) 1,933 1,711 707 573
 RPMs (000,000) 1,715 1,457 145 114
 ASMs (000,000) 2,652 2,418 241 210
 Passenger load factor (pct) 64.6 60.3 60.2 54.5
 Breakeven load factor (pct) 67.6 52.6 53.0 49.1
 Revenue per passenger
 mile (cents) 13.7 16.5 37.8 41.2
 Operating cost
 per ASM (cents) 10.1 9.8 21.2 21.4
 Nine Months Ended Sept. 30:
 Financial Data ($000):
 Operating revenues $702,193 $704,235 $154,830 $135,608
 Operating expenses 741,858 674,215 149,661 129,113
 Operating income (loss) (39,665) 30,020 5,169 6,495
 Other expense (11,577) (10,050) (1,457) (1,623)
 Income (loss) before tax $(51,242) $ 19,970 $ 3,712 $ 4,872
 Operating Data:
 Revenue passengers (000) 4,919 4,506 1,781 1,487
 RPMs (000,000) 4,383 3,796 364 296
 ASMs (000,000) 7,447 6,563 677 583
 Passenger load factor (pct) 58.9 57.9 53.7 50.7
 Breakeven load factor (pct) 65.4 56.4 52.4 48.7
 Revenue per passenger
 mile (cents) 14.3 16.7 40.5 43.5
 Operating cost
 per ASM (cents) 10.0 10.3 22.1 22.1
 ALASKA AIR GROUP INC.
 AIRLINE DATA (continued)
 Selected airline data follows
 Total(A)
 Quarter Ended Sept. 30: 1992 1991
 Financial Data ($000):
 Operating revenues $321,087 $314,419
 Operating expenses 317,294 281,084
 Operating income (loss) 3,793 33,335
 Other expense (7,252) (4,478)
 Income (loss) before tax $ (3,459) $ 28,857
 Operating Data:
 Revenue passengers (000) 2,640 2,284
 RPMs (000,000) 1,860 1,571
 ASMs (000,000) 2,893 2,627
 Passenger load factor (pct) 64.3 59.8
 Breakeven load factor (pct) 65.0 52.5
 Revenue per passenger mile (cents) 15.6 18.3
 Operating cost per ASM (cents) 11.0 10.7
 Nine Months Ended Sept. 30:
 Financial Data ($000):
 Operating revenues $856,440 $839,401
 Operating expenses 891,811 804,199
 Operating income (loss) (35,371) 35,202
 Other expense (20,097) (15,834)
 Income (loss) before tax $(55,468) $ 19,368
 Operating Data:
 Revenue passengers (000) 6,700 5,993
 RPMs (000,000) 4,747 4,092
 ASMs (000,000) 8,124 7,146
 Passenger load factor (pct) 58.4 57.3
 Breakeven load factor (pct) 63.3 55.7
 Revenue per passenger mile (cents) 16.3 18.6
 Operating cost per ASM (cents) 11.0 11.2
 (A) The "Consolidated" columns include nonairline entities where appropriate.
 -0- 10/26/92
 /CONTACT: J. Ray Vingo, 206-433-3232, or Lou Cancelmi, 206-433-3170, both of Alaska Air Group/
 (ALK) CO: Alaska Air Group Inc.; Alaska Airlines Inc.; Horizon Air Industries
 Inc. ST: Washington IN: AIR SU: ERN


LM -- SE003 -- 4690 10/26/92 10:48 EST
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Date:Oct 26, 1992
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