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ALASKA TO REDEEM PREFERRED STOCK

 SEATTLE, May 18 /PRNewswire/ -- Raymond J. Vecci, chairman and chief executive officer of Alaska Air Group (NYSE: ALK; PSE) said today that the company will redeem its outstanding issue of 10.21-Percent Redeemable Preferred Stock. The announcement came at the annual shareholders meeting.
 The 1,187,500 shares are privately held by a single investor, International Lease Finance Corp. (ILFC). The stock was sold to ILFC in February 1990 for $59,375,000 as part of a comprehensive transaction wc?h included the lease of 22 Boeing 737-400 aircraft to Alaska Airlines.
 Alaska said that ILFC will provide the company a $27-million loan to assist with the stock redemption. The loan will carry a 7-percent interest rate, and be fully repaid over three years.
 "The redemption and refinancing of the preferred stock represents a key element in our cost reduction program," Vecci said. "Eliminating the preferred dividend will cut our after-tax capital cost by more than $4 million a year."
 The preferred stock required the payment of annual dividends of $6,383,000 out of after-tax earnings. The shares repurchased will be held as company treasury stock.
 The investment conversion options related to these shares will remain outstanding until February 1997, unless exercised or redeemed earlier. These options, issued at the same time as the preferred stock, were purchased by a group of Alaska management employees. The management group paid $3,125,000 for the options which allow the holders to acquire the preferred shares and convert them into 2,314,815 shares of common stock at $27.00 per share.
 -0- 5/18/93
 /CONTACT: J. Ray Vingo, 206-433-3232, or Bill Ehrlich, 206-431-7424, both of Alaska Air Group/
 (ALK)


CO: Alaska Air Group Inc. ST: Washington IN: AIR SU:

LM -- SE012 -- 9979 05/18/93 17:12 EDT
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Publication:PR Newswire
Date:May 18, 1993
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