UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1999.
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from . . . . . . to . . . . . .
Commission file number 1-8957
ALASKA AIRLINES, INC.
(Exact name of registrant as specified in its charter)
Alaska 92-0009235
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
19300 Pacific Highway South, Seattle, Washington 98188
(Address of principal executive offices)
Registrant's telephone number, including area code: (206) 431-7079
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
The registrant has 500 common shares, par value $1.00, outstanding at
September 30, 1999.
<PAGE>
PART I. FINANCIAL STATEMENTS
ITEM 1. Financial Statements
BALANCE SHEET (unaudited)
Alaska Airlines, Inc.
<TABLE>
<CAPTION>
ASSETS
December 31, September 30,
(In Millions) 1998 1999
<S> <C> <C>
Current Assets
Cash and cash equivalents $29.1 $76.2
Marketable securities 277.2 170.1
Receivables from related companies 7.0 5.2
Receivables - net 66.0 87.0
Inventories and supplies 23.9 28.2
Prepaid expenses and other assets 103.5 96.3
Total Current Assets 506.7 463.0
Property and Equipment
Flight equipment 926.0 1,158.8
Other property and equipment 243.2 286.1
Deposits for future flight equipment 130.4 172.4
1,299.6 1,617.3
Less accumulated depreciation and amortization 364.1 406.5
935.5 1,210.8
Capital leases:
Flight and other equipment 44.4 44.4
Less accumulated amortization 29.7 31.2
14.7 13.2
Total Property and Equipment - Net 950.2 1,224.0
Intangible Assets - Subsidiaries 14.0 13.6
Other Assets 77.9 69.2
Total Assets $1,548.8 $1,769.8
</TABLE>
See accompanying notes to financial statements.
<PAGE>
BALANCE SHEET (unaudited)
Alaska Airlines, Inc.
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDER'S EQUITY
December 31, September 30,
(In Millions) 1998 1999
<S> <C> <C>
Current Liabilities
Accounts payable $63.8 $85.1
Payables to related companies 104.4 109.0
Accrued aircraft rent 62.1 62.1
Accrued wages, vacation and payroll taxes 68.9 70.7
Other accrued liabilities 88.3 106.1
Air traffic liability 177.7 213.6
Current portion of long-term debt and
capital lease obligations 27.2 27.1
Total Current Liabilities 592.4 673.7
Long-Term Debt and Capital Lease Obligations 171.5 153.9
Other Liabilities and Credits
Deferred income taxes 98.2 143.8
Deferred income 38.1 35.2
Other liabilities 99.1 109.6
235.4 288.6
Shareholder's Equity
Common stock, $1 par value
Authorized: 1,000 shares
Issued: 1998 and 1999 - 500 shares - -
Capital in excess of par value 225.8 225.8
Retained earnings 323.7 427.8
549.5 653.6
Total Liabilities and Shareholder's Equity $1,548.8 $1,769.8
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF INCOME (unaudited)
Alaska Airlines, Inc.
Three Months Ended September 30
(In Millions) 1998 1999
Operating Revenues
<S> <C> <C>
Passenger $406.2 $435.6
Freight and mail 22.7 21.9
Other - net 17.6 18.6
Total Operating Revenues 446.5 476.1
Operating Expenses
Wages and benefits 131.3 137.5
Contracted services 12.1 14.1
Aircraft fuel 44.4 59.5
Aircraft maintenance 19.6 23.7
Aircraft rent 42.1 40.1
Food and beverage service 13.5 13.1
Commissions 26.5 26.7
Other selling expenses 20.4 21.7
Depreciation and amortization 15.6 16.9
Loss on sale of assets 0.1 0.2
Landing fees and other rentals 15.9 18.3
Other 25.7 28.6
Total Operating Expenses 367.2 400.4
Operating Income 79.3 75.7
Nonoperating Income (Expense)
Interest income 6.5 5.5
Interest expense (4.3) (3.6)
Interest capitalized 1.0 2.2
Other - net (15.6) 0.5
(12.4) 4.6
Income before income tax 66.9 80.3
Income tax expense 26.3 31.6
Net Income $40.6 $48.7
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF INCOME (unaudited)
Alaska Airlines, Inc.
Nine Months Ended September 30
(In Millions) 1998 1999
Operating Revenues
<S> <C> <C>
Passenger $1,076.9 $1,157.1
Freight and mail 63.9 60.6
Other - net 52.8 58.9
Total Operating Revenues 1,193.6 1,276.6
Operating Expenses
Wages and benefits 367.1 390.5
Contracted services 36.9 40.7
Aircraft fuel 123.2 144.2
Aircraft maintenance 60.3 69.1
Aircraft rent 117.7 120.5
Food and beverage service 36.6 37.0
Commissions 71.9 73.2
Other selling expenses 56.3 61.7
Depreciation and amortization 46.0 49.3
Loss on sale of assets 0.3 0.4
Landing fees and other rentals 44.6 51.7
Other 73.3 80.8
Total Operating Expenses 1,034.2 1,119.1
Operating Income 159.4 157.5
Nonoperating Income (Expense)
Interest income 16.4 16.3
Interest expense (13.5) (11.1)
Interest capitalized 3.6 5.8
Other - net (14.2) 3.0
(7.7) 14.0
Income before income tax 151.7 171.5
Income tax expense 60.0 67.4
Net Income $91.7 $104.1
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF SHAREHOLDER'S EQUITY (unaudited)
Alaska Airlines, Inc.
Capital in
Common Excess of Retained
(In Millions) Stock Par Value Earnings Total
<S> <C> <C> <C> <C>
Balances at December 31, 1998 $ - $225.8 $323.7 $549.5
Net income for the nine months
ended September 30, 1999 104.1 104.1
Balances at September 30, 1999 $ - $225.8 $427.8 $653.6
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS (unaudited)
Alaska Airlines, Inc.
Nine Months Ended September 30 (In Millions) 1998 1999
<S> <C> <C>
Cash flows from operating activities:
Net income $91.7 $104.1
Adjustments to reconcile net income to cash:
Depreciation and amortization 46.0 49.3
Amortization of airframe and engine overhauls 25.5 32.9
Loss on sale of assets 0.3 0.4
Increase in deferred income taxes 30.8 45.6
Increase in accounts receivable (21.9) (19.2)
Decrease in other current assets 5.7 2.8
Increase in air traffic liability 26.9 35.9
Increase in other current liabilities 81.9 45.5
Other-net 1.3 4.2
Net cash provided by operating activities 288.2 301.5
Cash flows from investing activities:
Proceeds from disposition of assets 0.5 0.2
Purchases of marketable securities (158.9) (98.7)
Sales and maturities of marketable securities 54.1 205.9
Restricted deposits (1.7) 3.9
Additions to flight equipment deposits (112.1) (106.7)
Additions to property and equipment (233.0) (241.4)
Net cash used in investing activities (451.1) (236.8)
Cash flows from financing activities:
Proceeds from sale and leaseback transactions 288.0 -
Long-term debt and capital lease payments (35.4) (17.6)
Net cash provided by (used in) financing activities 252.6 (17.6)
Net change in cash and cash equivalents 89.7 47.1
Cash and cash equivalents at beginning of period 102.3 29.1
Cash and cash equivalents at end of period $192.0 $76.2
Supplemental disclosure of cash paid during the period for:
Interest (net of amount capitalized) $11.4 $6.4
Income taxes 28.1 21.8
Noncash investing and financing activities:
1998 - A $54.0 million note payable to Alaska Air Group was exchanged
for a non-interest bearing payable.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS THAT HAVE CHANGED SIGNIFICANTLY DURING THE
NINE MONTHS ENDED SEPTEMBER 30, 1999
Alaska Airlines, Inc.
Note 1. Basis of Presentation
The accompanying unaudited financial statements of Alaska Airlines, Inc.
(the Company or Alaska), should be read in conjunction with the financial
statements in the Company's annual report on Form 10-K for the year ended
December 31, 1998. They include all adjustments that are, in the opinion
of management, necessary for a fair presentation of the results for the
interim periods. The adjustments made were of a normal recurring nature.
The Company is a wholly owned subsidiary of Alaska Air Group, Inc. (Air
Group) whose principal subsidiaries are Alaska Airlines, Inc. and Horizon
Air Industries, Inc.
<PAGE>
<TABLE>
<CAPTION>
Alaska Airlines Financial and Statistical Data
Quarter Ended September 30 Nine Months Ended September 30
Financial Data (in millions): 1998 1999 % Change 1998 1999 % Change
<S> <C> <C> <C> <C> <C> <C>
Operating Revenues:
Passenger $406.2 $435.6 7.2 $1,076.9 $1,157.1 7.4
Freight and mail 22.7 21.9 (3.5) 63.9 60.6 (5.2)
Other - net 17.6 18.6 5.7 52.8 58.9 11.6
Total Operating Revenues 446.5 476.1 6.6 1,193.6 1,276.6 7.0
Operating Expenses:
Wages and benefits 123.3 130.0 5.4 351.1 374.4 6.6
Employee profit sharing 8.0 7.5 (6.3) 16.0 16.1 0.6
Contracted services 12.1 14.1 16.5 36.9 40.7 10.3
Aircraft fuel 44.4 59.5 34.0 123.2 144.2 17.0
Aircraft maintenance 19.6 23.7 20.9 60.3 69.1 14.6
Aircraft rent 42.1 40.1 (4.8) 117.7 120.5 2.4
Food and beverage service 13.5 13.1 (3.0) 36.6 37.0 1.1
Commissions 26.5 26.7 0.8 71.9 73.2 1.8
Other selling expenses 20.4 21.7 6.4 56.3 61.7 9.6
Depreciation and amortization 15.6 16.9 8.3 46.0 49.3 7.2
Loss on sale of assets 0.1 0.2 NM 0.3 0.4 NM
Landing fees and other rentals 15.9 18.3 15.1 44.6 51.7 15.9
Other 25.7 28.6 11.3 73.3 80.8 10.2
Total Operating Expenses 367.2 400.4 9.0 1,034.2 1,119.1 8.2
Operating Income 79.3 75.7 (4.5) 159.4 157.5 (1.2)
Interest income 6.5 5.5 16.4 16.3
Interest expense (4.3) (3.6) (13.5) (11.1)
Interest capitalized 1.0 2.2 3.6 5.8
Other - net (15.6) 0.5 (14.2) 3.0
(12.4) 4.6 (7.7) 14.0
Income Before Income Tax $66.9 $80.3 20.0 $151.7 $171.5 13.1
Operating Statistics:
Revenue passengers (000) 3,661 3,813 4.2 9,845 10,324 4.9
RPMs (000,000) 3,200 3,265 2.0 8,535 8,943 4.8
ASMs (000,000) 4,639 4,641 0.0 12,603 13,025 3.3
Passenger load factor 69.0% 70.3% 1.3 pts 67.7% 68.7% 1.0 pts
Breakeven load factor 57.3% 56.7% (0.6)pts 58.0% 58.2% 0.2 pts
Yield per passenger mile 12.69c 13.34c 5.1 12.62c 12.94c 2.5
Operating revenue per ASM 9.62c 10.26c 6.6 9.47c 9.80c 3.5
Operating expenses per ASM 7.92c 8.63c 9.0 8.21c 8.59c 4.7
Fuel cost per gallon 54.2c 72.8c 34.3 55.2c 62.7c 13.4
Fuel gallons (000,000) 81.9 81.8 (0.1) 223.1 230.1 3.1
Average number of employees 9,015 9,419 4.5 8,669 9,183 5.9
Aircraft utilization (block hours) 11.8 11.7 (0.8) 11.6 11.3 (2.6)
Operating fleet at period-end 85 88 3.5 85 88 3.5
NM = Not Meaningful
c = cents
</TABLE>
<PAGE>
ITEM 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
Results of Operations
Third Quarter 1999 Compared with Third Quarter 1998
Net income for the third quarter of 1999 was $48.7 million compared with a net
income of $40.6 million in 1998. The 1998 third quarter included an after-tax
charge of $10.1 million for a litigation settlement. Operating income for the
third quarter of 1999 was $75.7 million compared with $79.3 million for 1998.
Financial and statistical data is shown on page nine. A discussion of this
data follows.
Revenues
Capacity remained constant as additional flights in the Arizona and Nevada
markets were offset by no service to Russia in 1999 and some reductions in
flights in the Alaska markets. Traffic grew by 2.0%, resulting in a 1.3 point
increase in passenger load factor. The Canada and Nevada markets experienced
the largest increases in load factor. Passenger yields were up 5.1%, with
virtually all markets showing an increase over last year. New marketing
alliances with other airlines, improved yield management techniques and small
fare increases have helped improve yields. The higher load factor combined
with the higher yield resulted in a 6.6% increase in revenue per available seat
mile (ASM). Consequently, passenger revenues increased 7.2%.
Freight and mail revenues decreased 3.5%, due to lower average freight and mail
rates. Other-net revenues increased 5.7%, due to increased revenue from travel
partners in Alaska's frequent flyer program.
Expenses
Operating expenses grew by 9.0 % as a result of a 9.0% increase in cost per
ASM. The increase in cost per ASM was partly due to higher fuel prices in
1999. Without the higher fuel prices, cost per ASM would have increased 5.9%.
Explanations of significant year-over-year changes in the components of
operating expenses are as follows:
Wages and benefits increased 5.4% due to a 4.5% increase in the number
of employees. Employees were added in all areas to service the 4.2%
increase in passengers carried.
Contracted services increased 16% due to greater use of temporary
employees (particularly in computer systems development), higher
facility repair costs incurred, higher rates for ground handling
services and increased navigation fees in Canada and Mexico.
Fuel expense increased 34%, due to a 34% increase in the price of fuel.
Maintenance expense increased 21%, exceeding the 2% increase in block
hours, due to increased airframe and engine overhaul expense.
Commission expense increased 1% on a 7% increase in passenger revenue.
As a percentage of passenger revenue, commission expense decreased 5%,
from 5.9% to 5.6%. In 1999, 67% of ticket sales were made through
travel agents, versus 70% in 1998.
Other selling expenses increased 6%, in line with the 7% increase in
passenger revenues.
Depreciation increased 7%, primarily due to owning six more aircraft in
1999.
Landing fees and other rentals increased 15%, higher than the 1%
increase in landings, due to rate increases at Seattle, Portland and
several other airports.
Other expense increased 11%, primarily due to higher expenditures for
employee uniforms, recruiting, computer software, operating supplies,
utilities and building repairs.
Nonoperating Income (Expense) The 1998 third quarter included a $16.5 million
pretax charge for a litigation settlement. Excluding this charge, net
nonoperating items were essentially the same in both periods.
Nine Months 1999 Compared with Nine Months 1998
Net income for the nine months ended September 30, 1999 was $104.1 million,
compared with a net income of $91.7 million in 1998. Operating income for the
first nine months of 1999 was $157.5 million compared to $159.4 million for
1998.
Operating income decreased 1.2% to $157.5 million, resulting in a 12.3%
operating margin as compared to a 13.4% margin in 1998. Operating revenue per
ASM increased 3.5% to 9.80 cents while operating expenses per ASM increased
4.7% to 8.59 cents. The increase in revenue per ASM was due to a 2.5% increase
in system passenger yield combined with a 1.0 point increase in load factor.
Unit costs increased 4.7% due to higher fuel prices, increased maintenance
costs, lower aircraft utilization and higher wages and benefits.
Liquidity and Capital Resources
The table below presents the major indicators of financial condition and
liquidity.
<TABLE>
<CAPTION>
Dec. 31, 1998 Sep. 30, 1999 Change
(In millions, except debt-to-equity)
<S> <C> <C> <C>
Cash and marketable securities $306.3 $246.3 $(60.0)
Working capital (deficit) (85.7) (210.7) (125.0)
Long-term debt and
capital lease obligations 171.5 153.9 (17.6)
Shareholders' equity 549.5 653.6 104.1
Debt-to-equity 24%:76% 19%:81% NA
Debt-to-equity assuming aircraft
operating leases are capitalized
at seven times annualized rent 71%:29% 66%:34% NA
</TABLE>
The Company's cash and marketable securities portfolio decreased by $60 million
during the first nine months of 1999. Operating activities provided $302
million of cash during this period. Cash was used for $348 million of capital
expenditures, including the purchase of five new Boeing 737 aircraft, two
formerly leased Boeing 737s, flight equipment deposits and airframe and engine
overhauls, and for $18 million of debt repayment.
Commitments At September 30, 1999, the Company had firm orders for 25 aircraft
requiring aggregate payments of approximately $617 million, as set forth below.
<TABLE>
<CAPTION>
Delivery Period - Firm Orders
Aircraft 1999 2000 2001 2002 Total
<S> <C> <C> <C> <C> <C>
Boeing B737-700 4 7 4 -- 15
Boeing B737-900 -- -- 5 5 10
Total 4 7 9 5 25
Payments (Millions) $85 $225 $205 $102 $617
</TABLE>
Year 2000 Computer Issue The Company uses a significant number of computer
software programs and embedded operating systems that were not originally
designed to process dates beyond 1999. The Company has implemented a project
to ensure that the Company's systems will function properly in the year 2000
and thereafter. The Company's Y2K project comprises five phases for each
affected system: inventory, assessment, remediation, testing and
implementation. Inventory and assessment phases were completed for all systems
by first quarter 1999. As of September 30, 1999 the Company has completed
every phase, through implementation, of 98% of its mission-critical systems,
which is consistent with the industry as a whole as reported by the Air
Transport Association (ATA). Remediation, testing and implementation of any
remaining systems is scheduled to take place during the 4th quarter of 1999.
The Company believes that, with modifications to its existing software and
systems and/or conversions to new software, the year 2000 issue will not pose
significant operational problems. Most of the Company's information technology
projects in the last several years have made the affected systems year 2000
compliant. The direct costs of projects solely intended to correct year 2000
problems are currently estimated at less than $2 million. The Company does not
track certain costs attributable to year 2000, such as salaries of information
technology staff not dedicated entirely to the project. Additional systems
currently under review may require further resources. The Company does not
expect any cost increases to have a material effect on its results of
operations.
The Company is also in contact with its significant suppliers and vendors with
which its systems interface and exchange data or upon which its business
depends. These efforts are designed to minimize the extent to which its
business will be vulnerable to their failure to remediate their own year 2000
issues. The Company has received favorable Y2K readiness responses from all of
its mission-critical and 95% of its other high-priority vendors and suppliers,
and continues to follow up to ensure readiness predictions are being met. The
Company's business is also dependent upon certain governmental organizations or
entities such as the Federal Aviation Administration (FAA) that provide
essential aviation industry infrastructure. The Company is working with the
ATA and the International Air Transport Association (IATA) to monitor the
progress of FAA and airports in making their systems year 2000 compliant. In
addition, the Company is independently working with certain rural Alaska
airports. There can be no assurance that such third parties on which the
Company's business relies will successfully remediate their systems on a timely
basis. The Company's business, financial condition or results of operations
could be materially adversely affected by the failure of its systems or those
operated by other parties to operate properly beyond 1999. Areas that could be
adversely affected include flight operations, maintenance, planning,
reservations, sales, facilities equipment, finance, accounting and the frequent
flyer program.
The Company already has in place certain disaster contingency plans
anticipating the potential loss of essential services such as electricity and
financial accounting systems. The Company is building its year 2000
contingency planning on these existing plans. The Company is also developing
and executing additional contingency plans designed to allow continued
operation in the event of failure of key internal and third party systems or
products. This planning involves (a) making a list of critical operations
processes, (b) assessing the effect of their failure on safety, operations and
financial stability, (c) quantifying the risk of failure of each, and (d) based
on the foregoing, developing a discrete contingency plan for each potential
failure. Where applicable, the Company will communicate its plans to airports
to maximize coordination with their own contingency planning. The Company has
completed steps (a) to (c) and expects to complete its contingency planning
during the fourth quarter of 1999. The foregoing Year 2000 Computer Issue
comments include forward-looking statements regarding the performance of the
Company. Actual results may differ materially from these projections. Factors
that could cause results to differ include the availability of adequate
resources to complete the Company's year 2000 plan, the ability to identify and
remediate noncompliant systems, and the success of third parties in remediating
their year 2000 issues.
PART II. OTHER INFORMATION
ITEM 5. Other Information
Employees
In June 1999, a new 42-month contract covering approximately 1,100 aircraft
maintenance technicians, technician helpers, janitors and fleet service
employees was ratified. The contract establishes enhanced rates of pay,
retirement, health and 401(k) benefits. It also provides for a union shop and,
in the event the parties cannot reach agreement on a new contract, requires
binding arbitration of certain issues including rates of pay. The contract is
amendable December 25, 2002.
In October 1999, a new four-year contract covering approximately 2,000 flight
attendants was ratified. The contract calls for increases in wage rates,
improvements in benefits, work rule changes and scheduling flexibility
provisions. The contract is amendable in October, 2003.
In October 1999, a new three-year contract covering approximately 3,300
clerical, office and passenger service employees was ratified. The contract
calls for increases in wage rates and improvements in benefits, including a
matching component to the 401(k) plan. The contract is amendable October 29,
2002.
Alaska and the International Association of Machinists (IAM) are continuing
negotiation of a new contract (covering approximately 1,000 rampservice and
stock clerk employees) with the assistance of a federal mediator.
Alliances with Other Airlines
Alaska and Horizon have announced a number of new marketing alliances with
other airlines that allow reciprocal frequent flyer mileage accrual and
redemption privileges and codesharing on certain flights. The purpose of the
alliances is to enhance Alaska's and Horizon's revenues by (a) providing our
customers more value by offering them more travel destinations and better
mileage accrual/redemption opportunities, and (b) gaining access to more
connecting traffic from other airlines. The following table shows which of
these relationships were existing as of December 31, 1998 and which are new in
1999.
<TABLE>
<CAPTION>
Codesharing-- Codesharing--
Frequent Alaska Flight # Other Airline Flight #
Flyer on Flights Operated On Flights Operated
Agreement by Other Airlines by Alaska/Horizon
<S> <C> <C> <C>
Major U.S. or
International Airlines
American Airlines New New None
British Airways Existing None None
Canadian Airlines New New New
Continental Airlines New New New
KLM Existing None Existing
Northwest Airlines Existing Existing Existing
Qantas Existing None New
TWA Existing None None
Commuter Airlines
American Eagle Existing* Existing None
Era Aviation Existing* Existing None
Harbor Airlines Existing* Existing None
Trans States Airlines Existing* Existing None
PenAir Existing* Existing None
Reeve Aleutian Airways Existing* Existing None
* This airline does not have its own frequent flyer program. However, Alaska's
Mileage Plan members can accrue and redeem miles on this airline's route
system.
</TABLE>
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial data schedule.
(b) No reports on Form 8-K were filed during the third quarter of 1999.
Signatures
Pursuant to the requirements of the Securities Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
ALASKA AIRLINES, INC.
Registrant
Date: November 2, 1999
/s/ John F. Kelly
John F. Kelly
Chairman and Chief Executive Officer
/s/ Harry G. Lehr
Harry G. Lehr
Senior Vice President/Finance
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ALASKA
AIRLINES INC THIRD QUARTER 1999 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 76200
<SECURITIES> 170100
<RECEIVABLES> 92500
<ALLOWANCES> 0
<INVENTORY> 28200
<CURRENT-ASSETS> 46300
<PP&E> 1661700
<DEPRECIATION> 450900
<TOTAL-ASSETS> 1769800
<CURRENT-LIABILITIES> 673700
<BONDS> 153900
0
0
<COMMON> 1
<OTHER-SE> 653599
<TOTAL-LIABILITY-AND-EQUITY> 1769800
<SALES> 1276600
<TOTAL-REVENUES> 1276600
<CGS> 1119100
<TOTAL-COSTS> 1119100
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11100
<INCOME-PRETAX> 171500
<INCOME-TAX> 67400
<INCOME-CONTINUING> 104100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 104100
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
