<PAGE>
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 March 31, 2000.
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 March
31, 2000.
1
<PAGE>
PART I. FINANCIAL STATEMENTS
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEET (UNAUDITED)
Alaska Airlines, Inc.
<TABLE>
<CAPTION>
ASSETS
- --------------------------------------------------------------------- ----------
December 31, March 31,
(In Millions) 1999 2000
- --------------------------------------------------------------------- ----------
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 132.3 $ 125.4
Marketable securities 196.5 147.4
Receivables from related companies 27.1 68.7
Receivables - net 70.9 96.1
Inventories and supplies 29.9 31.6
Prepaid expenses and other assets 120.5 154.6
- --------------------------------------------------------------------- ----------
Total Current Assets 577.2 623.8
- --------------------------------------------------------------------- ----------
Property and Equipment
Flight equipment 1,286.2 1,314.1
Other property and equipment 280.1 305.3
Deposits for future flight equipment 163.8 177.2
- --------------------------------------------------------------------- ----------
1,730.1 1,796.6
Less accumulated depreciation and amortization 421.6 439.2
- --------------------------------------------------------------------- ----------
1,308.5 1,357.4
- --------------------------------------------------------------------- ----------
Capital leases:
Flight and other equipment 44.4 44.4
Less accumulated amortization 31.6 32.2
- --------------------------------------------------------------------- ----------
12.8 12.2
- --------------------------------------------------------------------- ----------
Total Property and Equipment - Net 1,321.3 1,369.6
- --------------------------------------------------------------------- ----------
Intangible Assets - Subsidiaries 13.5 13.4
- --------------------------------------------------------------------- ----------
Other Assets 69.2 30.4
- --------------------------------------------------------------------- ----------
Total Assets $ 1,981.2 $ 2,037.2
===================================================================== ==========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
BALANCE SHEET (UNAUDITED)
Alaska Airlines, Inc.
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDER'S EQUITY
- --------------------------------------------------------------------- --------
December 31, March 31,
(In Millions Except Share Amounts) 1999 2000
- --------------------------------------------------------------------- --------
<S> <C> <C>
Current Liabilities
Accounts payable $ 88.3 $ 97.3
Payables to related companies 126.9 127.7
Accrued aircraft rent 68.3 60.4
Accrued wages, vacation and payroll taxes 70.7 55.4
Other accrued liabilities 89.6 123.4
Air traffic liability 183.2 252.3
Current portion of long-term debt and
capital lease obligations 66.5 97.0
- --------------------------------------------------------------------- --------
Total Current Liabilities 693.5 813.5
- --------------------------------------------------------------------- --------
Long-Term Debt and Capital Lease Obligations 337.0 300.1
- --------------------------------------------------------------------- --------
Other Liabilities and Credits
Deferred income taxes 143.3 137.3
Deferred income 34.2 33.3
Other liabilities 104.3 90.6
- --------------------------------------------------------------------- --------
281.8 261.2
- --------------------------------------------------------------------- --------
Shareholder's Equity
Common stock, $1 par value
Authorized: 1,000 shares
Issued: 1999 and 2000 - 500 shares -- --
Capital in excess of par value 225.8 225.8
Retained earnings 443.1 436.6
- --------------------------------------------------------------------- --------
668.9 662.4
- --------------------------------------------------------------------- --------
TOTAL LIABILITIES AND SHAREHOLDER'S EQUITY $1,981.2 $2,037.2
===================================================================== ========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
Alaska Airlines, Inc.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------- ------
Three Months Ended March 31
(In Millions) 1999 2000
- ----------------------------------------------------------------------- ------
<S> <C> <C>
Operating Revenues
Passenger $335.0 $355.6
Freight and mail 18.0 17.8
Other - net 18.9 20.9
- ----------------------------------------------------------------------- ------
Total Operating Revenues 371.9 394.3
- ----------------------------------------------------------------------- ------
Operating Expenses
Wages and benefits 122.8 138.6
Contracted services 13.5 15.2
Aircraft fuel 35.4 73.8
Aircraft maintenance 23.0 28.4
Aircraft rent 40.5 35.8
Food and beverage service 11.8 12.1
Commissions 22.1 15.6
Other selling expenses 19.4 20.4
Depreciation and amortization 15.9 18.6
Loss on sale of assets 0.1 0.0
Landing fees and other rentals 16.7 17.0
Other 24.6 31.0
- ----------------------------------------------------------------------- ------
Total Operating Expenses 345.8 406.5
- ----------------------------------------------------------------------- ------
Operating Income (Loss) 26.1 (12.2)
- ----------------------------------------------------------------------- ------
Nonoperating Income (Expense)
Interest income 5.2 6.1
Interest expense (3.8) (7.9)
Interest capitalized 1.7 2.6
Other - net 1.6 0.5
- ----------------------------------------------------------------------- ------
4.7 1.3
- ----------------------------------------------------------------------- ------
Income (loss) before income tax 30.8 (10.9)
Income tax expense (credit) 12.1 (4.4)
- ----------------------------------------------------------------------- ------
Net Income (Loss) $ 18.7 $ (6.5)
======================================================================= ======
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
STATEMENT OF SHAREHOLDER'S EQUITY (unaudited)
Alaska Airlines, Inc.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------
Capital in
Common Excess of Retained
(In Millions) Stock Par Value Earnings Total
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balances at December 31, 1999 $ - $225.8 $443.1 $668.9
Net loss for the three months
ended March 31, 2000 (6.5) (6.5)
- --------------------------------------------------------------------------------------------
Balances at March 31, 2000 $ - $225.8 $436.6 $662.4
============================================================================================
</TABLE>
See accompanying notes to financial statements.
5
<PAGE>
STATEMENT OF CASH FLOWS (UNAUDITED)
Alaska Airlines, Inc.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------- ------
Three Months Ended March 31 (In Millions) 1999 2000
- ----------------------------------------------------------------------- ------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 18.7 $ (6.5)
Adjustments to reconcile net income (loss) to cash:
Depreciation and amortization 15.9 18.6
Amortization of airframe and engine overhauls 10.1 11.1
Increase in deferred income taxes 12.1 (6.1)
Increase in accounts receivable (35.2) (66.8)
Decrease (increase) in other current assets (0.3) 2.4
Increase in air traffic liability 55.3 69.1
Increase (decrease) in other current liabilities (5.6) 20.4
Other-net 1.7 (16.2)
- ----------------------------------------------------------------------- ------
Net cash provided by operating activities 72.7 26.0
- ----------------------------------------------------------------------- ------
Cash flows from investing activities:
Purchases of marketable securities (25.7) (1.5)
Sales and maturities of marketable securities 74.6 50.6
Restricted deposits 2.8 1.1
Additions to flight equipment deposits (21.8) (26.4)
Additions to property and equipment (64.8) (50.3)
- ----------------------------------------------------------------------- ------
Net cash used in investing activities (34.9) (26.5)
- ----------------------------------------------------------------------- ------
Cash flows from financing activities:
Long-term debt and capital lease payments (6.3) (6.4)
- ----------------------------------------------------------------------- ------
Net cash provided by (used in) financing activities (6.3) (6.4)
- ----------------------------------------------------------------------- ------
Net increase (decrease) in cash and cash equivalents 31.5 (6.9)
Cash and cash equivalents at beginning of period 29.1 132.3
- ----------------------------------------------------------------------- ------
Cash and cash equivalents at end of period $ 60.6 $125.4
======================================================================= ======
Supplemental disclosure of cash paid during the period for:
Interest $ 2.9 $ 0.0
Income taxes 4.2 1.7
Noncash investing and financing activities None None
</TABLE>
See accompanying notes to financial statements.
6
<PAGE>
NOTES TO FINANCIAL STATEMENTS THAT HAVE CHANGED SIGNIFICANTLY DURING THE THREE
MONTHS ENDED MARCH 31, 2000
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,
1999. 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.
NOTE 2. PREPAID EXPENSES AND OTHER CURRENT ASSETS
At March 31, 2000, other current assets included $38.3 million of restricted
deposits which will be used to pay certain current liabilities. At December 31,
1999, these deposits were included with other assets. These deposits are
yen-denominated investments that are held to repay yen-denominated borrowings
that are due in the next 12 months.
NOTE 3. OTHER ACCRUED LIABILITIES
The frequent flyer award liability at December 31, 1999 and March 31, 2000 was
$40.0 million and $44.5 million, respectively.
7
<PAGE>
ALASKA AIRLINES FINANCIAL AND STATISTICAL DATA
<TABLE>
<CAPTION>
Three Months Ended March 31
-------------------------------
%
FINANCIAL DATA (IN MILLIONS): 1999 2000 CHANGE
----- ----- ------
<S> <C> <C> <C>
Operating Revenues:
Passenger $335.0 $355.6 6.1
Freight and mail 18.0 17.8 (1.1)
Other - net 18.9 20.9 10.6
--------------------
Total Operating Revenues 371.9 394.3 6.0
--------------------
Operating Expenses:
Wages and benefits 119.8 138.6 15.7
Employee profit sharing 3.0 0.0 (100.0)
Contracted services 13.5 15.2 12.6
Aircraft fuel 35.4 73.8 108.5
Aircraft maintenance 23.0 28.4 23.5
Aircraft rent 40.5 35.8 (11.6)
Food and beverage service 11.8 12.1 2.5
Commissions 22.1 15.6 (29.4)
Other selling expenses 19.4 20.4 5.2
Depreciation and amortization 15.9 18.6 17.0
Loss on sale of assets 0.1 0.0 NM
Landing fees and other rentals 16.7 17.0 1.8
Other 24.6 31.0 26.0
--------------------
Total Operating Expenses 345.8 406.5 17.6
--------------------
Operating Income (Loss) 26.1 (12.2) (146.7)
--------------------
Interest income 5.2 6.1
Interest expense (3.8) (7.9)
Interest capitalized 1.7 2.6
Other - net 1.6 0.5
--------------------
4.7 1.3
--------------------
Income (Loss) Before Income Tax $30.8 $(10.9) (135.4)
====================
OPERATING STATISTICS:
Revenue passengers (000) 3,072 3,168 3.1
RPMs (000,000) 2,701 2,814 4.2
ASMs (000,000) 4,117 4,231 2.8
Passenger load factor 65.6% 66.5% 0.9 pts
Breakeven load factor 59.9% 70.1% 10.2 pts
Yield per passenger mile 12.40c 12.64C 1.9
Operating revenue per ASM 9.03c 9.32C 3.2
Operating expenses per ASM 8.40c 9.61C 14.4
Fuel cost per gallon 48.5c 99.1C 104.6
Fuel gallons (000,000) 73.1 74.5 1.9
Average number of employees 8,885 9,279 4.4
Aircraft utilization (block hours/day) 11.1 10.9 (1.8)
Operating fleet at period-end 86 89 3.5
NM = Not Meaningful
c = cents
</TABLE>
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION FORWARD-LOOKING INFORMATION
This report may contain forward-looking statements that are based on the best
information currently available to management. These forward-looking statements
are intended to be subject to the safe harbor protection provided by Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Forward-looking statements are indicated by phrases such as "will",
"should", "the Company believes", "we expect" or any other language indicating a
prediction of future events. There can be no assurance that actual developments
will be those anticipated by the Company. Actual results could differ materially
from those projected as a result of a number of factors, some of which the
Company cannot predict or control. For a discussion of these factors, please see
Item 1 of the Company's Annual Report on Form 10-K for the year ended December
31, 1999.
RESULTS OF OPERATIONS
FIRST QUARTER 2000 COMPARED WITH FIRST QUARTER 1999
Net loss for the first quarter of 2000 was $6.5 million compared with a net
income of $18.7 million in 1999. The operating loss for the first quarter of
2000 was $12.2 million compared with an operating income of $26.1 million for
1999. The $38.3 million reduction in operating income was largely due to higher
fuel prices. Financial and statistical data is shown on page eight. A discussion
of this data follows.
REVENUES
Capacity increased by 2.8% primarily due to additional flights in the Southern
California, Mexico and Arizona markets. Traffic grew by 4.2%, resulting in a 0.9
point increase in passenger load factor. The Canada and Northern California
markets experienced the largest increases in load factor. Passenger yields were
up 1.9%, primarily due to fuel-related fare increases. Yields were up in all
major markets, with Canada showing the largest increase. The higher load factor
combined with the higher yield resulted in a 3.2% increase in revenue per
available seat mile (ASM). The combined result of the 2.8% capacity increase and
the 3.2% revenue per ASM increase was a 6.1% increase in passenger revenue.
Freight and mail revenues decreased 1.1%, primarily due to lower mail volumes.
Other-net revenues increased 10.6%, due to increased revenue from travel
partners in Alaska's frequent flyer program.
EXPENSES
Operating expenses grew by 17.6 % as a result of a 14.4% increase in cost per
ASM. The increase in cost per ASM was primarily due to higher fuel prices.
Without the higher fuel prices, cost per ASM would have increased 5.3%.
Explanations of significant year-over-year changes in the components of
operating expenses are as follows:
- Wages and benefits increased 15.7% due to a 4.4% increase in the
number of employees combined with a 10.8% increase in average wages
and benefits per employee. Employees were added in all areas to
service the 3.1% increase in passengers carried. New labor contracts,
step increases for pilots, and annual merit raises for management
employees all contributed to the higher wage rates.
9
<PAGE>
- Contracted services increased 13% due to higher security costs, higher
rates for ground handling services and increased navigation fees in
Canada and Mexico.
- Fuel expense increased 109%, primarily due to a 105% increase in the
price of fuel. The fuel consumption rate decreased 3.0% due to the use
of more fuel efficient B737-700 aircraft.
- Maintenance expense increased 24%, exceeding the 4% increase in block
hours, due to increased airframe component and engine overhaul
expense, and higher costs for landing gear repairs.
- Aircraft rent expense decreased 12%, due to leasing four fewer MD-80
aircraft and two fewer B737-400 aircraft.
- Commission expense decreased 29% on a 6% increase in passenger
revenue. In 2000, 66% of ticket sales were made through travel agents,
versus 69% in 1999. In 2000, 9% of ticket sales were made through
Alaska's Internet web site versus 4% in 1999. In addition, the
commission rate paid to travel agents decreased from 8% to 5%.
- Depreciation increased 17%, primarily due to owning 10 more aircraft
in 2000.
- Other expense increased 26%, primarily due to higher expenditures for
operating supplies, insurance, flight crew hotels, legal fees,
passenger remuneration and recruiting.
NONOPERATING INCOME (EXPENSE) Net nonoperating income decreased $3.4 million,
primarily due to higher interest expense resulting from new debt incurred in
late 1999.
LIQUIDITY AND CAPITAL RESOURCES
The table below presents the major indicators of financial condition and
liquidity.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
December 31, 1999 March 31, 2000 Change
- ------------------------------------------------------------------------------------------
(In millions, except debt-to-equity)
<S> <C> <C> <C>
Cash and marketable securities $ 328.8 $ 272.8 $ (56.0)
Working capital (deficit) (116.3) (189.7) (73.4)
Long-term debt and
capital lease obligations 337.0 300.1 (36.9)
Shareholders' equity 668.9 662.4 (6.5)
Debt-to-capital 34%:66% 31%:69% NA
Debt-to-capital assuming aircraft
operating leases are capitalized
at seven times annualized rent 67%:33% 66%:34% NA
- ------------------------------------------------------------------------------------------
</TABLE>
The Company's cash and marketable securities portfolio decreased by $56 million
during the first three months of 2000. Operating activities provided $26 million
of cash during this period. Cash was used for $77 million of capital
expenditures, including the purchase of one new Boeing 737 aircraft, flight
equipment deposits and airframe and engine overhauls, and for $6 million of debt
repayment.
10
<PAGE>
AIRCRAFT ACCIDENT On January 31, 2000, Alaska Airlines flight 261 from Puerto
Vallarta en route to San Francisco, went down in the water off the coast of
California near Point Mugu. The flight carried 83 passengers and five crew
members. There were no survivors. Consistent with industry standards, the
Company maintains insurance against aircraft accidents. The Company expects
substantially all accident response and civil litigation costs to be covered by
insurance. However, any aircraft accident, even if fully insured, could cause a
negative public perception of the Company with adverse financial consequences.
Principally as a result of added maintenance inspections Alaska carried out
after the accident, Alaska estimates that it canceled 6% of its flights in
February and 3% of its flights in March.
SAFETY ACTIVITIES In March 2000, to enhance existing lines of communication,
Alaska established a "safety hotline" for employees to contact the chairman's
office directly regarding any safety concern. In April 2000, an independent team
of outside safety experts began a full audit of the maintenance, flight
operations, hazardous materials handling and security areas of Alaska. The audit
is expected to take two months. In addition, Alaska is in the process of hiring
a vice president of safety, who will report directly to the chairman.
COMMITMENTS As of April 2000, the Company had firm orders for 20 aircraft
requiring aggregate payments of approximately $587 million, as set forth below.
In addition, Alaska has options to acquire 26 more B737s. Alaska expects to
finance the new planes with either leases, long-term debt or internally
generated cash.
<TABLE>
<CAPTION>
Delivery Period - Firm Orders
- -----------------------------------------------------------------------------
AIRCRAFT 2000 2001 2002 Total
- -----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Boeing B737-700 6 3 -- 9
Boeing B737-900 -- 6 5 11
- -----------------------------------------------------------------------------
Total 6 9 5 20
=============================================================================
Payments (Millions) $221 $229 $137 $587
=============================================================================
</TABLE>
RECENT ACCOUNTING DEVELOPMENTS In December 1999, the Securities and Exchange
Commission issued Staff Accounting Bulletin 101 (SAB 101), Revenue Recognition
in Financial Statements. SAB 101 gives specific guidance on the conditions that
must be met before revenue may be recognized. In March 2000, the SEC issued SAB
101A that permits the Company to implement SAB 101 in the second quarter of
2000. Four major U.S. airlines have adopted SAB 101 in the first quarter of 2000
and changed their method of accounting for the sale of frequent flyer miles.
Alaska believes that SAB 101 also applies to its sale of frequent flyer miles.
As a result, Alaska expects to implement SAB 101 during the second quarter of
2000 and change its method of revenue recognition for the sale of mileage
credits. The portion of the proceeds from sales of miles that represents
Alaska's obligation to provide future travel on Alaska will be deferred and
recognized as a component of passenger revenue when the service is rendered. The
portion of the proceeds from sales of miles that represents Alaska's obligation
to provide future travel on other airline partners will be recorded as a
liability to those partners. The remaining portion of the sales proceeds will
continue to be recognized immediately as part of other operating revenues.
During the second quarter of 2000, Alaska plans to recognize the cumulative
effect of adopting SAB 101 as a change in accounting principle as of January 1,
2000.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In December 1998, search warrants and a grand jury subpoena (for the U.S.
District Court for the Northern District of California) were served on Alaska,
initiating an investigation into the Company's Oakland maintenance base by the
U.S. Attorney for the Northern District of California. In addition, the Federal
Aviation Administration (FAA) issued a letter of investigation to Alaska
relating to maintenance performed on an MD-80 aircraft. In April 1999, the FAA
issued a notice of proposed civil penalty for $44,000. In July 1999, Alaska
responded informally to the notice, disputing that any violation occurred, and
to date the FAA has not taken any further action. In November 1999, the grand
jury issued a second subpoena on Alaska. The Company understands that
information developed by the National Transportation Safety Board in
connection with the crash of flight 261 on January 31, 2000 is being shared
with the U.S. Attorney and that the U.S. Attorney will use this information to
evaluate whether any crimes were committed in connection with flight 261. On
May 9, 2000 the U.S. Attorney issued a subpoena for records relating to the
aircraft involved in the flight 261 accident. To the Company's knowledge, no
charges have been filed as a result of the grand jury
investigation.
Alaska is currently a defendant in several lawsuits relating to flight 261.
The Company is unable to predict the amount of claims that may ultimately be
made against it or how those claims might be resolved. Consistent with
industry standards, the Company maintains insurance against aircraft
accidents. In April 2000, the FAA began an audit of Alaska's maintenance and
flight operations departments to ensure adherence to mandated procedures. The
FAA has completed the on-site portion of its inspection. During the audit, the
FAA requested that Alaska take several actions which Alaska has done or is
currently implementing. The Company has not been informed what further
actions, if any, the FAA intends to take as a result of its inspection.
The Company cannot predict the outcome of any of the pending civil or potential
criminal proceedings described above. As a result, the Company can give no
assurance that these proceedings, if determined adversely to Alaska, would not
have a material adverse effect on the financial position or results of
operations of the Company.
ITEM 5. OTHER INFORMATION
ALLIANCES WITH OTHER AIRLINES
During February, 2000, Canadian Airlines gave notice to Alaska that it is
canceling its marketing alliance with Alaska effective in August 2000 due to
it's merger with Air Canada.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 27 - Financial data schedule.
(b) On February 9, 2000 a report on Form 8-K was filed discussing the crash of
Alaska flight 261.
12
<PAGE>
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: May 9, 2000
/s/ John F. Kelly
- --------------------------------------
John F. Kelly
Chairman and Chief Executive Officer
/s/ Bradley D. Tilden
- --------------------------------------
Bradley D. Tilden
Vice President/Finance and Chief Financial Officer
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ALASKA
AIRLINES, INC. FIRST QUARTER 2000 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 125,400
<SECURITIES> 147,400
<RECEIVABLES> 164,800
<ALLOWANCES> 0
<INVENTORY> 31,600
<CURRENT-ASSETS> 154,600
<PP&E> 1,841,000
<DEPRECIATION> 471,400
<TOTAL-ASSETS> 2,037,200
<CURRENT-LIABILITIES> 813,500
<BONDS> 300,100
0
0
<COMMON> 1
<OTHER-SE> 662,399
<TOTAL-LIABILITY-AND-EQUITY> 2,037,200
<SALES> 394,300
<TOTAL-REVENUES> 394,300
<CGS> 406,500
<TOTAL-COSTS> 406,500
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,900
<INCOME-PRETAX> (10,900)
<INCOME-TAX> (4,400)
<INCOME-CONTINUING> (6,500)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (6,500)
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
