<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 6, 1996
REGISTRATION NO. 333-4835
=============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ALASKA AIR GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 91-1292054
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
19300 Pacific Highway South
Seattle, Washington 98188
(206) 433-3200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
KEITH LOVELESS
Corporate Secretary and Associate General Counsel
19300 Pacific Highway South
Seattle, Washington 98188
(206) 433-3131
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER,
INCLUDING AREA CODE, OF AGENT FOR SERVICE)
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Copies to:
Stephen A. McKeon, Esq.
L. Michelle Wilson, Esq.
Perkins Coie
1201 Third Avenue, 40th Floor
Seattle, Washington 98101-3099
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Approximate date of commencement of proposed sale
to the public: From time to time after the effective
date of this Registration Statement.
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If any of the securities being registered on this form are to be
offered pursuant to dividend reinvestment plans, please check the following box.
/ /
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If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended, other than securities offered only in
connection with dividend or interest reinvestment plans, check the following
box. /x/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act of 1993, as amended, please
check the following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same offering.
/ / _______________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act of 1993, as amended, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /_______________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
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TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM OFFERING PROPOSED MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED (1) PRICE PER UNIT (2) OFFERING PRICE (2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Convertible Debt Securities of
Alaska Air Group, Inc.......... 100%
Common Stock, $1.00 par value, of
Alaska Air Group, Inc. (3)..... _
Total.......................... $182,250,000 $182,250,000 $62,845(4)
====================================================================================================================================
</TABLE>
(1) If any of these securities are issued at an original issue discount, the
principal amount will be increased such that the aggregate proceeds will
equal $182,250,000.
(2) Estimated solely for the purpose of computing the registration fee.
(3) Includes shares of Common Stock as may be issued pursuant to the
Prospectus relating solely to the Common Stock or issuable upon
conversion of Convertible Debt Securities. Includes rights to purchase
Series A Participating Preferred Stock of Alaska Air Group, Inc.
associated with the Common Stock.
(4) Previously paid.
The registrant has filed a Registration Statement on Form S-3 (No.
33-52265) which first became effective on March 23, 1994. Pursuant to Rule 429
under the Securities Act of 1933, as amended, (i) the Prospectus contained
herein relating solely to convertible debt securities of Alaska Air Group, Inc.
relates to the principal amount of $200,000,000 of securities (together with
Common Stock of Alaska Air Group, Inc. issuable upon conversion) covered by
Registration Statement No. 33-52265, of which securities in the principal amount
of $67,750,000 remain unissued and securities in the principal amount of
$17,750,000 are being carried forward with respect to the Prospectus contained
herein relating solely to the convertible debt securities of Alaska Air Group,
Inc., and (ii) the Prospectuses contained herein relate to the principal amount
of $182,250,000 of securities (together with Common Stock of Alaska Air Group,
Inc. issuable upon conversion) covered by this Registration Statement, all of
which remain unissued. A filing fee of $68,966 was paid in connection with
Registration Statement No. 33-52265.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
<PAGE> 3
EXPLANATORY NOTE
This Registration Statement consists of two separate forms of
Prospectuses, covering securities to be registered as follows:
(1) Convertible Debt Securities of Alaska Air Group, Inc. and
(2) Common Stock of Alaska Air Group, Inc.
Neither of these Prospectuses will be used to consummate sales of
securities unless accompanied by a Prospectus Supplement applicable to the
securities offered.
<PAGE> 4
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE> 5
SUBJECT TO COMPLETION, DATED AUGUST 6, 1996
PROSPECTUS
ALASKA AIR GROUP, INC.
CONVERTIBLE DEBT SECURITIES
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Alaska Air Group, Inc. ("Air Group") may from time to time offer its
convertible debt securities (the "Convertible Debt Securities"), consisting of
debentures, notes and/or other evidences of indebtedness representing unsecured
obligations of Air Group convertible into Common Stock, par value $1.00 per
share ("Common Stock"). The Convertible Debt Securities offered pursuant to this
Prospectus may be issued in one or more series or issuances and will be limited
to $200,000,000 aggregate public offering price. Certain specific terms of the
Convertible Debt Securities in respect of which this Prospectus is being
delivered are set forth in the accompanying Prospectus Supplement (the
"Prospectus Supplement"), including, where applicable, the specific designation,
aggregate principal amount, the denomination, maturity, premium, if any, the
rate (which may be fixed or variable), time and method of calculating payment of
interest, if any, the place or places where principal of, premium, if any, and
interest, if any, on such Convertible Debt Securities will be payable, any terms
of redemption at the option of Air Group or the holder, any sinking fund
provisions, terms for conversion into Common Stock, the initial public offering
price and other special terms. The Prospectus Supplement will indicate whether
the Convertible Debt Securities will be Convertible Senior Debt Securities,
which will rank equally with all other unsubordinated and unsecured indebtedness
of Air Group, or as Convertible Subordinated Debt Securities which will be
subordinated in right of payment to all Senior Indebtedness of Air Group (as
hereinafter defined). See "Description of Convertible Debt
Securities--Subordination of Convertible Subordinated Debt Securities."
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
Air Group may sell the Convertible Debt Securities to or through
underwriters, through dealers or agents or directly to purchasers. See "Plan of
Distribution." The accompanying Prospectus Supplement sets forth the names of
any underwriters, dealers or agents involved in the sale of the Convertible Debt
Securities in respect of which this Prospectus is being delivered, and any
applicable fee, commission or discount arrangements with them.
This Prospectus may not be used to consummate sales of Convertible Debt
Securities unless accompanied by a Prospectus Supplement applicable to the
Convertible Debt Securities being sold.
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THE DATE OF THIS PROSPECTUS IS __________, 1996.
<PAGE> 6
No dealer, salesperson or other individual has been authorized to give
any information or to make any representations not contained in this Prospectus
in connection with the offering covered by this Prospectus. If given or made,
such information or representations must not be relied upon as having been
authorized by Air Group or the Underwriter. This Prospectus does not constitute
an offer to sell, or a solicitation of an offer to buy, the Convertible Debt
Securities in any jurisdiction where, or to any person to whom, it is unlawful
to make such offer or solicitation. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create an implication
that there has not been any change in the facts set forth in this Prospectus or
in the affairs of Air Group since the date hereof.
AVAILABLE INFORMATION
Air Group is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and, in accordance therewith,
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Such reports and other information may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549; 75 World Trade Center,
Suite 1300, New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material may also be
obtained at prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, such
material filed by Air Group may be inspected and copied at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form
S-3 (Registration No. 33-52265) filed by Air Group and Alaska Airlines, Inc.
("Alaska") with the Commission under the Securities Act of 1933, as amended (the
"Securities Act"), and a part of a registration statement filed on Form S-3
(Registration No. 333-4835) by Air Group with the Commission under the
Securities Act (such registrations statements collectively, together with all
amendments and exhibits, the "Registration Statements"). This Prospectus does
not contain all of the information included in the Registration Statements,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. Statements contained herein concerning the provisions of any
document do not purport to be complete and, in each instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statements
or otherwise filed with the Commission. Each such statement is subject to and
qualified in its entirety by such reference. Reference is made to such
Registration Statements and to the exhibits relating thereto for further
information with respect to Air Group and the Convertible Debt Securities
offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission pursuant to the
1934 Act and are incorporated into this Prospectus by reference and made a part
hereof: Air Group's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, Air Group's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1996, Air Group's Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 1996, the description of Air Group's Common
Stock contained in Air Group's Registration Statement on Form 8-A filed with the
Commission on September 19, 1985, including any amendments or reports filed for
the purposes of updating such description, and the description of the rights to
purchase Series A Participating Preferred Stock in Air Group's Registration
Statement on Form 8-A filed with the Commission on December 11, 1986, including
any amendments or reports filed for purposes of updating such description.
All documents filed by Air Group pursuant to Section 13(a), 13(c), 14
or 15(d) of the 1934 Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
in this Prospectus, and to be a part hereof from the date of filing of such
documents. Any statement incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus. Air Group will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any document incorporated by reference in this Prospectus
(other than
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exhibits to such documents unless such exhibits are specifically incorporated by
reference to such documents). Requests for such copies should be directed to the
office of the Corporate Secretary, Alaska Air Group, Inc., P.O. Box 68947,
Seattle, Washington 98168 (telephone (206) 433-3131).
AIR GROUP AND ALASKA
Air Group is a holding company incorporated in Delaware in 1985. Its
principal subsidiaries are Alaska and Horizon Air Industries, Inc. ("Horizon").
Alaska, founded in 1932, provides scheduled air transportation to 37 cities in
Alaska, Washington, Oregon, Nevada, California and Arizona, three cities in
Mexico, four cities in Russia, one city in Canada and many smaller communities
in Alaska and California through code-sharing agreements with local carriers. As
of December 31, 1995, Alaska operated 24 owned and 50 leased jet aircraft with
an average age of 6.6 years. During 1995, Alaska entered into a marketing
agreement with Northwest Airlines whereby certain Alaska flights and certain
Northwest flights are dual-designated in airline computer reservation systems as
Alaska Airlines and Northwest Airlines. Horizon, a regional commuter carrier
founded in 1981, provides scheduled air transportation to 36 cities in
Washington, Oregon, Montana, Idaho, California and Wyoming, as well as four
cities in Canada. Horizon provides interconnecting passenger traffic to Alaska
Airlines through its major hub cities, Seattle, Portland and Spokane. As of
December 31, 1995, Horizon operated five owned and 62 leased aircraft with an
average age of 9.8 years. The principal executive offices of Air Group are
located at 19300 Pacific Highway South, Seattle, Washington 98188 (telephone
(206) 433-3200).
For the year ended December 31, 1995, Air Group's consolidated
operating revenues were $1.4 billion, of which 89% came from scheduled passenger
services, 7% came from freight and mail, and 4% came from mileage plan partners
and other nonpassenger sources. Alaska carried approximately 10.1 million
passengers in 1995 and accounted for approximately 80% of Air Group's
consolidated 1995 operating revenues. Horizon carried approximately 3.8 million
passengers in 1995 and accounted for the remaining 20% of Air Group's
consolidated 1995 operating revenues.
In each year since 1973, Alaska has carried more passengers between
Alaska and the U.S. mainland than any other airline. Passenger traffic within
Alaska and between Alaska and the U.S. mainland accounted for 27% of Alaska's
total revenue passenger miles in 1995, while West Coast traffic accounted for
66% and the Mexico markets 7%. Based on passenger enplanements, Alaska's leading
airports are Seattle, Portland, Anchorage and Los Angeles. Based on revenues,
its leading nonstop routes were Seattle-Anchorage, Seattle-Los Angeles and
Seattle-San Francisco.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement,
the net proceeds to Air Group from the sale of the Convertible Debt Securities
offered hereby will be added to the working capital of Air Group and will be
available for general corporate purposes, among which may be the repayment of
outstanding indebtedness and financing of capital expenditures by Alaska and
Horizon, including the acquisition of aircraft and related equipment.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
for Air Group for the periods indicated. Earnings represents earnings before
accounting change, income tax expense and fixed charges (excluding interest
capitalized). Fixed charges consist of interest and the portion of rental
expense deemed representative of the interest factor.
3
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<TABLE>
<CAPTION>
1996 1995 1994 1993 1992 1991
------------------------- -------------------------------------------------------------------
Six Months Ended June 30, Year Ended December 31,
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<S> <C> <C> <C> <C> <C> <C>
Ratio .......................... 1.32 1.28 1.36 (a) (a) 1.10
</TABLE>
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(a) For the years ended December 31, 1993 and 1992, Air Group's earnings were
inadequate to cover fixed charges by $46.3 million and $131.8 million,
respectively.
DESCRIPTION OF CONVERTIBLE DEBT SECURITIES
The Convertible Senior Debt Securities are to be issued under an
Indenture between Air Group and a Trustee (the "Convertible Senior Debt
Indenture"). The Convertible Subordinated Debt Securities are to be issued under
an Indenture between Air Group and a Trustee (the "Convertible Subordinated Debt
Indenture"). The Convertible Senior Debt Securities Indenture and the
Convertible Subordinated Debt Securities Indenture are referred to herein
individually as the "Indenture" and collectively as the "Indentures." A copy of
each Indenture is filed as an exhibit to the Registration Statement. Information
regarding the Trustee will be set forth in the applicable Prospectus Supplement.
The Convertible Debt Securities offered pursuant to this Prospectus
will be limited to $200,000,000 aggregate principal amount (or such greater
amount, if Convertible Debt Securities are issued at an original issue discount,
as shall result in aggregate proceeds of $200,000,000 to Air Group). The
statements herein relating to the Convertible Debt Securities and the Indentures
are summaries and are subject to the detailed provisions of the Indentures. The
following summaries of certain provisions of the Indentures do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indentures, including the definitions therein of
certain terms capitalized in this Prospectus. Whenever particular Sections or
defined terms of the Indentures are referred to herein or in a Prospectus
Supplement, such Sections or defined terms are incorporated herein or therein by
reference.
GENERAL
The Indentures do not limit the aggregate principal amount of
Convertible Debt Securities which may be issued thereunder and provide that
Convertible Debt Securities may be issued from time to time in one or more
series. The Convertible Senior Debt Securities will be unsecured and
unsubordinated obligations of Air Group and will rank on a parity with all other
unsecured and unsubordinated indebtedness of Air Group. The Convertible
Subordinated Debt Securities will be unsecured obligations of Air Group and, as
set forth below under "Subordination of Convertible Debt Securities," will be
subordinated in right of payment to all Senior Indebtedness. The Indenture does
not limit Air Group's right to incur additional Senior Indebtedness. As of
December 31, 1995, Senior Indebtedness of Air Group on a consolidated basis
aggregated approximately $467,409,000.
Reference is made to the Prospectus Supplement which accompanies this
Prospectus for a description of the specific series of Convertible Debt
Securities being offered thereby, including: (1) the specific designation of
such Convertible Debt Securities; (2) any limit upon the aggregate principal
amount of such Convertible Debt Securities; (3) the date or dates on which the
principal of such Convertible Debt Securities will mature or the method of
determining such date or dates; (4) the rate or rates (which may be fixed or
variable) at which such Convertible Debt Securities will bear interest, if any,
or the method of calculating such rate or rates; (5) the date or dates from
which interest, if any, will accrue or the method by which such date or dates
will be determined; (6) the date or dates on which interest, if any, will be
payable and the record date or dates therefor; (7) the place or places where
principal of, premium, if any, and interest, if any, on such Convertible Debt
Securities will be payable;
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(8) the period or periods within which, the price or prices at which, and the
terms and conditions upon which, such Convertible Debt Securities may be
redeemed, in whole or in part, at the option of Air Group; (9) the obligation,
if any, of Air Group to redeem or purchase such Convertible Debt Securities
pursuant to any sinking fund or analogous provisions, upon the happening of a
specified event or at the option of a holder thereof and the period or periods
within which, the price or prices at which and the terms and conditions upon
which, such Convertible Debt Securities shall be redeemed or purchased, in whole
or in part, pursuant to such obligations; (10) the denominations in which such
Convertible Debt Securities are authorized to be issued; (11) the terms and
conditions upon which conversion will be effected, including the conversion
price, the conversion period and other conversion provisions in addition to or
in lieu of those described below; (12) if other than the principal amount
thereof, the portion of the principal amount of such Convertible Debt Securities
which will be payable upon declaration of the acceleration of the maturity
thereof or the method by which such portion shall be determined; (13) the person
to whom any interest on any such Convertible Debt Security shall be payable if
other than the person in whose name such Convertible Debt Security is registered
on the applicable record date; (14) any addition to, or modification or deletion
of, any Event of Default (as hereinafter defined) or any covenant of Air Group
specified in the Indenture with respect to such Convertible Debt Securities;
(15) the application, if any, of such means of covenant defeasance as may be
specified for such Convertible Debt Securities; (16) if applicable, provisions
related to the issuance of Convertible Debt Securities in book entry form; (17)
any addition to, or modification or deletion of, any provision of the Indenture
related to the subordination of such Convertible Debt Securities; and (18) any
other special terms pertaining to such Convertible Debt Securities. Unless
otherwise specified in the applicable Prospectus Supplement, the Convertible
Debt Securities will not be listed on any securities exchange. (Section 3.1 of
the Indentures.)
Unless otherwise specified in the applicable Prospectus Supplement,
Convertible Debt Securities will be issued in fully registered form without
coupons. Where Convertible Debt Securities of any series are issued in bearer
form, the special restrictions and considerations, including special offering
restrictions and special federal income tax considerations, applicable to any
such Convertible Debt Securities and to payment on and transfer and exchange of
such Convertible Debt Securities will be described in the applicable Prospectus
Supplement.
Convertible Debt Securities may be sold at a substantial discount below
their stated principal amount, bearing no interest or interest at a rate which
at the time of issuance is below market rates. Certain federal income tax
consequences and special considerations applicable to any such Convertible Debt
Securities will be described in the applicable Prospectus Supplement.
The general provisions of the Indentures do not afford holders of the
Convertible Debt Securities protection in the event of a highly leveraged or
other transaction involving Air Group or Alaska that may adversely affect
holders of Convertible Debt Securities. Any covenants or other provisions
included in a supplement or amendment to any Indenture for the benefit of the
holders of any particular series of Convertible Debt Securities will be
described in the applicable Prospectus Supplement.
PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
Unless otherwise provided in the applicable Prospectus Supplement,
payments in respect of the Convertible Debt Securities will be made at the
office or agency of Air Group maintained for that purpose, as Air Group may
designate from time to time, except that, at the option of Air Group, interest
payments, if any, on Convertible Debt Securities in registered form may be made
by (i) checks mailed by the Trustee to the holders of Convertible Debt
Securities entitled thereto at their registered addresses or (ii) wire transfer
to an account maintained by the Person entitled thereto as specified in the
Register. (Sections 3.7 and 9.2 of the Indentures.) Unless otherwise indicated
in an applicable Prospectus Supplement, payment of any installment of interest
on Convertible Debt Securities in
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registered form will be made to the Person in whose name such Convertible Debt
Security is registered at the close of business on the regular record date for
such interest. (Section 3.7 of the Indentures.)
Unless otherwise provided in the applicable Prospectus Supplement,
Convertible Debt Securities in registered form will be transferable or
exchangeable at the agency of Air Group maintained for such purpose as
designated by Air Group from time to time. (Sections 3.5 and 9.2 of the
Indentures.) Convertible Debt Securities may be transferred or exchanged without
service charge, other than any tax or other governmental charge imposed in
connection therewith. (Section 3.5 of the Indentures.)
CONVERSION RIGHTS
The terms on which Convertible Debt Securities of any series are
convertible into Common Stock will be set forth in the Prospectus Supplement
relating thereto. Such terms shall include provisions as to whether conversion
is mandatory, at the option of the holder, or at the option of Air Group, and
may include provisions in which the number of shares of Common Stock to be
received by the holders of Convertible Debt Securities would be calculated
according to the market price of Common Stock as of a time stated in the
Prospectus Supplement.
SUBORDINATION OF CONVERTIBLE SUBORDINATED DEBT SECURITIES
Unless otherwise provided in the applicable Prospectus Supplement, the
obligation of Air Group to make payment on account of the principal of, and
premium, if any, and interest on Convertible Subordinated Debt Securities will
be subordinated and junior in right of payment, as set forth in the Convertible
Subordinated Debt Securities Indenture and described below, to the prior payment
in full of all Senior Indebtedness.
"Senior Indebtedness" means all Indebtedness of Air Group unless such
Indebtedness, by its terms or the terms of the instrument creating or evidencing
it, is subordinate in right of payment to or pari passu with the Convertible
Subordinated Debt Securities. (Section 1.1 of the Convertible Subordinated Debt
Securities Indenture.) Air Group's 7 3/4% Convertible Subordinated Debentures
Due 2010 and 6 7/8% Convertible Subordinated Debentures Due 2014 do not
constitute Senior Indebtedness. "Indebtedness," when used with respect to Air
Group, means, without duplication, the principal of, and premium, if any, and
accrued and unpaid interest (including post-petition interest) on (i)
indebtedness of Air Group for money borrowed, (ii) Indebtedness guarantees by
Air Group of indebtedness for money borrowed by any other person, (iii)
indebtedness of Air Group evidenced by notes, debentures, bonds or other
instruments of indebtedness for payment of which Air Group is responsible or
liable, by Indebtedness guarantees or otherwise, (iv) obligations for the
reimbursement of any obligor on any letter of credit, bankers' acceptance or
similar credit transaction, (v) obligations of Air Group under Capital Leases
and Flight Equipment leases, (vi) obligations under interest rate and currency
swaps, caps, collars, options, forward or spot contracts or similar
arrangements or with respect to foreign currency hedges, and (vii) commitment
and other bank financing fees under contractual obligations associated with
bank debt; provided, however, that Indebtedness shall not include amounts owed
to trade creditors in the ordinary course of business. (Section 1.1 of the
Convertible Subordinated Debt Securities Indenture.)
No payment on account of principal of, or premium, if any, or interest
on, the Convertible Subordinated Debt Securities may be made if (i) any Senior
Indebtedness is not paid when due or (ii) the maturity of any Senior
Indebtedness is accelerated unless, in either case, (a) such failure to pay or
acceleration relates to such Senior Indebtedness in an aggregate amount equal to
less than $25 million, (b) the default has been cured or waived or has ceased to
exist, (c) such acceleration has been rescinded, or (d) such Senior Indebtedness
has been paid in full. During the continuance of any default (other than a
default described in the preceding sentence) on Senior Indebtedness pursuant to
which the maturity thereof may be accelerated immediately (i.e., without further
notice and after the expiration of any applicable grace periods) and upon notice
by holders of at least $25 million of
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Senior Indebtedness to Air Group and the Trustee (a "Payment Notice"), Air Group
may not make any payments (a "Payment Block") on the Convertible Subordinated
Debt Securities until 120 days have elapsed following the receipt of such
Payment Notice. After 120 days Air Group may resume payment on the Convertible
Subordinate Debt Securities unless payment is prohibited by the first sentence
of this paragraph. No more than one Payment Notice is permitted for any one
default on Senior Indebtedness (which shall not bar subsequent Payment Notices
for other such defaults). All events of default on Senior Indebtedness occurring
within a 30-day period shall be treated as one event of default on such Senior
Indebtedness for purposes of the preceding sentence. No more than two Payment
Blocks are permitted within any 12-month period. Except as provided in the next
paragraph, a failure to make any payment with respect to the Convertible
Subordinated Debt Securities as a result of the foregoing provisions will not
limit the right of the holders of the Convertible Subordinated Debt Securities
to accelerate the maturity thereof as a result of such payment default. (Section
13.2 of the Convertible Subordinated Debt Securities Indenture.)
Upon any distribution of the assets of Air Group upon any dissolution,
total or partial liquidation or reorganization of or similar proceeding relating
to Air Group, the holders of Senior Indebtedness will be entitled to receive
payment in full before the holders of the Convertible Subordinated Debt
Securities are entitled to receive any payment. Upon any Event of Default with
respect to the Convertible Subordinated Debt Securities, the Trustee or holders
of 25% of the Convertible Subordinated Debt Securities must give notice of such
Event of Default and the intention to accelerate to Air Group and any other
holders of Senior Indebtedness which have theretofore requested such notice, and
such acceleration shall not become effective unless and until such Event of
Default is continuing on the 60th day after the date of delivery of such notice
of intention to accelerate; provided, however, that the Convertible Subordinated
Debt Securities shall become immediately due and payable upon notice in the
event of a bankruptcy or insolvency of Air Group. (Section 13.3 of the
Convertible Subordinated Debt Securities Indenture.) By reason of such
subordination, in the event of insolvency, creditors of Air Group who are
holders of Senior Indebtedness or of other unsubordinated Indebtedness of Air
Group may recover more, ratably, than the holders of the Convertible
Subordinated Debt Securities.
CONSOLIDATION, MERGER OR SALE BY THE ISSUER
The Indentures provide that Air Group may, without the consent of the
holders of Convertible Debt Securities, merge or consolidate with or into any
other corporation or sell, convey, transfer or otherwise dispose of all or
substantially all of its assets to any person, firm or corporation, if (i) (a)
in the case of a merger or consolidation, Air Group is the surviving corporation
or (b) in the case of a merger or consolidation where Air Group is not the
surviving corporation and in the case of such a sale, conveyance or other
disposition, the successor or acquiring corporation is a corporation organized
and existing under the laws of the United States of America or a State thereof
and such corporation expressly assumes by supplemental indenture all the
obligations of Air Group under the Convertible Debt Securities and any coupons
appertaining thereto and under the Indentures, and (ii) immediately after giving
effect to such merger or consolidation, or such sale, conveyance, transfer or
other disposition, no Default (as hereinafter defined) or Event of Default shall
have occurred and be continuing. In the event a successor corporation assumes
the obligations of Air Group, such successor corporation shall succeed to and be
substituted for Air Group under the Indentures and under the Convertible Debt
Securities and any coupons appertaining thereto and all obligations of Air Group
shall terminate. (Section 7.1 of the Indentures.)
EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT
The Indentures provide that, if an Event of Default specified therein
occurs with respect to the Convertible Debt Securities of any series issued
thereunder and is continuing, the Trustee for such series or the holders of 25%
in aggregate principal amount of all of the outstanding Convertible Debt
Securities of that series, by written notice to Air Group (and to the Trustee
for such series, if notice is given by such holders of Convertible Debt
Securities),
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<PAGE> 12
may declare the principal (or, if the Convertible Debt Securities of that series
are original issue discount Convertible Debt Securities or indexed Convertible
Debt Securities, such portion of the principal amount specified in the
Prospectus Supplement) of all the Convertible Debt Securities of that series to
be due and payable, subject in the case of Convertible Subordinated Debt
Securities to the 60 day prior notice requirement described above under
"Subordination of Convertible Subordinated Debt Securities," provided that
Convertible Debt Securities shall become immediately due and payable without
prior notice upon a bankruptcy or insolvency of Air Group. (Section 5.2 of the
Indentures.)
"Events of Default" with respect to Convertible Debt Securities of any
series issued thereunder are defined in the Indentures as being: default for 30
days in payment of any interest on any Convertible Debt Security of that series
or any coupon appertaining thereto or any additional amount payable with respect
to Convertible Debt Securities of such series as specified in the applicable
Prospectus Supplement when due; default for ten days in payment of principal,
premium, if any, or on redemption or otherwise, or in the making of a mandatory
sinking fund payment of any Convertible Debt Securities of that series when due;
default for 60 days after notice to Air Group by the Trustee for such series, or
by the holders of 25% in aggregate principal amount of the Convertible Debt
Securities of such series then outstanding, in the performance of any other
agreement in the Convertible Debt Securities of that series, in the Indentures
or in any supplemental indenture or board resolution referred to therein under
which the Convertible Debt Securities of that series may have been issued;
default resulting in acceleration of other indebtedness of Air Group for
borrowed money where the aggregate principal amount so accelerated exceeds $25
million and such acceleration is not rescinded or annulled within ten days after
the written notice thereof to Air Group by the Trustee or to Air Group and the
Trustee by the holders of 25% in aggregate principal amount of the Convertible
Debt Securities of such series then outstanding, provided that such Event of
Default will be cured or waived if the default that resulted in the acceleration
of such other indebtedness is cured or waived; and certain events of bankruptcy,
insolvency or reorganization of Air Group. (Section 5.1 of the Indentures.)
Events of Default with respect to a specified series of Convertible Debt
Securities may be added to the Indenture under which the series is issued and,
if so added, will be described in the applicable Prospectus Supplement.
(Sections 3.1 and 5.1(7) of the Indentures.)
The Indentures provide that the Trustee for any series of Convertible
Debt Securities shall, within 90 days after the occurrence of a Default with
respect to Convertible Debt Securities of that series, give to the holder of the
Convertible Debt Securities of that series notice of all uncured Defaults known
to it, provided that, except in the case of default in payment on the
Convertible Debt Securities of that series, the Trustee may withhold the notice
if and so long as a committee of its Responsible Officers (as described therein)
in good faith determines that withholding such notice is in the interest of the
holders of the Convertible Debt Securities of that series. (Section 6.6 of the
Indentures.) "Default" means any event which is, or, after notice or passage of
time or both, would be, an Event of Default. (Section 1.1 of the Indentures.)
The Indentures provide that the holders of a majority in aggregate
principal amount of the Convertible Debt Securities of each series affected
(with each such series voting as a class) may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee for such
series, or exercising any trust or power conferred on such Trustee. (Section 5.8
of the Indentures.)
The Indenture includes a covenant that Air Group will file annually
with the Trustee a certificate as to Air Group's compliance with all conditions
and covenants of the applicable Indenture. (Section 9.7 of the Indentures.)
The holders of a majority in aggregate principal amount of any series
of Convertible Debt Securities by notice to the Trustee for such series may
waive, on behalf of the holders of all Convertible Debt Securities of such
series, any past Default or Event of Default with respect to that series and its
consequences except a Default or
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Event of Default in the payment of the principal of, premium, if any, or
interest, if any, on any Convertible Debt Security and certain other defaults.
(Section 5.7 of the Indentures.)
MODIFICATION OF THE INDENTURES
The Indenture contains provisions permitting Air Group and the Trustee
to enter into one or more supplemental indentures without the consent of the
holders of any of the Convertible Debt Securities in order (i) to evidence the
succession of another corporation to Air Group and the assumption of the
covenants of Air Group by a successor to Air Group; (ii) to add to the covenants
of Air Group or surrender any right or power of Air Group; (iii) to add
additional Events of Default with respect to any series; (iv) to add or change
any provisions to such extent as necessary to permit or facilitate the issuance
of Convertible Debt Securities in bearer form; (v) to add to, change or
eliminate any provision affecting Convertible Debt Securities not yet issued;
(vi) to secure the Convertible Debt Securities; (vii) to establish the form or
terms of Convertible Debt Securities; (viii) to evidence and provide for
successor Trustees; (ix) if allowed without penalty under applicable laws and
regulations, to permit payment in respect of Convertible Debt Securities in
bearer form in the United States; (x) to correct or supplement any inconsistent
provisions or to make any other provisions with respect to matters or questions
arising under the Indentures, provided that such action does not adversely
affect the interests of any holder of Convertible Debt Securities of any series
issued under such Indentures; or (xi) to cure any ambiguity or correct any
mistake. (Section 8.1 of the Indentures.)
The Indenture also contains provisions permitting Air Group and the
Trustee, with the consent of the holders of a majority in aggregate principal
amount of the outstanding Convertible Debt Securities of each series affected by
such supplemental indenture, to execute supplemental indentures adding any
provisions to or changing or eliminating any of the provisions of the Indenture
or any supplemental indenture or modifying the rights of the holders of
Convertible Debt Securities of such series, except that no such supplemental
Indenture may, without the consent of the holder of each Convertible Debt
Security so affected; (i) change the time for payment of principal or interest
on any Convertible Debt Security; (ii) reduce the principal of, or any
installment of principal of, or interest on any Convertible Debt Security; (iii)
reduce the amount of premium, if any, payable upon the redemption of any
Convertible Debt Security; (iv) reduce the amount of principal payable upon
acceleration of the maturity of an Original Issue Discount Convertible Debt
Security; (v) impair the right to institute suit for the enforcement of any
payment on or with respect to any Convertible Debt Security; (vi) reduce the
percentage in principal amount of the outstanding Convertible Debt Securities of
any series the consent of whose holders is required for modification or
amendment of the Indenture or for waiver of compliance with certain provisions
of the Indentures or for waiver of certain defaults; (vii) change the obligation
of Air Group to maintain an office or agency in the places and for the purposes
specified in the Indentures; or (viii) modify the provisions relating to waiver
of certain defaults or any of the foregoing provisions. (Section 8.2 of the
Indentures.)
COVENANT DEFEASANCE
If indicated in the Prospectus Supplement, Air Group may elect to be
released from its obligations with respect to certain covenants applicable to
the Convertible Debt Securities of or within any series ("covenant defeasance"),
upon the deposit with the Trustee for such series (or other qualifying trustee),
in trust for such purpose, of money and/or Government Obligations which through
the payment of principal and interest in accordance with their terms will
provide money in the amount sufficient to pay the principal of and any premium
or interest on such Convertible Debt Securities to Maturity or redemption, as
the case may be, and any mandatory sinking fund or analogous payment thereon.
Upon the occurrence of a covenant defeasance, Air Group will be released only
from its obligations to comply with certain covenants contained in the Indenture
relating to such Convertible Debt Securities, will continue to be obligated in
all other respects under such Convertible Debt
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<PAGE> 14
Securities and will continue to be contingently liable with respect to the
payment of principal, interest, if any, and premium, if any, with respect to
such Convertible Debt Securities.
Unless otherwise specified in the applicable Prospectus Supplement and
except as described below, the conditions to covenant defeasance are as follows:
(i) such covenant defeasance must not result in a breach or violation of, or
constitute a Default or Event of Default under, the Indentures, or result in a
breach or violation of, or constitute a default under, any other material
agreement or instrument of Air Group; (ii) certain bankruptcy related Defaults
or Events of Default with respect to Air Group must not have occurred and be
continuing during the period commencing on the date of the deposit of the trust
funds to covenant defease such Convertible Debt Securities and ending on the
91st day after such date; (iii) Air Group must deliver to the Trustee an Opinion
of Counsel to the effect that the holders of such Convertible Debt Securities
will not recognize income, gain or loss for federal income tax purposes as a
result of such covenant defeasance and will be subject to federal income tax on
the same amounts and in the same manner and at all the same times as would have
been the case if such covenant defeasance had not occurred; (iv) Air Group must
deliver to the Trustee an Officers' Certificate and an Opinion of Counsel with
respect to compliance with the conditions precedent to such covenant defeasance;
and (v) any additional conditions to such covenant defeasance which may be
imposed on Air Group pursuant to the Indentures. (Article 4 of the Indentures.)
The Indenture requires that a nationally recognized firm of independent public
accountants deliver to the Trustee a written certification as to the sufficiency
of the trust funds deposited for the covenant defeasance of such Convertible
Debt Securities. The Indenture does not provide the holders of such Convertible
Debt Securities with recourse against such firm. As described above, in the
event of a covenant defeasance, Air Group remains contingently liable with
respect to the payment of principal, interest, if any, and premium, if any, with
respect to the Convertible Debt Securities.
If Air Group exercises its covenant defeasance option, payment of such
Convertible Debt Securities may not be accelerated by reason of a Default or an
Event of Default with respect to the covenants to which such covenant defeasance
is applicable. However, if such acceleration were to occur, the realizable value
at the acceleration date of the money and Government Obligations in the
defeasance trust could be less than the principal and interest then due on such
Convertible Debt Securities, in that the required deposit in the defeasance
trust is based upon scheduled cash flow rather than market value, which will
vary depending upon interest rates and other factors.
DESCRIPTION OF CAPITAL STOCK
Air Group is authorized to issue 50,000,000 shares of Common Stock,
$1.00 par value ("Common Stock"), and 5,000,000 shares of preferred stock.
Voting Rights. Each holder of Common Stock is entitled to one vote per
share on all matters submitted to a vote of such class. Holders of Common Stock
do not have cumulative rights. The Board of Directors is classified into three
classes, with approximately one-third of the Directors elected each year to
three-year terms. A vote of a majority of the shares present at a meeting is
required to elect each nominee as a Director and to approve most other matters
brought before the stockholders for a vote, excluding certain extraordinary
transactions.
Dividend Rights. Holders of Common Stock share ratably in dividends
that may be declared by the Board of Directors out of funds legally available
therefor.
Liquidation Rights. Upon any liquidation of Air Group, the holders of
Common Stock are entitled to share ratably in the net assets of Air Group
available for distribution on the Common Stock.
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<PAGE> 15
Other. The Common Stock has no preemptive or conversion rights and
there are no redemption provisions applicable thereto. The Common Stock is
listed on the New York Stock Exchange. The registrar and transfer agent for the
Common Stock is The First National Bank of Boston.
Potential Rights of Preferred Stock. Under Air Group's Certificate of
Incorporation, the Board of Directors has authority to issue up to 5,000,000
shares of preferred stock. Such shares would have such voting, dividend,
liquidation, conversion, redemption and other rights as may be determined by the
Board of Directors, subject to the provisions of the Certificate of
Incorporation. Shares of Common Stock would be subject to the preferences,
rights and powers of any such shares of preferred stock as set forth in Air
Group's Certificate of Incorporation and in the resolutions establishing one or
more series of preferred stock. No preferred stock was outstanding at the date
of this Prospectus.
Certain Other Provisions. Air Group's Certificate of Incorporation
contains certain provisions sometimes referred to as "anti-takeover" provisions.
In the event that Air Group at any time has a stockholder who is a beneficial
owner of more than 15% of the voting power of Air Group, these provisions would
require the affirmative vote of the holders of not less than 80% of the
outstanding shares of voting stock to approve a consolidation or merger of Air
Group with any other corporation, the conveyance to any corporation or other
person or any other disposition of all or substantially all of Air Group's
assets, or the disposition by Air Group of all or substantially all of the stock
or assets of any major subsidiary; provided, however, that this 80% voting
requirement does not apply to a transaction which is approved by 80% of the
disinterested members of the Board of Directors.
Air Group is party to a Rights Agreement designed to deter partial and
two-tier tender offers, stock accumulation programs and other coercive tactics
that might be used to gain control without giving the Board of Directors the
opportunity to negotiate on behalf of the stockholders. In accordance with the
Rights Agreement, one right is attached to each share of outstanding Common
Stock. A holder of a right may, under certain circumstances, purchase at a
discount from market value either shares of a special class of voting preferred
stock of Air Group or shares of capital stock of a corporate entity attempting
to acquire Air Group or surviving a merger or consolidation with Air Group.
PLAN OF DISTRIBUTION
Air Group may sell Convertible Debt Securities to one or more
underwriters for public offering and sale by them or may sell Convertible Debt
Securities to investors or other persons directly or through agents. Any such
underwriter or agent involved in the offer and sale of the Convertible Debt
Securities will be named in an applicable Prospectus Supplement.
Underwriters may offer and sell the Convertible Debt Securities at a
fixed price or prices, which may be changed, or at prices related to prevailing
market prices or at negotiated prices. Air Group also may, from time to time,
authorize underwriters acting as Air Group's agents to offer and sell the
Convertible Debt Securities upon the terms and conditions as shall be set forth
in any Prospectus Supplement. In connection with the sale of Convertible Debt
Securities, underwriters may be deemed to have received compensation from Air
Group in the form of underwriting discounts or commission and may also receive
commissions from purchasers of Convertible Debt Securities for whom they may act
as agent. Underwriters may sell Convertible Debt Securities to or through
dealers, and such dealers may receive compensation in the form of discounts,
concessions or commissions from the underwriters and/or commissions (which may
be changed from time to time) from the purchasers for whom they may act as
agent.
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<PAGE> 16
Any underwriting compensation paid by Air Group to underwriters or
agents in connection with the offering of Convertible Debt Securities, and any
discounts, concessions or commissions allowed by underwriters to participating
dealers, will be set forth in an applicable Prospectus Supplement. Underwriters,
dealers and agents participating in the distribution of the Convertible Debt
Securities may be deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of the Convertible
Debt Securities may be deemed to be underwriting discounts and commissions under
the Securities Act. Underwriters, dealers and agents may be entitled, under
agreements with Air Group, to indemnification against and contribution toward
certain civil liabilities, including liabilities under the Securities Act, and
to reimbursement by Air Group for certain expenses.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, Air Group and its subsidiaries in the ordinary course of
business.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Convertible Debt Securities offered hereby will be passed upon
for Air Group by Perkins Coie, Seattle, Washington.
EXPERTS
The financial statements and schedule of Air Group incorporated by
reference in this Prospectus and in the Registration Statement have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
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<PAGE> 17
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE> 18
SUBJECT TO COMPLETION, DATED AUGUST 6, 1996
PROSPECTUS
ALASKA AIR GROUP, INC.
------------
COMMON STOCK
------------
Alaska Air Group, Inc. ("Air Group") may from time to time offer shares
of its Common Stock, par value $1.00 per share ("Common Stock"). The Common
Stock offered pursuant to this Prospectus will be limited to $182,250,000
aggregate public offering price. Certain specific terms of the offering of the
Common Stock in respect of which this Prospectus is being delivered are set
forth in the accompanying Prospectus Supplement (the "Prospectus Supplement"),
including any initial offering price.
------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------
Air Group may sell the Common Stock to or through underwriters, through
dealers or agents or directly to purchasers. See "Plan of Distribution." The
accompanying Prospectus Supplement sets forth the names of any underwriters,
dealers or agents involved in the sale of the Common Stock in respect of which
this Prospectus is being delivered, and any applicable fee, commission or
discount arrangements with them.
This Prospectus may not be used to consummate sales of Common Stock
unless accompanied by a Prospectus Supplement applicable to the Common Stock
being sold.
------------
THE DATE OF THIS PROSPECTUS IS __________, 1996.
<PAGE> 19
No dealer, salesperson or other individual has been authorized to give
any information or to make any representations not contained in this Prospectus
in connection with the offering covered by this Prospectus. If given or made,
such information or representations must not be relied upon as having been
authorized by Air Group or the Underwriter. This Prospectus does not constitute
an offer to sell, or a solicitation of an offer to buy, the Common Stock in any
jurisdiction where, or to any person to whom, it is unlawful to make such offer
or solicitation. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there has
not been any change in the facts set forth in this Prospectus or in the affairs
of Air Group since the date hereof.
AVAILABLE INFORMATION
Air Group is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and, in accordance therewith,
files reports and other information with the Securities and Exchange Commission
(the "Commission"). Such reports and other information may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549; 75 World Trade Center,
Suite 1300, New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material may also be
obtained at prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition, such
material filed by Air Group may be inspected and copied at the offices of the
New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.
This Prospectus constitutes a part of a registration statement on Form
S-3 (Registration No. 333-4835) (together with all amendments and exhibits, the
"Registration Statement") filed by Air Group with the Commission under the
Securities Act of 1933, as amended (the "Securities Act"). This Prospectus does
not contain all of the information included in the Registration Statement,
certain parts of which are omitted in accordance with the rules and regulations
of the Commission. Statements contained herein concerning the provisions of any
document do not purport to be complete and, in each instance, reference is made
to the copy of such document filed as an exhibit to the Registration Statement
or otherwise filed with the Commission. Each such statement is subject to and
qualified in its entirety by such reference. Reference is made to such
Registration Statement and to the exhibits relating thereto for further
information with respect to Air Group and the Common Stock offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission pursuant to
the 1934 Act and are incorporated into this Prospectus by reference and made a
part hereof: Air Group's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, Air Group's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1996, Air Group's Quarterly Report on Form 10-Q for
the fiscal quarter ended June 30, 1996, the description of Air Group's Common
Stock contained in Air Group's Registration Statement on form 8-A filed with the
Commission on September 19, 1985, including any amendments or reports filed for
the purposes of updating such description, and the description of the rights to
purchase Series A Participating Preferred Stock in Air Group's Registration
Statement on Form 8-A filed with the Commission on December 11, 1986, including
any amendments or reports filed for purposes of updating such description.
All documents filed by Air Group pursuant to Section 13(a), 13(c), 14
or 15(d) of the 1934 Act subsequent to the date of this Prospectus and prior to
the termination of this offering shall be deemed to be incorporated by reference
in this Prospectus, and to be a part hereof from the date of filing of such
documents. Any statement incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus. Air Group will provide without charge to each person to whom a copy
of this Prospectus is delivered, upon the written or oral request of such
person, a copy of any document incorporated by reference in this Prospectus
(other than exhibits to such documents unless such exhibits are specifically
incorporated by reference to such documents).
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<PAGE> 20
Requests for such copies should be directed to the office of the Corporate
Secretary, Alaska Air Group, Inc., P.O. Box 68947, Seattle, Washington 98168
(telephone (206) 433-3131).
AIR GROUP AND ALASKA
Air Group is a holding company incorporated in Delaware in 1985. Its
principal subsidiaries are Alaska Airlines, Inc. ("Alaska") and Horizon Air
Industries, Inc. ("Horizon"). Alaska, founded in 1932, provides scheduled air
transportation to 37 cities in Alaska, Washington, Oregon, Nevada, California
and Arizona, three cities in Mexico, four cities in Russia, one city in Canada
and many smaller communities in Alaska and California through code-sharing
agreements with local carriers. As of December 31, 1995, Alaska operated 24
owned and 50 leased jet aircraft with an average age of 6.6 years. During 1995,
Alaska entered into a marketing agreement with Northwest Airlines whereby
certain Alaska flights and certain Northwest flights are dual-designated in
airline computer reservation systems as Alaska Airlines and Northwest Airlines.
Horizon, a regional commuter carrier founded in 1981, provides scheduled air
transportation to 36 cities in Washington, Oregon, Montana, Idaho, California
and Wyoming, as well as four cities in Canada. Horizon provides interconnecting
passenger traffic to Alaska through its major hub cities, Seattle, Portland and
Spokane. As of December 31, 1995, Horizon operated five owned and 62 leased
aircraft with an average age of 9.8 years. The principal executive offices of
Air Group are located at 19300 Pacific Highway South, Seattle, Washington 98188
(telephone (206) 433-3200).
For the year ended December 31, 1995, Air Group's consolidated
operating revenues were $1.4 billion, of which 89% came from scheduled passenger
services, 7% came from freight and mail, and 4% came from mileage plan partners
and other nonpassenger sources. Alaska carried approximately 10.1 million
passengers in 1995 and accounted for approximately 80% of Air Group's
consolidated 1995 operating revenues. Horizon carried approximately 3.8 million
passengers in 1995 and accounted for the remaining 20% of Air Group's
consolidated 1995 operating revenues.
In each year since 1973, Alaska has carried more passengers between
Alaska and the U.S. mainland than any other airline. Passenger traffic within
Alaska and between Alaska and the U.S. mainland accounted for 27% of Alaska's
total revenue passenger miles in 1995, while West Coast traffic accounted for
66% and the Mexico markets 7%. Based on passenger enplanements, Alaska's leading
airports are Seattle, Portland, Anchorage and Los Angeles. Based on revenues,
its leading nonstop routes were Seattle-Anchorage, Seattle-Los Angeles and
Seattle-San Francisco.
USE OF PROCEEDS
Unless otherwise indicated in the accompanying Prospectus Supplement,
the net proceeds to Air Group from the sale of the Common Stock offered hereby
will be added to the working capital of Air Group and will be available for
general corporate purposes, among which may be the repayment of outstanding
indebtedness and financing of capital expenditures by Alaska and Horizon,
including the acquisition of aircraft and related equipment.
DESCRIPTION OF COMMON STOCK
Air Group is authorized to issue 50,000,000 shares of Common Stock,
$1.00 par value and 5,000,000 shares of preferred stock.
Voting Rights. Each holder of Common Stock is entitled to one vote per
share on all matters submitted to a vote of such class. Holders of Common Stock
do not have cumulative rights. The Board of Directors is classified into three
classes, with approximately one-third of the Directors elected each year to
three-year terms. A vote of a
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<PAGE> 21
majority of the shares present at a meeting is required to elect each nominee as
a Director and to approve most other matters brought before the stockholders for
a vote, excluding certain extraordinary transactions.
Dividend Rights. Holders of Common Stock share ratably in dividends
that may be declared by the Board of Directors out of funds legally available
therefor.
Liquidation Rights. Upon any liquidation of Air Group, the holders of
Common Stock are entitled to share ratably in the net assets of Air Group
available for distribution on the Common Stock.
Other. The Common Stock has no preemptive or conversion rights and
there are no redemption provisions applicable thereto. The Common Stock is
listed on the New York Stock Exchange. The registrar and transfer agent for the
Common Stock is The First National Bank of Boston.
Potential Rights of Preferred Stock. Under Air Group's Certificate of
Incorporation, the Board of Directors has authority to issue up to 5,000,000
shares of preferred stock. Such shares would have such voting, dividend,
liquidation, conversion, redemption and other rights as may be determined by the
Board of Directors, subject to the provisions of the Certificate of
Incorporation. Shares of Common Stock would be subject to the preferences,
rights and powers of any such shares of preferred stock as set forth in Air
Group's Certificate of Incorporation and in the resolutions establishing one or
more series of preferred stock. No preferred stock was outstanding at the date
of this Prospectus.
Certain Other Provisions. Air Group's Certificate of Incorporation
contains certain provisions sometimes referred to as "anti-takeover" provisions.
In the event that Air Group at any time has a stockholder who is a beneficial
owner of more than 15% of the voting power of Air Group, these provisions would
require the affirmative vote of the holders of not less than 80% of the
outstanding shares of voting stock to approve a consolidation or merger of Air
Group with any other corporation, the conveyance to any corporation or other
person or any other disposition of all or substantially all of Air Group's
assets, or the disposition by Air Group of all or substantially all of the stock
or assets of any major subsidiary; provided, however, that this 80% voting
requirement does not apply to a transaction which is approved by 80% of the
disinterested members of the Board of Directors.
Air Group is party to a Rights Agreement designed to deter partial and
two-tier tender offers, stock accumulation programs and other coercive tactics
that might be used to gain control without giving the Board of Directors the
opportunity to negotiate on behalf of the stockholders. In accordance with the
Rights Agreement, one right is attached to each share of outstanding Common
Stock. A holder of a right may, under certain circumstances, purchase at a
discount from market value either shares of a special class of voting preferred
stock of Air Group or shares of capital stock of a corporate entity attempting
to acquire Air Group or surviving a merger or consolidation with Air Group.
PLAN OF DISTRIBUTION
Air Group may sell the Common Stock to one or more underwriters for
public offering and sale by them or may sell the Common Stock to investors or
other persons directly or through agents. Any such underwriter or agent involved
in the offer and sale of the Common Stock will be named in an applicable
Prospectus Supplement.
Underwriters may offer and sell the Common Stock at a fixed price or
prices, which may be changed, or at prices related to prevailing market prices
or at negotiated prices. Air Group also may, from time to time, authorize
underwriters acting as Air Group's agents to offer and sell the Common Stock
upon the terms and conditions as shall be set forth in any Prospectus
Supplement. In connection with the sale of Common Stock, underwriters may
4
<PAGE> 22
be deemed to have received compensation from Air Group in the form of
underwriting discounts or commission and may also receive commissions from
purchasers of the Common Stock for whom they may act as agent. Underwriters may
sell the Common Stock to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions (which may be changed from time to time) from
the purchasers for whom they may act as agent.
Any underwriting compensation paid by Air Group to underwriters or
agents in connection with the offering of the Common Stock, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Common Stock may be deemed
to be underwriters, and any discounts and commissions received by them and any
profit realized by them on resale of the Common Stock may be deemed to be
underwriting discounts and commissions under the Securities Act. Underwriters,
dealers and agents may be entitled, under agreements with Air Group, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act, and to reimbursement by Air
Group for certain expenses.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, Air Group and its subsidiaries in the ordinary course of
business.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Common Stock offered hereby will be passed upon for Air Group by
Perkins Coie, Seattle, Washington.
EXPERTS
The financial statements and schedule of Air Group incorporated by
reference in this Prospectus and in the Registration Statement have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are incorporated herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
5
<PAGE> 23
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and distribution
of the securities being registered, other than underwriting discounts and
commissions, are set forth in the following table.
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee............................... $ 62,845
Blue Sky fees and expenses........................................................ *
Printing and engraving expenses................................................... *
Legal fees and expenses........................................................... *
Rating agency fees................................................................ *
Accounting fees and expenses...................................................... *
Owner Trustee fees and expenses................................................... *
Indenture Trustee fees and expenses............................................... *
Miscellaneous..................................................................... *
----------
Total........................................................................ $ *
==========
</TABLE>
- -----------
* Information to be added by amendment.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of Delaware provides that
a corporation may indemnify directors and officers as well as other employees
and individuals against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the person in
connection with specified actions or proceedings, whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
corporation--a "derivative action"), if they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe their conduct was unlawful. A similar standard is
applicable in the case of derivative actions, except that indemnification only
extends to expenses (including attorneys' fees) actually and reasonably incurred
by the person in connection with the defense or settlement of such action, and
the statute requires court approval before there can be any indemnification
where the person seeking indemnification has been found liable for negligence or
misconduct in the performance of the person's duty to the corporation. The
statute provides that it is not exclusive of other indemnification that may be
granted by a corporation's bylaws, agreement, vote of shareholders or
disinterested directors or otherwise.
Article VIII of registrant's By-Laws requires indemnification to the
full extent permitted by the Delaware Corporation Law. Subject to any
restrictions imposed by Delaware law, the Bylaws of registrant provide a right
to indemnification for all expenses (including attorneys' fees), judgments,
fines and amounts paid in settlement actually and reasonably incurred by any
person in connection with any actual or threatened action, suit or proceeding
by reason of the fact that such person is or was a director or officer of
registrant or is or was serving at the request of registrant as a director or
officer of another corporation. The Bylaws of registrant also provide that
registrant may, by action of its Board of Directors, approve indemnification
II-1
<PAGE> 24
of any other person whom it has the power to indemnify under the Delaware
Corporation Law.
Officers and directors of registrant are covered by insurance (with
certain exceptions and within certain limitations) which indemnifies them
against losses and liabilities arising from certain alleged "wrongful acts,"
including alleged errors or misstatements, or certain other alleged wrongful
acts or omissions constituting neglect or breach of duty.
The Underwriting Agreements, filed as Exhibits 1(a) and 1(b) hereto,
contain provisions whereby the Underwriters agree to indemnify the registrant,
its directors and certain officers and certain other persons, and are
incorporated herein by reference.
ITEM 16. EXHIBITS
(a) The following Exhibits are filed as part of this Registration
Statement:
<TABLE>
<S> <C>
Exhibit 1(a) Form of Underwriting Agreement for Convertible Debt Securities of Air Group*
Exhibit 1(b) Form of Underwriting Agreement for Common Stock of Air Group*
Exhibit 4(a)(1) Form of Convertible Senior Debt Securities Indenture for Air Group (incorporated by reference
from Exhibit 4(a)(1) to Amendment No. 1 to Air Group's and Alaska's Registration Statement
No. 33-52265 on Form S-3 filed on March 11, 1994)
Exhibit 4(a)(2) Form of Convertible Senior Debt Securities of Air Group (included in Exhibit 4(a)(1))
Exhibit 4(a)(3) Form of Convertible Subordinated Debt Securities Indenture for Air Group (incorporated by
reference from Exhibit 4(a)(3) to Amendment No. 1 to Air Group's and Alaska's Registration
Statement No. 33-52265 on Form S-3 filed on March 11, 1994)
Exhibit 4(a)(4) Form of Convertible Subordinated Debt Securities of Air Group (included in Exhibit 4(a)(3))
</TABLE>
II-2
<PAGE> 25
<TABLE>
<S> <C>
Exhibit 4(b) Certificate of Incorporation of Alaska Air Group, Inc., as amended to date (incorporated by
reference from Exhibit 4(d) to Air Group's and Alaska's Registration Statement No. 33-52265
on Form S-3 filed of February 14, 1994)
Exhibit 4(c) Bylaws of Alaska Air Group, Inc., as amended to date (incorporated by reference to Exhibit 3.(ii)
to Form 10-K of Alaska Air Group, Inc. for the year ended December 31, 1995)
Exhibit 4(d) Rights Agreement dated as of December 2, 1986 between Alaska Air Group, Inc. and The First
National Bank of Boston, as Rights Agent (incorporated by reference to Exhibit No. 1
to Form 8-A of Alaska Air Group, Inc. filed December 12, 1986)
Exhibit 5(a) Opinion of Perkins Coie, counsel for Alaska Air Group,
Inc. **
Exhibit 12(a) Computation of Ratio of Earnings to Fixed Charges of Air Group
Exhibit 23(a) Consent of Perkins Coie (included in Exhibit
5(a)) **
Exhibit 23(b) Consent of Arthur Andersen LLP
Exhibit 24 Power of Attorney**
Exhibit 25(a) Form T-1 Statement of Eligibility of Trustee under Convertible Debt Securities Indenture of Air
Group*
</TABLE>
- -----------
* To be filed by amendment.
** Previously filed.
ITEM 17. UNDERTAKINGS
A. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(a) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended (the "1933 Act");
II-3
<PAGE> 26
(b) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(c) To include any material information with respect
to the plan of distribution not previously disclosed in the registration
statement or any material change to such information in the registration
statement;
PROVIDED, HOWEVER, that paragraphs A(1)(a) and A(1)(b) do not apply if the
information required to be included in such post-effective amendment is
contained in a periodic report filed by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), and incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under
the 1933 Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned hereby undertakes that, for purposes of determining
any liability under the 1933 Act, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the 1934 Act (and, where
applicable, each filing of an employee benefits plan's annual report pursuant to
Section 15(d) of the 1934 Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the 1933
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions described under Item 15 above,
or otherwise, the registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the 1933 Act and is, therefore, unenforceable. In the event that
a claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the 1933 Act
and will be governed by the final adjudication of such issue.
D. The undersigned registrant hereby undertakes to file an application
for the purpose of determining the eligibility of the trustee to act under
subsection (a) of Section 310 of the Trust Indenture Act in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Trust Indenture Act.
II-4
<PAGE> 27
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Alaska Air Group, Inc. certifies that it has reasonable grounds to believe that
it meets all the requirements for filing on Form S-3 and has duly caused this
Amendment No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Seattle, Washington, this 6th day
of August, 1996.
ALASKA AIR GROUP, INC.
By: Harry G. Lehr
HARRY G. LEHR
------------------------------
Senior Vice President/Finance
Pursuant to the requirements of the Securities Act, this Amendment No.
1 to Registration Statement has been signed by the following persons in the
capacities indicated below on this 6th day of August, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<S> <C>
*JOHN F. KELLY Chairman of the Board,
--------------------------- Chief Executive Officer,
John F. Kelly President and Director
HARRY G. LEHR Senior Vice President/Finance
---------------------------
Harry G. Lehr
*BRADLEY D. TILDEN Controller
---------------------------
Bradley D. Tilden
*WILLIAM H. CLAPP Director
---------------------------
William H. Clapp
*RONALD F. COSGRAVE Director
---------------------------
Ronald F. Cosgrave
</TABLE>
II-5
<PAGE> 28
<TABLE>
<S> <C>
*MARY JANE FATE Director
---------------------------
Mary Jane Fate
*BRUCE R. KENNEDY Director
---------------------------
Bruce R. Kennedy
*R. MARC LANGLAND Director
---------------------------
R. Marc Langland
*BYRON I. MALLOTT Director
---------------------------
Byron I. Mallott
*ROBERT L. PARKER, JR. Director
---------------------------
Robert L. Parker, Jr.
*RICHARD A. WIEN Director
---------------------------
Richard A. Wien
* By HARRY G. LEHR
---------------------------
Harry G. Lehr
Attorney-in-Fact
</TABLE>
II-6
<PAGE> 29
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ---------- -------
<S> <C>
Exhibit 1(a) Form of Underwriting Agreement for Convertible Debt Securities of Air Group*
Exhibit 1(b) Form of Underwriting Agreement for Common Stock of Air Group*
Exhibit 1(d) Form of Underwriting Agreement for Equipment Trust Certificates of Alaska*
Exhibit 4(a)(1) Form of Convertible Senior Debt Securities Indenture for Air Group
(incorporated by reference from Exhibit 4(a)(1) to Amendment No. 1 to
Air Group's and Alaska's Registration Statement No. 33-52265 on Form S-3
filed on March 11, 1994)
Exhibit 4(a)(2) Form of Convertible Senior Debt Securities of Air Group (included in Exhibit
4(a)(1))
Exhibit 4(a)(3) Form of Convertible Subordinated Debt Securities Indenture for Air Group
(incorporated by reference from Exhibit 4(a)(3) to Amendment No. 1 to
Air Group's and Alaska's Registration Statement No. 33-52265 on Form S-3
filed on March 11, 1994)
Exhibit 4(a)(4) Form of Convertible Subordinated Debt Securities of Air Group (included in
Exhibit 4(a)(3))
</TABLE>
<PAGE> 30
<TABLE>
<S> <C>
(included in Exhibit 4(c)(3))
Exhibit 4(b) Certificate of Incorporation of Alaska Air Group, Inc., as amended to date (incorporated by reference from
Exhibit 4(d) to Air Group's and Alaska's Registration Statement No. 33-52265 on Form S-3 filed on
February 14, 1994)
Exhibit 4(c) Bylaws of Alaska Air Group, Inc., as amended to date (incorporated by reference to Exhibit 3.(ii) to Form
10-K of Alaska Air Group, Inc. for the year ended December 31, 1995)
Exhibit 4(d) Rights Agreement dated as of December 2, 1986 between Alaska Air Group, Inc. and The First National Bank
of Boston, as Rights Agent (Exhibit No. 1 to Form 8-A of Alaska Air Group, Inc. filed December 12,
1986)
Exhibit 5(a) Opinion of Perkins Coie, counsel for Alaska Air Group, Inc. **
Exhibit 12(a) Computation of Ratio of Earnings to Fixed Charges of Air Group
Exhibit 23(a) Consent of Perkins Coie (included in Exhibit 5(a))**
Exhibit 23(b) Consent of Arthur Andersen LLP
Exhibit 24 Power of Attorney**
Exhibit 25(a) Form T-1 Statement of Eligibility of Trustee under Convertible Debt Securities Indenture of Air Group*
</TABLE>
- -----------
* To be filed by amendment.
** Previously filed.
-2-
<PAGE> 1
EXHIBIT 12(a)
ALASKA AIR GROUP, INC.
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1996 1995
------- -------
<S> <C> <C>
Earnings:
Income before income tax expense $19,422 ($17,014)
Less: Capitalized interest 0 0
Add:
Interest on indebtedness 20,875 26,398
Amortization of debt expense 576 571
Portion of rent under long-term
operating leases representative
of an interest factor 39,997 37,898
------- -------
Total Earnings Available for
Fixed Charges $80,870 $47,853
======= =======
Fixed Charges:
Interest 20,875 26,398
Amortization of debt expense 576 571
Portion of rent under long-term
operating leases representative
of an interest factor 39,997 37,898
------- -------
Total Fixed Charges $61,448 $64,867
======= =======
Ratio of Earnings to Fixed Charges 1.32 0.74
======= =======
Deficiency $0 $17,014
======= =======
</TABLE>
<PAGE> 1
Exhibit 23(b)
[ARTHUR ANDERSEN LLP LETTERHEAD]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated January 25, 1996
included in Alaska Air Group's Form 10-K for the year ended December 31, 1995
and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
Seattle, Washington
August 5, 1996
