1. UCLA Transportation Symposium Lake Arrowhead, CA

2. State of Industry – 40% of the industry capacity is in or heading towards bankruptcy S&P rating is the Corporate credit rating as of July 31, 2004; Capacity based on Q2 ‘04 Share of IndustryIn S&P RatingCapacity Bankruptcy? Southwest AirlinesA8.6%No Alaska AirlinesBB-2.6%No JetBlue Airways Corp.BB-2.1%No Northwest Airlines Corp.B10.4%No Continental AirlinesB9.9%No AirTran Holdings Inc.B-1.3%No America West Holding Corp.B-3.5%No AMR Corp.B-20.2%No Delta Air Lines Inc.CCC15.2%Likely US Airways Group Inc.CCC6.2%Yes ATA Holdings Corp.CCC2.4%Likely UAL Corp.D16.6%Yes Frontier Airlines Inc.N/A1.0%No

3. Industry Recap Post 9/11 Airlines in Turmoil: AMR to Reduce Pilot Force by 20% UAL Will Lay Off 1,500 Workers As Part of Cost-Cutting 140,000 Employees have been furloughed 800 Aircraft have been parked

4. Source: Merrill Lynch - August 30, 2004. Data for major airlines only, excluding government compensation $ (billions) Industry Net Losses

5. Source: U.S. DOT DB1A database. LCC’s include: AirTran, Frontier, JetBlue and Southwest. Majors includes: Alaska, American, America West, Continental, Delta, Northwest, United and US Airways. * Merrill Lynch Research forecast Low Cost Carriers’ Share of Passengers

6. And how do we surviven when -

7. ? ?

8. It’s all about having an edge - A point of differentiation

9. Airport of the Future

10. Alaska Operations Initiatives Juneau, Alaska

11. Mixed Fleet Seats

12. Air Cargo Post 9/11

13. Clawing for Customers  Loss of walk-up customers.  Changes in security measures.  Irresponsible pricing.  Shift to Ground Transportation.  C0ntrol Cost.

14. 737-200 Combi Replacement

15. 737-400 Combi Configuration Cargo Door 70 Passenger Seats Fixed Bulkheads 4 Cargo Igloos Moveable Ballast Storage 30% more cargo capacity 15-20% more passengers

16. Maintaining your competitive edge. 1999 2000 2001 2003 2004