Alaska Air (ALK) 8-K Merrill Lynch Global Transportation Conference

This presentation may include forward-looking statements regarding the performance of Alaska Air Group or its
subsidiaries.Actual results may differ materially from these projections.Please see our most recent Annual
Report on Form 10-K for additional information concerning factors that could cause results to differ.

June 18,2008

Merrill Lynch Global Transportation Conference

Alaska Air Group Update

•How is Alaska Air Group doing in the current
industry crisis?

•Why is Alaska better positioned to weather the
current storm?

•What are we doing to position ourselves for the
long term?

(in millions)

Industry(in billions)

Estimated industry losses will rival or exceed 9/11

*First Call mean estimate as of 6/11/08. Does not necessarily reflect the company’s internal forecast.

Merrill Lynch estimate 6/10/08

Q1 adjusted net result

(in millions)

Q1 fuel cost*

(in millions)

* Net of hedging

Rapidly rising fuel is the cause

Source: Bloomberg

Oil as we knew it

Source: Bloomberg

Our world has changed

$100/barrel
increase
or
$1 billion
annual
raw fuel cost
(crude portion)

$1 per barrel
= $10 million of
pretax income

Source: Bloomberg, as of 6/12/08

West Coast refinery margin also increased

75¢/gallon
increase
or
$300 million
annual cost
(unhedged)

1¢/gallon
= $4 million to pretax
net income

Fuel % of revenue

Assumes $135/bbl thru 12/08 with 81¢/gal crack (avg $123.05/bbl unhedged for FY 2008)

Also assumes 2008 revenues same as 2007 for comparison purposes only. Not to be taken

as guidance.

Cberry 6-16-08

Fuel is taking a bigger bite out of
revenue than ever before

ThenNow

(2003)(2008)

*Applies MD-80 fuel burn for MD-80 at maximum stage length to

Seattle-Newark trip

Assumes 80% load factors and no fuel hedge benefit STackett 6-16-08

MD-80*42196

MD-801988

Fuel cost per passenger is about
4.5 times the cost in 2003

MimiHoover AHarrison 6-16-08

Actively managing capacity

•Reduced capacity 4.8% for Alaska mainline, 10.6% for
purchased capacity flying, and 12.5% for Horizon

•Redeployed 5% of Alaska’s and 6% of Horizon’s
capacity

•Accelerated MD-80 retirement to August 25

•Flying slower - -- adding just 2 minutes to Alaska’s
flights could save almost $6 million annually in fuel

Reduce growth
and redeploy capacity

forecast

forecast

(year-over-year % available seat mile (ASM) growth)

was - -4.0%

is now -8.9%

was 3.0%

is now 1.2%

Cost per available seat
mile

excluding fuel

8.73¢

8.52¢

8.33¢

7.92¢

7.0¢

7.5¢

8.0¢

8.5¢

9.0¢

2001

2002

2003

2004

2005

2006

7.81¢

2007

Continuous

improvement

2008

target

7.50¢

Continued control of non-fuel unit costs

Cash as a % of Revenues
Q1 ‘08

Note: Calculated using unrestricted cash and short-term investments at March 30, 2008 divided by revenue for the 12 months ended March 30, 2008.

Alaska Air Group had $990 million in cash as of the date of this filing.

Sources of additional
liquidity

•$185 million line of credit

•$172 million maximum pre-
delivery payment facility

•10 unencumbered aircraft,
including B737-800s and Q400s

•Unencumbered real estate

•Spare parts

•Forward sale of miles

Source:Company earnings releases and 10Qs as of Q1 2008 Psundaresan/JSchaefer

Strong cash position and
multiple sources of liquidity

Alaska Air Group Adjusted Debt-to-Capitalization - Q1 2008

Source:Company Earnings Releases; AAG Board Deck PSundaresan

Relatively low leverage

1 Totals are annualized or estimated from Jet or heating oil positions. Assumes a heating oil crack spread of
41¢/gal and a jet fuel crack spread of 60¢/gal.

2 Values shown are crude oil equivalents.

3 2008 column reflects fuel hedge data for Q2-Q4 2008.

2008

2009

Hedged$/BBL2

70%$51

50%$76

34%$90

50%$99

30%$75

31%$84

9%$92

40%$102

30%$104

25%$90

Hedged$/BBL2

55%$51

28%$104

--

20%$97

--

2%$95

--

10%$86

--

--

Southwest

Alaska

jetBlue1

AirTran1

American

US Airways1

Continental1

Delta1

Northwest

United1

Source: Public Data, Bloomberg

Air Group has the second best hedge
position in the industry

3

Source: 10K reports as of Dec. 31, 2007

December 2008

737-800

46

737-700

20

737-900

12

737-400

38

All-737 Fleet

116 aircraft

Average fleet age (years)

An all-737 fleet by September

•Alaska Domestic Mission Rules

•1,000 statute miles

•Nominal fuel burn

•Pax/Bag weight = 220 lb

•100% load factor

Better

Fuel gallons per passenger

Source: The Boeing Company

Alaska’s aircraft most
fuel-efficient in operation today

~50 aircraft

December 2009

Q400
~50

Q200

Q200

16

16

70 aircraft

CRJ 700

21

Q400
33

December 2007

Moving to Q400 single type fleet by 2010

For our customers:

•Fast

−415 mph cruise speed

−Pure jet block times @ 500 miles

•Quiet and comfortable

•Prop and ANVS technology

For our business plan:

•Cost-efficient

−Best economics of any regional
aircraft

•Flexible/High Performance

−Airfield access

−Low-visibility technology

For the environment:

•Fuel-efficient, quieter, greener

Source: Bombardier

The Q400:
The right aircraft at the right time

•400 statute miles

•100% load factor

Better

Fuel gallons per passenger

Source: Bombardier

Horizon’s aircraft are among the
most fuel-efficient

Guadalajara

Orlando

Loreto

Chicago

Palm Springs

San Diego

Las Vegas

Phoenix

Tucson

Cancun

Vancouver

Lihue

Lihue

Honolulu

Honolulu

Miami

Washington, D.C.

Boston

New York
(Newark)

Dallas/Ft Worth

Denver

Spokane

Reno

Sacramento

Boise

San Jose

Oakland

Nome

Barrow

Kotzebue

Bethel

Sitka

Fairbanks

Juneau

Petersburg

Wrangell

Yakutat

Glacier Bay/

Cordova

Gustavus

Ketchikan

Partners drive additional revenue
to AAG from international points;
big opportunity in Asia

Partners drive additional revenue
to AAG from international points;
big opportunity in Asia

Japan/Asia

Northwest

Cathay

Ontario

Burbank

Orange County

Long Beach

Los Angeles Int'l

Seattle

Portland

San Francisco Int'l

Caribbean/South America

American

Europe/Middle East/Africa

Northwest/KLM

Air France

British

South America

Lan

Australia/New Zealand

Qantas

2008

3rd

4th

10th

12th

17th

19th

5th

Greatly improved on-time performance

Alaska Air Group is well prepared
to weather the storm

•Conservative balance sheet with good liquidity

•Young, fuel-efficient, simple fleets

•Strong fuel hedge portfolio

•Good progress with cost reduction

•Strong network of code-share partners,
poised to benefit from Trans-Pac growth

•Management team committed to strong
financial position and performance

•Reputation for outstanding customer service and
industry-leading value