Alaska Air Group Prices Public Equity Offering

Alaska Air Group, Inc. today announced that it has priced its public offering of 5.7 million newly issued shares of its common stock. The net proceeds to Alaska Air Group from the offering will be...

Alaska Air Group, Inc. today announced that it has priced its public offering of 5.7 million newly issued shares of its common stock. The net proceeds to Alaska Air Group from the offering will be approximately $200 million, after deducting underwriting discounts, commissions and offering expenses.

Citigroup Global Markets Inc. is acting as the lead managing underwriter for the offering and has been granted a 30-day option to purchase up to an additional 427,500 shares of common stock solely to cover over-allotments, if any. Citigroup expects the issuance and delivery of the shares to occur on Dec. 16, 2005.

Alaska Air Group intends to use the net proceeds from this offering for general corporate purposes, including working capital, the acquisition of aircraft and other capital expenditures.

An automatic shelf registration statement relating to the common stock was filed with the Securities and Exchange Commission Monday and became effective upon such filing. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these shares of common stock in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Copies of the prospectus relating to the offering may be obtained from: Citigroup Corporate and Investment Banking, Brooklyn Army Terminal, 140 58th Street, 8th Floor, Brooklyn, N.Y. 11220.

Alaska Airlines and its sister carrier, Horizon Air, are subsidiaries of Alaska Air Group and together serve 88 cities through an expansive network throughout Alaska, the Lower 48, Canada and Mexico.

FORWARD-LOOKING INFORMATION

This press release contains forward-looking statements regarding the anticipated date of issuance and delivery of the shares described above and our intended use of the net proceeds from the sale of such shares that are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events and involve known and unknown risks and uncertainties that may cause actual outcomes to be materially different from that indicated by any forward-looking statements. Some of the things that could cause our actual results to differ from our expectations are: the failure of one or more of the closing conditions of the offering to occur; the competitive environment and other trends in our industry; changes in our operating costs including fuel, which can be volatile; our ability to meet our cost reduction goals; our inability to achieve or maintain profitability and fluctuations in our quarterly results; our significant indebtedness; our inability to secure new aircraft financing; the implementation of our growth strategy; possible accelerated retirement of our MD-80 fleet; compliance with our financial covenants; potential downgrades of our credit ratings and the availability of financing; the concentration of our revenue from a few key markets; general economic conditions, as well as economic conditions in the geographic regions we serve; actual or threatened terrorist attacks; global instability and potential U.S. military actions or activities; insurance costs; labor disputes; our ability to attract and retain qualified personnel; an aircraft accident or incident; liability and other claims asserted against us; operational disruptions; increases in government fees and taxes; changes in laws and regulations; our reliance on automated systems; and our reliance on third-party vendors and partners. For a discussion of these and other risk factors, see Item 7 of the Company’s Annual Report for the year ended December 31, 2004 on Form 10-K. All of the forward- looking statements are qualified in their entirety by reference to the risk factors discussed therein. These risk factors may not be exhaustive. We operate in a continually changing business environment, and new risk factors emerge from time to time. Management cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on our business or events described in any forward-looking statements. We disclaim any obligation to publicly update or revise any forward-looking statements after the date of this press release to conform them to actual results.

SOURCE: Alaska Airlines

CONTACT: Caroline Boren, +1-206-392-5799, or Amanda Tobin,
+1-206-392-5134, both of Alaska Air Group, Inc.