1. 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. January 8, 2009 C F O ROUNDTABLE Surviving Tough Times

2. Timelines Major “Shocks” We’ve Experienced as an Airline and an Industry 2000 Flight 261 2001 9/11 Attacks 2003 - 2005 2010 Restructuring Plan 2007 - 2008 Oil price Run up 2008 - ??? Global Recession

3. Source: Kiodex as of 1/2/09 Identify controllable vs uncontrollable items and focus energy on what you can control Crude oil $ per barrel Example

4. Fuel hedges have helped control costs $123 million net economic hedge benefit in 2008 (millions)

5. Challenge Your Paradigms High capital investment in aircraft Old, legacy thinking Fuel price increases Plummeting Demand Aircraft are moveable assets Nimble and learn from our past Reduce Capacity, Create and collect ancillary fees (2nd bag, itinerary change fees, reservation service fee, IFE, Buy on Board) Reduce capacity, move aircraft to alternate markets

6. AAG Cash position (millions)

7. Strong cash position and multiple sources of liquidity Cash as a % of Revenues Q3 ‘08 Note: All airlines calculated using unrestricted cash and short-term investments at September 30, 2008 divided by revenue for the 12 months ended September 30, 2008. As of December 22, 2008, Southwest had $1.3 billion in cash net of posting $230 million in hedge collateral and not including inflow of $575 million in sale/leasebacks and private placements. Including the inflow, their cash as a % of revenue is approximately 17%. As of November 30 2008, AAG had $1.027 billion in cash and approximately 30% cash to revenue. Source: All company earnings releases and 10Qs as of Q3 2008. AAG 8K as of December 19, 2008. Southwest 8K as of December 23, 2008. Fuel hedging cash collateral Possible sources of liquidity Additional capacity available on line of credit Additional capacity available on pre-delivery payment facility Unencumbered aircraft Forward sale of miles

8. Tools Acquired or Sharpened During these Challenging Times LEAN principles (eliminate waste, just in time, etc.) Project Management –Clear identification of the problem and solution –Measurable outcomes with dates –Frequent reviews of project progress at senior levels –Absolute accountability (things are green or red; if they are red - how can we help move them to green?) Focus on inputs rather than outputs Change management (the human and more difficult part of change)

9. Don’t buy things you can’t afford Don’t borrow money you can’t pay back Don’t agree to things you don’t understand If it doesn’t seem right, it probably isn’t Things your (grand) parents probably taught you that still have a place in today’s business world: