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ImprovIng our envIronmental footprInt ALASKA AIR GROUP 2009 ENVIRONMENT REPORT WELCOME Alaska Air Group 2009 Environment Report IN THIS REPORT ABOUT THIS REPORT Welcome to Alaska Air Group’s 2009 Environment Report. Our goal in 2009 PERFORMANCE HIGHLIGHTS publishing this report is to communicate openly with employees, customers, investors, analysts and other key stakeholders about our environmental impact. The hope is that this report will serve as a foundation for increased understanding of the challenges asso­ ciated with continued environmental improvement and aid in the search for innovative solutions. Alaska Air Group | 2009 Environment Report 2 about thIs report Alaska Air Group’s first corporate Environment Report is structured around communicating Alaska Air Group’s commitment to leadership and continuous improvement in environ­ mental performance; openly discussing the key impacts, opportunities, and challenges in our industry; and describing our performance and initiatives in each of the significant areas of environmental impact. Within this structure, we also convey the character, values, and strengths of our people and organizational culture. We are just beginning the process of assessment and reporting. A major task over the past two years has been developing appropriate key performance indicators, measurement processes, and infrastructure for data collection and analysis as a foundation for under­ standing where we are, establishing baseline data, reporting meaningful information, and developing improvement plans. This report focuses on the environment. The time period covered by this report is January 1, 2009, to December 31, 2009, for Alaska Air Group’s two airline carriers: Alaska Airlines and Horizon Air. Where data is available, we describe environmental impacts for two to six years prior to 2009. We have made every effort to accurately and fully assess and transparently report all significant environmental impacts and issues, focusing primarily on those impacts within our direct control. Our determination of significant issues is based on the knowledge of internal staff experts, common industry practices, and informal feedback from customers, employees, and other stakeholders. In the future, we will build more rigorous stakeholder engagement processes to define material issues, obtain feedback on our progress, and dialogue about critical issues and opportunities. Alaska Air Group | 2009 Environment Report 3 2009 PERFORMANCe hIGHLIGHTS ALASKA AIR GROUP (COMBINED) total GREENHOUSE GAS EMISSIONS AND EMISSIONS INTENSITY, 2004–2009 ALASKA AIRLINES FUEL-REDUCTION EFFORTS, 2006–2009 Alaska Airlines and Horizon Air’s greenhouse gas emissions intensity has decreased steadily Over the past four years, Alaska Airlines has invested in more fuel­efficient aircraft and since 2004. This represents a 23% reduction in CO2e* intensity over the past six years and a aerodynamic improvements, instituted fuel­saving procedures, and initiated flying efficiencies 10% reduction in total CO2. that now conserve over 35 million gallons of fuel per year. ( 4.15 230 metric fuel reduction over four years contributions to fuel reduction 220.1 ● Fleet Transition Investments ) 4.05 4.04 220 205.2 tons 20.5 ● Weight Reduction Programs I tons ntensity 3.95 210 3.94 3.93 ● Preconditioned Air (PCA) at Gates 3.91 CO 20 ● Required Navigation Performance (RNP) Programs 3.85 3.86 200 2 E metric per 19.5 ● Winglets (700, 900) 197.5 R 3.75 190 atio 192.2 million 19 ● Other (Cost Index Flying, Direct Routes, etc.) million 3.65 180 ( 171.4 /1,000 RPM 2 183.0 18.5 73% 4% CO 3.55 3.56 170 rpm 18 ) total four-year savings 8% allons 3.45 160 G 2004 2005 2006 2007 2008 2009 I 17.5 FUEL reduction 3% percentages 17 CO2 Equivalent CO2 Metric Tons of CO2 e per Million RPM 140M 10% * CO2e, or carbon dioxide equivalent, is a measure for describing the impact of a given type of greenhouse gas (GHG). 16.5 2% Other GHGs, such as methane and nitrous oxide, are expressed in terms of CO2e. 2006 2007 2008 2009 Fuel Reduction Business as Usual HORIZON AIR INFLIGHT COLLECTION OF RECYCLABLE MATERIALS, 2009 Horizon Air initiated inflight recycling ALASKA AIRLINES INFLIGHT RECYCLING CAPTURE RATE, 2008–2009 efforts in the 1980s. Our flight attendants 17% Recycling capture rates declined in 2009 after a temporary suspension of the program due to now collect over 83% of all recyclable H1N1 concerns. Improvement is a key priority in 2010. materials generated during inflight service. Approximately 70% of all the REcycling 2008 60% food and beverage service waste collection generated in the air is recycled on the rate ground. Horizon Air’s inflight recycling 2009 32% program diverts an estimated 300 tons of ● Total Collected waste from landfills each and every year. 83% ● Total Uncollected Collection Rate Alaska Air Group | 2009 Environment Report 4 Who We are Fueled by Jet A, powered by people Alaska Air Group | 2009 Environment Report 5 Who We are Fueled by Jet A, powered by people in this section Message from Bill Ayer, Chairman and CEO Alaska Airlines and Horizon Air About Alaska Air Group realized long ago that this business Our Core Values is about people more than planes. Our core values of “Alaska Spirit” Alaska Air Group Corporate Environmental Policy and “Horizon Heart” embody this knowledge. These corporate values not only encompass our direct commitment to our customers and employees, but they also set Alaska Air Group on a path to continually embrace the challenges of an ever­changing world, including the necessity for continued environmental improvements. Alaska Air Group | 2009 Environment Report 6 Who We Are MESSAGE FROM bILL AYER ChaIrman and ChIEF eXeCUTIVE OFFICER With our history rooted in the magnificent beauty ofa laska and the pacific northwest, caring for the environment has always come naturally to us. however, like most corporations, over the past decade we have gained a deeper understanding of customers’ and other stakeholders’ increasingly high expectations for environmental stewardship and corporate responsibility. Bill ayer Chairman and CEO alaska air group The traveling public, corporate customers, investors, employees, communities, and regulatory bodies all have increasing requirements for transparency and “Alaska Air Group’s board of disclosure about environmental impacts. Additionally, these stake holders directors, executives and employees expect evidence of proactive reduction of greenhouse gas emissions, energy utilization, materials, water resources, and waste. have a shared vision to continually We aim to meet or exceed these expectations. We also believe there are strengthen our environmental significant business benefits and opportunities in optimizing our environmen­ performance and become an tal performance. Many of these benefits can be shared with customers, environmental leader in the domestic improve employees’ work lives, and increase our contribution to the community and society. airline industry.” Alaska Air Group’s board of directors, executives, and employees have a shared vision to continually strengthen our environmental performance and become an environmental leader in the domestic airline industry. Our strategic decision to upgrade Alaska Airlines and Horizon Air’s fleets with newer aircraft, pioneer­ ing use of next­generation flight guidance technology, investment in more efficient ground systems and vehicles, and programs to reduce excess weight onboard have made Alaska Airlines and Horizon Air domestic leaders in fuel Alaska Air Group | 2009 Environment Report 7 Who We Are | Message from Bill Ayer, Chairman and CEO efficiency. These efforts grew at first from grassroots activities and cost­cutting programs. In 2008, however, Alaska Airlines and Horizon Air began evaluating our environmental impact and formalizing initiatives to reduce our footprint. brad Tilden, president, alaska airlines This report describes the results of those efforts and the major programs at each airline to address our carbon footprint, aircraft and vehicle emissions, “There are more and more people that this planet has to energy use and conservation, resource conservation and recycling, noise support each year, so it’s imperative that we each have pollution, and compliance. It represents a commitment to continually assess as small a footprint as possible. I’m proud of Alaska’s progress our environmental impacts and performance, and identify areas for improve­ with our very fuel­efficient fleet, our winglets, and with our ment. And it allows us to communicate our successes, strategy, and challenges industry­leading flight decks, which allow for the most direct to customers, employees, and other stakeholders, while providing a structure routings possible. But there is much more that we can and for more clearly defining our plans and monitoring our future progress. should be doing.” We have a foundation of initiatives and accomplishments that we can be proud of. Now, we are committed to moving our environmental performance and corporate responsibility to the next level. Jeff Pinneo president and CEO, horizon air Bill Ayer “‘Horizon Air Country’ is a region of unsurpassed natural beauty, Chairman and Chief Executive Officer, and we’re committed to treasuring and protecting it. This is Alaska Air Group reflected in our long­term decisions, such as our use of quiet aircraft with lowest­in­class emissions, as well as in our day­to­ day activities, like our award­winning onboard recycling efforts. These result in outcomes that current and future generations

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