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 fuel-efficient aircraft and since 2004. This represents a 23% reduction in CO2e* intensity over the past six years and a aerodynamic improvements, instituted fuel-saving 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 ı 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 ever-changing 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 stake­holders 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 next-generation 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 cost-cutting 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 fuel-efficient fleet, our winglets, and with our ment. And it allows us to communicate our successes, strategy, and challenges industry-leading 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 long-term decisions, such as our use of quiet aircraft with lowest-in-class emissions, as well as in our day-to- day activities, like our award-winning onboard recycling efforts. These result in outcomes that current and future generations will benefit from—something we’re all quite proud of.”

Alaska Air Group | 2009 Environment Report 8 Who We Are

ABOUT ALASKA AIR GROUP

Alaska Air Group, Inc., is the holding Group’s 2009 full-year net income was Alaska Air Group’s fleet is among the most company for Alaska Airlines and $121.6 million. fuel‑efficient in the nation, which translates to Horizon Air, Seattle-based carriers that Alaska Airlines and Horizon Air have dif­ one of the lowest carbon footprints per revenue collectively serve more than 90 cities ferent brand identities, defined shared through an expansive network in passenger mile (RPM). values, infrastructures, and initiatives. Alaska, the Lower 48, Hawaii, Canada, Alaska Airlines’ pioneering spirit of inno­ and Mexico. Alaska Airlines, which vation and integrity is complemented by accounts for approxi­mately 88% of Horizon Air’s heartfelt caring and con­ Alaska Air Group revenues, has a fleet tinuous improvement for the customer. of 112 Boeing 737 jets serving 50 des­ tinations. As the ninth largest carrier in Alaska Air Group is committed to high the United States, Alaska Airlines oper­ standards of environmental performance ates from hubs in Anchorage, Alaska; and compliance with all regulations. Los Angeles, California; Portland, Ultimate responsibility for environ­men­tal Oregon; and Seattle, Washington. issues rests with our Alaska Air Group Alaska Air Group also owns regional executive team. Environmental Affairs for carrier Horizon Air, which flies to both Alaska Airlines and Horizon Air are approxi­mately 50 destination cities in managed through our joint services the western United States, Canada, Environmental Affairs Department. The and Mexico, with a fleet of 18 jets and Environmental Affairs Department 40 Q400 turboprops. Horizon Air’s reports directly to the chief ethics & hubs are Seattle; Portland; Spokane, compliance officer. Together, Alaska Airlines and Horizon Air service more than 90 destinations in the Washington; and Boise, Idaho. United States, Canada, and Mexico.

Alaska Airlines and Horizon Air are head­quartered in Seattle, Washington. Together, the two airlines employ more than 13,000 people. Alaska Air

Alaska Air Group | 2009 Environment Report 9 Who We Are

OUR CORE VALUES

Alaska Airlines and Horizon Air each have a set of core values that define their unique character, guide decision-making and behavior, and underlie our relationships with customers, the community, the environment, and each other.

Alaska Airlines Core Values Caring “can-do” heritage of Alaska Airlines. Partnership Caring about and helping people is the We embrace an atmosphere where We value the partnership of talented Alaska Spirit soul of Alaska Airlines. We regularly go hard work, initiative, and teamwork individuals combining their efforts to Alaska Spirit is the heart of Alaska the extra mile to help our customers, are a tradition, and where creativity achieve results beyond the sum of Airlines. It springs from our rich our community, our environment, and and innovation flourish. their independent contributions. heritage where aviation plays a vital each other with friendliness, caring, Partnership at Horizon Air is built on role in the life of every resident. and genuine concern. We believe our Horizon Air Shared Values a foundation of trust, cooperation, Throughout our system, the Alaska lives are enriched by individual acts of and mutual respect. Spirit defines the unique character kindness and compassion. Heart of Alaska Airlines. Our fun-loving, “Heart” is what defines the unique Innovation/Initiative energetic, and adventurous Professionalism spirit and character of Horizon Air— We encourage initiative, innovation, and personality flows from this spirit, As proven professionals, we each a family of energetic, optimistic, and creativity throughout the organiza­tion. as does our belief in service and bring a high level of individual skills, enthusiastic people who enjoy what Drive, determination, and hard work— community involvement. From our expertise, and commitment to our they do. From their heart comes the coupled with the active pursuit of new Alaska Spirit comes the pride, the work. We take great pride in the fact pride, commitment, and, above all, the and creative solutions—are essential passion, and the perseverance that that our individual and collective caring that truly sets Horizon Air apart. to Horizon Air’s continued success. sets Alaska Airlines apart. accomplishments have earned broad respect and a reputation for safe, Integrity Continuous Improvement Integrity reliable, quality service. Integrity is the cornerstone value of We seek excellence in our business Our actions will reflect our absolute Horizon Air. That means we have an and are committed to an environment commitment to ethical and honest Resourcefulness uncompromising commitment to of continuous development, learning, behavior. When faced with uncertainty, Our bias toward action and our readi­ honesty and fairness—to being and improvement. We embrace we will always use our best judgment ness to adapt to change and to master ethical, trustworthy, and responsible change as a means to grow, both to do the right thing. difficult challenges exemplify the in all we do. corporately and individually.

Alaska Air Group | 2009 Environment Report 10 Who We Are

ALASKA AIR GROUP CORPORATE ENVIRONMENTAL POLICY

Alaska Airlines and Horizon Air • Conduct business with integrity, believe that environmental responsi­ ensuring compliance with all envi­ bility is an essential part of being a ronmental laws and regulations. ENVIRONMENTAL LEADERSHIP responsible corporate citizen and a • Ensure the responsible use of In 2009, the Alaska Air Group leadership team made a strate­gic commit­ natural fit with our corporate values energy throughout our business ment to measurably reducing its impact on the environment and becoming and our customers’ expectations. through improvements in energy an environmental leader in the domestic airline industry. Our vision is to build cultures at both efficiency, and building design, In July 2009, Alaska Air Group executives chartered a Green Initiative with companies where we fully integrate and the procure­­ment of energy- three specific goals as a core element of our strategic business plan: sustainable environmental practices efficient equipment. into our business of providing safe, 1. Reducing emissions from fuel consumption. • Integrate environmental consid­ reliable air transportation with best-in- erations into daily operational class service and the best customer 2. Reducing emissions from heating and electricity consumption in buildings. and decision-making processes experience. Furthermore, we recog­ throughout the company. 3. Reducing use of nonsustain­able resources, and recycling inflight and nize that environmental responsi­ ­bility building waste materials. can positively impact corporate profit­ • Replace harmful chemical products ability by minimizing operating costs with nontoxic alternatives, when­ through efficient use of resources, ever feasible. • Maintain strict internal environ­ • Endeavor to exceed required levels enhancing the company’s image, and mental practices and policies of compliance wherever possible. minimizing risk and legal liability. For • Foster a culture of environmental everywhere we do business. • Maintain an open and honest these reasons, Alaska Air Group views responsibility among employees • Reduce, reuse, and recycle our dialogue with our employees and environmental responsibility as an and management by promoting materials to the greatest extent stakeholders about the environ­men­ important part of our overall awareness of environmental con­ feasible and procure recycled tal performance of our operations. corporate culture. cerns, actions, and responsibilities. supplies wherever appropriate. • Continually improve environmental In accordance with our vision and • Improve employee environmental • Collaborate with our suppliers and policies, programs, and perfor­mance, values, the management and employ­ performance through procedures, vendors to adopt effective environ­ based on the results of an internal ees of Alaska Airlines and Horizon Air awareness, training, and recogni­ mental practices. environmental audit program. shall strive to: tion of excellence.

Alaska Air Group | 2009 Environment Report 11 OUR ENVIRONMENT Call us fuel-efficiency trailblazers

Alaska Air Group | 2009 Environment Report 12 Our Environment Call us fuel-efficiency trailblazers

in this section

Overview of Environmental Issues The airline industry is a tough and competitive business environment. But we never lose sight of the other environment—the one in which our Additional Environmental Topics families and customers live. That’s why the focus of our environmental stewardship has been on minimizing our carbon footprint and impact on the places we serve. We do this, in part, by reducing emissions from airplane engines and ground equipment, conserving energy in our buildings, and eliminating waste in all areas of our operations.

Alaska Air Group | 2009 Environment Report 13 Our Environment

OVERVIEW OF ENVIRONMENTAL ISSUES

Our goal at Alaska Air Group is to regarding carbon footprint reductions sources of greenhouse GAS emissions in the United States focus our efforts on the most and increasing investor concerns Emissions from aviation make up only 2% important areas of environmental about financial risks of carbon impact, where we have the greatest exposure in corporations they are of the total greenhouse gas emissions in the opportunity to effect positive change. investing in. Additionally, individual United States. Though this number may appear Our strategy and vision emphasize consumers are increasingly concerned small, we recognize that we can and should improvements on the two key about the negative impacts of climate continue to limit our impact. environmental impacts of highest change and their personal carbon concern: footprint; and many corporate clients 1% 2% proactively are working to reduce Carbon Emissions The vast majority carbon emissions across the entire (~99%) of carbon dioxide (CO2) life cycle of their product/service 25% emissions generated by our 34% delivery, including transportation operations are from the combustion of people and goods. This makes of fossil fuel by our aircraft fleet. To a reducing greenhouse gas emissions Percentage of lesser extent, emissions are also U.S. Greenhouse gas a strategic priority for all airlines. CO2 released through burning of fuel to emissionS emissions can currently be reduced power our ground support fleet in the airline industry by these two 5% vehicles and provide heating, cooling, primary methods: modify­ing or and lighting in our ground facilities. changing the aircraft, or flying more 6% efficiently. A third method, farther out The single greatest challenge for 8% 19% Alaska Air Group—and the entire on the horizon, is to use an alternative airline industry—is that our service or more carbon-efficient fuel. ● Noncommercial Aviation ● Agriculture relies on burning fossil fuels. This is Materials and Waste A significant ● Commercial Aviation ● Commercial in a business con­text of global and num­ber of supplies are needed to national pressures and agreements ● Electric Utilities ● Residential serve our combined 24 million ● Industry ● Transportation

Source: U.S. EPA data, 2005

Alaska Air Group | 2009 Environment Report 14 Our Environment | Overview of Environmental Issues

passengers per year. From cocktail for surround­ing communities at many A concerted group effort between our employees, napkins to lubricating oil and toner airports. Upgrading to newer aircraft our contractors, and the airport is required to cartridges, these items are used and and U.S. Federal Aviation Admin­ implement a successful waste reduction and/or disposed of each day at our facilities. istration (FAA) approval of quieter Although individual items may seem and more efficient flight paths present recycling program. small or inconsequential, when oppor­tunities to reduce the noise multiplied by 24 million pas­sengers, impact of our operations. materials, resource use, and waste Safe operations and FAA regulations add up. There are many oppor­tunities necessitate the application of deicing to reduce, reuse, and recycle these fluids during icy conditions. How­ wastes, although each presents its ever, these procedures can impact own unique challenges. Because of stormwater runoff, manage­ment of the noncentral­ized nature of our oper­ which depends on airport deicing ations, and the differing opportunities collection systems. for recycling and procurement in each location, initiating waste recycling and We take these environmental impacts reduction programs can be challenging. seriously and are proud of the prog­ A concerted group effort between ress we have made. We also recognize our employees, our contractors, that there’s more to do. In this report, and the airports we serve is required we accurately describe our perform­ance to implement a successful waste and improvement efforts regarding reduction and/or recycling program. each of these issues. Here is our story thus far in our journey toward more We also report on our efforts to Employees around the system collect and recycle a wide variety of materials, sustainable aviation. including paper, aluminum, plastics, stretch wrap, packing peanuts, toner manage noise. Noise may not always cartridges, fluorescent light tubes, pallets, computer equipment, used oil, be thought of as an “environmental” antifreeze, scrap metal, and batteries. issue for many people, but it can be an unpleasant byproduct of air travel

Alaska Air Group | 2009 Environment Report 15 Our Environment

Our Carbon Footprint

Alaska Air Group is committed to emissions generated in the produc­ Together, Alaska Airlines and Horizon Air have calculating and reducing its environ­ tion of electricity that we consume.) steadily reduced the intensity of their carbon mental impact. As an essential first The inventory included all emissions emissions by 23% since 2004. step in this commitment, Alaska for which Alaska Air Group has

Airlines and Horizon Air conducted operational control, including both ALASKA AIRLINES Greenhouse gas EMISSIONS and a greenhouse gas inventory of our of its wholly owned subsidiaries— Air EMISSIONS INTENSITY, 2004–2009

operations for the years 2004–2009. Alaska Airlines and Horizon Air. 4.00 230 ( metric I

Activity data from selected emission ntensity million

Emissions evaluated in the prepara­ ) 3.00 210

sources were compiled by Alaska Air tons tons

tion of this footprint include:

Group personnel and evaluated by a 2.00 190 million R rpm CO ( 2 atio

third-party environmental consultant. 2 ) e • Combustion of jet fuel during CO metric

1.00 170 per

aircraft operations.

As demonstrated in the graph at 0.00 150 • Ground support vehicle fuel right, for the past six years, Alaska 2004 2005 2006 2007 2008 2009 ı combustion. Airlines and Horizon Air have consis­ Alaska Airlines Emissions Alaska Airlines Intensity Ratio tently reduced their carbon intensity • Electricity usage and heating/ (tons of carbon dioxide per unit Horizon AIR Greenhouse gas EMISSIONS and cooling in our leased and owned of produc­tivity). Although carbon Air EMISSIONS INTENSITY, 2004–2009 buildings. intensity decreased by 23%, the 0.60 310 ( metric I ntensity

total amount of carbon was reduced million

) 0.45 270

Summary of Our by 10% from 2004–2009, due to tons tons 0.30 230

million R increases in air travel demand and rpm Assessment Methodology CO ( 2 atio 2 )

operational capacity. e CO metric

0.15 190 per

All Scope 1 and Scope 2 emissions

were inventoried for our carbon foot­ 0.00 150 print. (Scope 1 emissions are those 2004 2005 2006 2007 2008 2009 ı from direct combustion of fossil fuels, Horizon Air Emissions Horizon Air Intensity Ratio and Scope 2 emissions are indirect Emissions were calculated using Tier 2 methodology for the majority (99%) of our emissions—those from the combustion of jet fuel.

Alaska Air Group | 2009 Environment Report 16 Our Environment | Our Carbon Footprint

AIRCRAFT EMISSIONS

Fuel conservation has always been an Fuel EFFICIENCY RELATIVE TO COMPETITORS important goal for Alaska Airlines and Horizon Air. Not only is it our largest monitoring fuel conservation programs cost—currently accounting for 36% At Alaska Airlines, we have been closely tracking and monitoring fuel of our budget—but it also accounts conservation programs for years. The fuel and financial savings we have for approximately 99% of our carbon estimated in the following pages are based upon data supplied from footprint. Over the years, our fuel equipment manufacturers and Alaska Airlines’ aircraft operational records. reduction efforts at Alaska Airlines #1 This data represents results from Alaska Airlines only. Horizon Air has also Alaska Airlines ranks #1 among the and Horizon Air have resulted in two 10 largest domestic carriers in fuel been implementing numerous fuel conservation measures; however, they of the most fuel-efficient—and carbon- efficiency per available seat mile for were not centrally tracked and managed. In January 2010, Horizon Air efficient—aircraft fleets in the industry. domestic and international travel. joined the fuel metric reporting program, with formats that duplicate those Our current fuel and emis­sion reduc­ of Alaska Airlines as part of an effort to better measure future fuel tion programs fall into three categories (Data Source: DOT Form 41 and 298C) conservation programs. aimed at the highest lever­age areas for substantive improvements: We’ve achieved our most dramatic percentage impacts in fuel and emission reductions through our investments in fleet composition and aerodynamic WHAT WE FLY improvements. These investments have reduced greenhouse gas emissions Fleet composition every year since we made them. While we have already taken the steps Aerodynamic improvements that yield the greatest fuel efficiency results, going forward, we will continue THE WAY WE FLY to look for every opportunity—no matter how big or small—to further Flying efficiencies and flight planning conserve fuel and reduce emissions. These efforts include continuing to Ground flight support transition to ever more fuel-efficient fleets and implementa­tion of enhanced flight capabilities to reduce unnecessary fuel burn. THE FUEL WE USE Alternative fuel sources

Alaska Air Group | 2009 Environment Report 17 Our Environment | Our Carbon Footprint

WHAT WE FLY

Alaska Airlines and Horizon Air have invested more Petroleum-based aviation fuels are the Fleet Transition The Boeing 737-800 than $750 million to replace their aircraft fleets only available fuels in today’s market. jet and the Bombardier Q400 turbo­ with the most fuel-efficient aircraft available. There are numerous research and prop are the aircraft of our future. development projects under way on Beginning in 2006 and concluding

ALASKA’s jets most fuel-efficient in operation today alternate sources of aviation fuels. in 2008, Alaska Airlines replaced its

) However, there are currently no alter­ fleet of MD-80 aircraft with more 18 16.49 15.36 natives to petroleum-based fuels and fuel-efficient Boeing Next-Generation 15 13.12 12.38 12.63 12.75 11.16 11.65 none are expected to be commercially 737s. As a result of its fuselage,

assenger 12 10.76 P

/ viable in the near future. The lowest- wing, and engine design, the 737-800 9 onsumption

C hanging (but most expensive) fruit and 737-900 are two of the most 6 uel allons

F in terms of reducing fuel use and fuel-efficient jet aircraft available, 3 (G 737-900 737-800 A320 737-200 737-700 737-400 A319 MD-80 DC-9 140 subsequent emissions is to simply consuming 18% less fuel compared 172 seats 157 seats 149 seats 182 seats 124 seats 144 seats 122 seats 140 seats 125 seats buy fuel-efficient aircraft. Other to an MD-80. This results in an Jets used by Alaska Airlines Other comparable jets opportunities include modifying the improved fuel efficiency of hundreds aircraft to increase aerodynamics and of gallons per flight hour. As of Horizon’s aircraft among the most fuel-efficient in operation today fuel efficiency and decreasing the Decem­ber 2009, Alaska Airlines’ all- )

weight of aircraft equipment. 737 fleet consists of 51 737-800s and 12 10.6 12 737-900s, 55% of the fleet. Transi­ The Successes 9 tion­ing from MD-80s has resulted

assenger 7.7 7.2 7.3 P 7.1 At Alaska Airlines and Horizon Air

/ 6.7 6.2 in an annual fuel savings of approxi­ onsumption 6 5.8 we’ve changed our fleet inventory and C mately 22 million gallons per year.

uel modified aerodynamic components allons F 3 (G Q-400 CRJ900 E190 CRJ700 Q200 CRJ200 E170 B1900 to increase fuel efficiency. 76 seats 88 seats 99 seats 70 seats 37 seats 50 seats 72 seats 19 seats

Aircraft used by Horizon Air Other comparable aircraft

With an average fleet age of only 7.5 years and 5.8 years, respectively,A laska Airlines and Horizon Air operate two of the youngest, most fuel-efficient aircraft fleets in their class.

Alaska Air Group | 2009 Environment Report 18 Our Environment | Our Carbon Footprint | What We Fly

At Horizon Air, we are transitioning retrofitted all of our eligible 737-700s Through Alaska Airlines and Horizon Air’s from a combined fleet to an all-Q400 and 737-900s. That translates into investments in modern and efficient aircraft fleets fleet. Our current fleet consists of approximately 100,000 fewer gallons and aerodynamic upgrades, such as winglets, we Bombardier CRJ700 regional jets and of fuel consumed per aircraft each save over 30 million gallons of fuel per year. Q400 turboprops. The 76-seat Q400 is year. We estimate the total fuel savings 30% to 40% more fuel-efficient than a from winglets to be 2.2 million gallons comparable jet. Horizon Air originally in 2009. announced our fleet transition in April 2008. How­ever, due to the recession, Weight Reduction Each pound flown we renego­tiated the purchase schedule has a cost in terms of fuel usage. To for the new Bombardier Q400. The reduce fuel con­sumption, we’ve put remaining 18 Bombardier 70-seat our fleet on a weight-loss program. CRJ‑700 jets are expected to be Examples of Alaska Airlines’ weight- phased out by the end of 2012. reduction efforts include using lighter catering carts, removing bilge insu­ Winglets To further improve the lation blankets, and reducing the aerodynamics of our aircraft, Alaska amount of potable water that is Airlines is using winglets (turned-up boarded on each flight. extensions at the tips of the wings) to increase fuel efficiency by 3% to 5%. All of our 737-800 aircraft come equipped with winglets, and we have Above: Flying on a Horizon Air Bombar­dier Q400 turboprop, affectionately known as a “Green Machine,” is roughly equivalent to driving in a car that gets 64 miles per gallon. A Q400 is 30% to 40% more efficient than a comparable-sized jet. Below: Alaska Airlines is using winglets, like the one shown here, to further increase aircraft fuel efficiency by 3% to 5%.T hat translates into approximately 100,000 fewer gallons of fuel consumed per aircraft each year.

Alaska Air Group | 2009 Environment Report 19 Our Environment | Our Carbon Footprint

THE WAY WE FLY

We’ve done almost all we can in terms equivalent of taking 64,000 cars off In our five West Coast airports alone, PCA usage of fleet upgrades and aerodynamic the road or heating nearly 37,000 is expected to reduce CO2 emissions by 75 million improvements to increase our aircraft houses for a year. pounds per year. fuel efficiency. The next best way to Required Navigation Performance save fuel and reduce emis­sions is to fly Alaska Airlines has been a leader in the shortest possible distance between efficient flying since we pioneered the two points. Air space modernization­­­ development of Required Navigation programs, such as those described Performance (RNP) flight guidance below, currently offer our next greatest technology in the mid-1990s. Alaska opportunity for reducing fuel use and Airlines remains the only major decreasing associated emissions. domestic carrier with a 100% RNP- The Challenge equipped fleet and fully trained crews. Modifying existing route structures or RNP technology, which uses the aircraft operations requires a coordi­ global positioning system (GPS), nated effort between the airline, the allows aircraft to fly more direct FAA, and/or the local airport. routes and at lower minimum ele­ vations with pinpoint accuracy. The The Successes use of RNP also allows more direct Altogether, in 2009 the aircraft fuel and efficient landing approaches efficiency initiatives described in and results in fewer weather-related this section saved the airlines over cancellations and diversions. RNP Preconditioned air units (PCAs), like the one pictured above, use 10 times less fuel 35 mil­lion gal­lons of fuel and reduced flying conserved more than 250,000 than a typical 737’s onboard auxiliary power unit. expenses by more than $70 million. gallons of fuel in 2008. Since 1996, The amount of fuel conserved in 2009 we have introduced similar RNP also lessened Alaska Air Group’s procedures at 45% of the airports in carbon dioxide emissions by nearly the state of Alaska, as well as cities 335,000 metric tons. That’s the such as Palm Springs, Portland, and

Alaska Air Group | 2009 Environment Report 20 Our Environment | Our Carbon Footprint | The Way We Fly

Washington, D.C. We are currently average fuel consumption by 10 to is parked, instead of using the aircraft Compared to the previous routes, the laying the groundwork to extend RNP 40 gallons per trip. This equated auxiliary power unit (APU), which is Q routes save over 217 flight miles a technology to even more cities in 2010. to a savings of approximately 1 million the small turbine engine on board the day and almost 200,000 gallons of gal­lons in 2009. Horizon Air imple­ aircraft. A PCA burns approximately fuel per year. In 2006, Horizon Air became the first mented cost-index flying in 2008 for 10 times less fuel than a typical 737’s regional carrier to be certified for RNP Optimized Profile Descent Also both the CRJ and Q400. onboard APU. approaches. On December 30, 2009, known as Continuous Descent Horizon Air became the first scheduled- Single-Engine Taxi Instead of using In 2008, Alaska Airlines started using Approach, this is a procedure in service passenger carrier to operate a both jet engines while taxiing to and ground power units instead of aircraft which aircraft maintain a continuous flight using Wide Area Augmentation­ from the runway, Alaska Airlines has APUs at our 14 busiest airports. descent angle during landing. This System (WAAS) technology. WAAS initiated single-engine taxi procedures Approximately 80% of Alaska Airlines’ method, rather than the traditional takes RNP technology a step further to save fuel. In 2009, by expanding gates are equipped with some sort step-down approach, is designed to by using additional satellites that this program to many of our larger of PCA equipment that allows them reduce fuel consumption and noise monitor GPS satellite signals. It then airports, we have estimated fuel to reduce the use of the APU. Our during the landing phase of a flight. corrects for any errors in GPS satellite savings of 260,000 gallons per year. eventual goal is to reduce APU use In March 2009, Alaska Airlines initiated position. This foolproof navigation This is now an available procedure by 80% on the ground. We saved an an FAA-approved procedure to allow performance system reduces fuel systemwide for Alaska Airlines. This estimated 740,000 gallons of fuel in our planes to follow an optimized burn by allowing pilots to fly straighter is, however, subject to conditions at 2008 and 2.7 million gallons of fuel descent into the Anchorage airport. flight paths and by providing greater the airport and contingent on taxi in 2009. A more gradual descent approach flexibility in choosing alternate times. It is not feasible at smaller to Anchorage will save an estimated Q Routes In 2004, Alaska Airlines and airports in the event of a diversion. airports, which typically have short 30,000 gallons of fuel per month. Horizon Air partnered with the FAA to taxi times. Cost-Index Flying Cost-index flying develop parallel flight routes to the Turboprops on Turbojet Routes In uses onboard computer systems to Preconditioned Air Units Alaska San Francisco Bay and Los Angeles 2008, Horizon Air, working with the calculate the cost effects of flying slow Airlines and Horizon Air are making Basin airports. These routes, FAA, developed procedures to allow versus fast to obtain the most greater use of ground power and identified as “Q,” follow one-way, Q400 aircraft on traditionally turbojet economical speed. Alaska Airlines mobile preconditioned air units direct flight paths from Seattle, arrival routes. Those procedures have used cost-index flying to lower its (PCAs) for aircraft cabin venting, Portland, and Vancouver to specific reduced fuel and emissions by delay­ overall cruise speeds, reducing cooling, and heating while the aircraft airports in the Bay and L.A. areas. ing aircraft descents and maintaining

Alaska Air Group | 2009 Environment Report 21 Our Environment | Our Carbon Footprint | The Way We Fly

more efficient cruise speeds in FAA Next Generation The FAA’s Next Optimized Profile Descent, also known as congested airspace. Since that time, Generation Air Transportation System Continuous Descent Approach, is a navigation we’ve successfully implemented those (NextGen) is a plan to modernize the procedure that reduces both noise and carbon procedures in Seattle, Los Angeles, national airspace system through and Vancouver. On some routes, the 2025, by replacing the current radar- emissions during the landing phase of a flight. savings averages 39 miles—while also based air traffic control system with keeping the aircraft at much higher, satellite-based technology, enabling Traditional step-down approach more fuel-efficient altitudes. more efficient flight routes. These more efficient routes will use less fuel Electronic Flight Bag The Elec­tronic and reduce greenhouse gas emissions. Flight Bag (EFB) is an electronic According to the Air Transport tablet-style computer device that Association, this more efficient air brings information and flexibility to navigation system will trim fuel use the flight deck. It allows flight crews and greenhouse gas emissions by to perform flight management tasks 10% to 15% nationally. Under the Airport more easily and efficiently with less “Greener Skies” project (see next paper. Common EFB benefits include page), we are taking a leading role in paper savings, weight (and therefore bringing NextGen operational and optimized profile descent fuel) savings, early satellite weather environmental benefits to the Seattle detection, and efficient reporting of region. We will also work to replicate flight time elements. Horizon Air those benefits where possible in other replaced its heavy, paper-intensive locations throughout our system. Low flight manuals with EFBs in 2008 in Power an effort to conserve paper and fuel and to enhance safety and on-time performance. A similar program is being evaluated at Alaska Airlines. Airport

Alaska Air Group | 2009 Environment Report 22 Our Environment | Our Carbon Footprint | The Way We Fly

Greener Skies edge of the national move to a RNP and continuous descent proce­ modern, satellite-based air transpor­ dures are part of the Next Generation Alaska Airlines tested new flight pro­ tation system. Air Transportation System, the FAA’s ce­dures to reduce our environmental­ plan to modernize the National Air­ Testing began June 16, 2009, on an impact during airport approaches space System through 2025. This Alaska Airlines 737-700 during a non­ on the west side of Seattle-Tacoma initiative will increase efficiency, commercial flight. Typically, aircraft International Airport (Sea-Tac) in enhance safety, and reduce environ­ follow a lengthy approach pattern and summer 2009. mental impacts. make a series of stair-step descents The project is being conducted in before landing. Using RNP satellite If you’d like to get involved or partnership with the Port of Seattle, guidance technology and a continu­­ if you have questions about the the Boeing Company, and the FAA. ous descent, aircraft can fly from Greener Skies initiative, contact Sea-Tac Airport Dubbed “Greener Skies,” it is focused cruise altitude to an airport runway [email protected]. on using satellite-based flight guidance along a shorter, more direct path at technology (RNP) pioneered by Alaska low power. West Side Approach Airlines to operate more efficiently and reduce aircraft fuel consumption, In addition to fuel and emissions emissions, and noise in the Puget savings, the new procedures will Sound region. Alaska Airlines and reduce overflight noise exposure for Horizon Air are seeking FAA approval an estimated 750,000 people living ● Typical Flight Path ● RNP Flight Path of the procedures, which could be within the affected flight corridors. used by all properly equipped carriers Greener Skies Annual Benefits at Sea-Tac. This project places Sea- Fuel Saved: Tac, our primary hub, on the leading 2.1 Million Gallons

Emission Reduction: 22,400 Metric Tons (≈ 4,100 Cars)

Noise Exposure Reduction: ≈ 750,000 People

Alaska Air Group | 2009 Environment Report 23 Our Environment | Our Carbon Footprint

The Fuel We Use

Alternative jet fuels represent an Alaska Air Group made recent headlines based on our support of alternative opportunity for the future. There fuels and our participation in related projects. are exciting initial successes in the development of alternative, less- carbon-intense jet fuels. Alaska Air Alaska Airlines joins AltAir Fuels and Group is participating in various projects to support the development, Boeing’s biofuel group 14 airlines sign testing, and commercialization of biofuel MOU alternative fuels. Through our mem­ ber­ship with organizations such as the Sustainable Aviation Fuel Users Group, of which we are currently the only domestic airline participating Puget Sound Business Journal | July 13, 2009 Flightglobal | december 15, 2009 member, we have pledged to consider fuels that mini­mize biodiversity World’s Largest Alaska Airlines joins impacts; require minimum land, Airlines Commit to Use Sustainable Aviation water, and energy to produce; and don’t compete with food or freshwater Biofuel in Jets Fuel Users Group resources. We are committed to driving sustainability practices into the global fuel supply chain. At this

time, however, the technology and Earth & Industry | January 6, 2010 Biofuels Digest | July 14, 2009 capacity have not been adequately developed for biofuels to fully substitute for fossil fuels.

Alaska Air Group | 2009 Environment Report 24 Our Environment | Our Carbon Footprint

CARBON EMISSIONS FROM VEHICLES

The remaining 1% of our carbon infrastructure is available to support emissions comes from two sources: its growing fleet of electric GSE. As of fuel burned by our fleet of ground January 1, 2010, over 65% of Horizon Work-From-Home Program support equipment (GSE) vehicles Air’s station-based ground support Approximately 45% of Alaska Airlines reservations agents and 75% of and consumption of fuel and electricity vehicle fleet consists of electric Horizon Air reservations agents participate in a work-from-home program. to heat, cool, and light our buildings. vehicles. At Alaska Airlines, the GSE This eliminates the need for these employees to drive to work and removes fleet is approximately 10% electric. Ground Support Equipment Our GSE more than 300 cars from our local roadways each day. Many of the airports where Alaska consists of forklifts, automobiles, and Airlines operates do not currently aircraft service vehicles, such as bag­ have the capacity to recharge large gage tugs and belt loaders. GSE are cleaner-burning propane units or fleets of electric vehicles. And at many Ground support Vehicle typically powered by petroleum-based hybrid GSE. In August 2009, we were power source of Alaska Airlines’ airports, we do fuels and therefore contribute to our one of eight airlines that signed an not manage any GSE at all; they are overall carbon footprint. Over the years, agreement to buy renewable synthetic owned and operated by contracted both Alaska Airlines and Horizon Air diesel vehicle fuel at Los Angeles ground service providers. Alaska have initiated a variety of programs to International Airport. This deal will Airlines has been testing and evalu­ provide our contractor’s vehicle fleet + move away from fossil-fuel-powered ating electric vehicles for our largest GSE and explore cleaner alternatives. with biodiesel beginning in 2012. operation in Seattle, Washington. 65% This biodiesel will boast a carbon of Horizon Air’s vehicles are electric We look forward to working with the Electric Vehicles We are currently footprint of almost zero and will also Port of Seattle as it upgrades airport replacing fuel-burning vehicles with greatly reduce particulates and sulfur infrastructure to accommodate the electric equipment where it makes emitted by GSE. economic, safety, and compliance placement of vehicle recharging sense. Horizon Air’s strategy has stations over the next three years. been to methodically convert our Alternative Fuels in Vehicles Over the vehicle fleet, wherever practical, 10% past three years, Alaska Airlines has of Alaska Airlines’ vehicles are electric from fuel-powered to electric. A large converted or replaced a portion of proportion of Horizon Air’s vehicle our gasoline-powered GSE fleet with fleet is located at airports where the

Alaska Air Group | 2009 Environment Report 25 Our Environment | Our Carbon Footprint | Carbon Emissions from Vehicles and Buildings

CARBON EMISSIONS FROM BUILDINGS

Building Electricity, Heating, and Environmental Design, is a tool for Horizon Air’s strategy has been to methodically Cooling Although small by compar­i­ improving the quality of buildings, convert our vehicle and equipment fleet, wherever son to the footprint of our aircraft fleet, minimizing their impact on the practical, from fuel-powered to electric. As of our building operations contribute to environment, and reducing operating overall carbon emissions­ through the costs. Although none of our buildings 2010, over 65% of Horizon Air’s GSE runs on use of energy that provides heating, are currently LEED certified, we are electricity instead of fossil fuel. cooling, and lighting. Many of our in the process of obtaining LEED facil­ities are leased from local air­ports, certification for our first construction where we have limited control over project in 2011. heating, ventilating, and air-condition­ Alternative Energy We are also com­ ing systems; however, opportunities mitted to investigating the use of are available in our owned and long- alternative energy sources to heat term-lease buildings, such as our and/or power our buildings. Our corporate headquarters. target is to complete a feasibility study Energy Consumption Our energy and implementation plan for at least conservation program is still in its one facility by the end of 2010. fledgling state. We’ve begun conserv­ ing energy in the buildings we own by upgrading to more efficient light fixtures, lighting systems, and air- conditioning and heating systems throughout the Alaska Airlines and Horizon Air operations. We’ve recently We’re replacing our fuel-burning ground support equipment (GSE) with electric adopted LEED® principles into Alaska equipment (like these aircraft pushback tractors, shown above) wherever practicable. Airlines and Horizon Air’s standard facilities contract language. LEED, an acronym for Leadership in Energy and

Alaska Air Group | 2009 Environment Report 26 Our Environment

MATERIALS AND WASTE

Alaska Air Group has a strategic goal launched by individual station employ­ to reduce the use of nonsustainable ees in offices, at airports, and in resources and to recycle inflight and maintenance facilities around our Why are Alaska Airlines and Horizon Air’s recycling programs different? office waste materials. Achieving this system. Throughout the company, goal depends on innovation and employees challenge themselves Horizon Air owns and operates catering facilities in Seattle, Portland, and collaboration by employees in many and each other to find ways to Boise, where the majority of waste is deplaned. This gives Horizon Air functional areas, key suppliers, air­ reduce, reuse, and recycle resources. tighter control of how the waste is managed, and ultimately, recycled. port management and staff, and The following describes some of Additionally, due to the shorter duration of Horizon Air flights, the waste regulatory bodies. our recycling and waste reduction stream is more consistent and contains less food and food packaging programs along with some of wastes. About 92% of the materials used in service are made from Alaska Airlines and Horizon Air our challenges. recyclable materials, such as plastic, aluminum, or paper. employees are making sure that our commitment to environmental stew­ At Alaska Airlines, approximately 60% to 70% of our waste is deplaned ardship is more than just talk—by Did you know and disposed of at contract flight kitchens. Alaska Airlines’ flights are pursuing corporate initiatives, such longer, with a more complex food and beverage service than a typical as collection of recyclable materials Horizon Air flight. First-class meals, buy-on-board meals, and multiple An estimated 7.5 million pounds on flights, to grassroots efforts, such beverage services increase the overall waste totals and decrease the of trash is generated by the U.S. as the waste reduction initiatives percentage of reclaimable materials. aviation industry every day.

Natural Resources Defense Council 2006 research found that 75% of that trash is recyclable, but only 20% reaches a recycling center.

Alaska Air Group | 2009 Environment Report 27 Our Environment | Materials and Waste

IN THE AIR

Materials Waste Horizon Air recognized for recycling efforts

We have recently committed to Most of our flying public is conscious replacing our current inflight servic­ of the volume of waste that is gener­ eware (materials used during cabin ated in a single flight, and many ask food and beverage service) and other what and how much is recycled. In products with more sustainably this area, we have some great success sourced alternatives. For years, our stories—and some great challenges. inflight cocktail napkins have been printed on 100% recycled content. the success Now, we are looking for more sus­ At Horizon Air, we have had a long tainably sourced and biodegradable and successful history of collecting hot beverage cups and main cabin and recycling inflight waste, with cutlery. Additionally, we are working focused attention since the mid- with our bottled water supplier 1980s. Horizon Air currently recycles (Athena) to provide water in 69% (by weight) of all waste generated 50% recycled-content bottles. during inflight service. Flight atten­ dants collect newspapers, magazines, aluminum cans, plastic cups, and plastic and glass bottles from pas­ On May 14, 2008, the Port of Portland honored Horizon Air with an Aviation sengers for recycling. Wine corks, Environmental Excellence Award for its efforts in recycling items used during cardboard, shrink wrap, coffee inflight service. grounds, and aluminum and plastic pop rings associated with inflight service are recycled at Horizon Air’s main food and beverage locations in Seattle, Portland, and Boise.

Alaska Air Group | 2009 Environment Report 28 Our Environment | Materials and Waste | In the Air

The challenge materials. In 2009 in Seattle, flight Alaska Airlines is no less concerned attendants captured 32% by weight about inflight waste reduction. In of recyclable materials generated 2008, we began our co-mingled in flight. This fell off significantly from inflight recycling program. We the 60% collection rate we measured originally focused on collecting and in 2008, the first year we implemented recycling inflight waste at Seattle- the program. One of the key contri­ Tacoma International Airport, in butors to the decline in our collection sup­port of our broader goal of increas­ efforts occurred in summer of 2009, ing the recycling recovery rate of all when we temporarily suspended our Alaska Airlines food service waste. recycling program in response to We chose our Seattle kitchen as our H1N1 virus concerns. Unfortunately starting point for monitoring and the recycling program was not fully implementing our inflight recycling resumed as planned. program for two reasons: Our Seattle contract catering kitchen is our largest We are committed to fixing this prob­ and busiest and manages the majority lem and increasing our recovery rate. Horizon Air’s flight attendants capture 83% of all recyclable materials (plastic, of Alaska Airlines inflight waste and In 2010, we’re setting an ambitious aluminum, and glass) generated during inflight service. catering materials, and the Seattle area target of 100% collection and recovery has a well-developed foundation and of all inflight recyclable materials marketplace for co-mingled recyclable systemwide.

Alaska Air Group | 2009 Environment Report 29 Our Environment | Materials and Waste | In the Air

Another challenge remains in improv­ ing the percentage of collected material “Our inflight recycling that is, in fact, recycled by our catering How do we measure our waste? kitchens. Alaska Airlines contracts with efforts have been among Alaska Airlines has an “Onboard Waste Green Team” composed of food service kitchens in 23 locations. members from the Flight Attendant Group, Catering, and Fleet Service. our greatest points of Food service waste is deplaned and The team works with assistance from local airports, such as Portland managed at all contract catering pride for as long as and Seattle, to perform periodic waste assessments. During a waste kitchens, but currently only seven of I can remember— assessment, the team dons disposable coveralls, gloves, and boots to these facilities recycle the materials gather waste from the aircraft and beverage carts, then sorts the waste by through them, we’ve generated by Alaska Airlines. Our type (aluminum, paper, nonrecoverable, etc.) and weighs the end results. analysis shows four key contributing helped care for the This helps us evaluate how much of the waste materials could be recycled factors to this lack of buy-in: planet while giving and how much is collected for recycling by the inflight staff. countless customers yet 1. Limited ability at the local level to collect and handle recyclable another reason to think 3. Limited dock space to place Alaska Airlines will continue to materials. Not all states and recycling compactors. advocate for and encourage contract favorably of us.” municipalities have the infra­ flight kitchens and airports to set structure to support robust 4. Most kitchens service international Jeff Pinneo, up recycling programs. We will also President and CEO, Horizon Air recycling programs. flights, which by current regulation evaluate the feasibility of deplaning must incinerate or autoclave all of 2. Limited staff on short turnaround inflight waste at the airport rather their regulated wastes, so many timelines. than sending it back to the catering kitchens do not have a practice kitchens in the food service carts. of recycling.

Alaska Air Group | 2009 Environment Report 30 Our Environment | Materials and Waste

ON THE GROUND

Materials airway bills. In the past five years, Waste we’ve eliminated over 30% of the As two of the early leaders in e-ticketing paper forms we use to conduct Office and airport buildings partici­ and ticketless travel, Alaska Airlines business. There are many oppor­ pate in varied recycling programs and Horizon Air have eliminated tunities to further expand these (dependent on municipal-level capa­ thousands of tons of excess paper. paper-saving initiatives throughout bilities)—generally paper, aluminum, In December 2008, both Alaska the company—for example, many of and plastics are collected. Other Airlines and Horizon Air eliminated our operational programs currently materials that we recycle around our paper ticket jackets. This saves rely heavily on paper. We look forward system include stretch wrap, packing approximately 10 million ticket to future progress in transitioning pea­nuts, toner cartridges, fluorescent jackets, or roughly 850 pulp trees, to paperless systems. light tubes, pallets, computer equip­ per year. We have also continued ment, used oil, antifreeze, scrap to reduce printed material through We also have taken steps toward metal, and batteries. Recycling of the condensing or co-branding of incorporating sustainability criteria office and airport waste materials is required forms and converting to into our procurement process for currently decentralized, with program electronic format, such as electronic evaluating the purchase of new responsibility delegated to local Alaska Airlines Line Maintenance employees in products and services; however, this managers. We are working on ways Seattle recycle approximately 4,000 steel oil cans effort is still in the early stages of to evaluate and measure our efforts per week. maturity. in order to improve the collection and By eliminating paper recycling of these materials. Although ticket jackets, Alaska our office facilities already participate in waste recycling programs, we will Airlines and Horizon continue to identify opportunities Air save 10 million to expand and streamline recycling ticket jackets, or about capabilities throughout our system. 850 pulp trees, a year.

Alaska Air Group | 2009 Environment Report 31 Our Environment

ADDITIONAL ENVIRONMENTAL TOPICS

Deicing airport design and operations and Examples of our actions to reduce below the published EPA Stage 4 available technology. At many large noise levels include the following: Aircraft Noise Standards. An additional area of environmental airports, the stormwater runoff is • Fleet modernization is a key com­ concern is deicing fluid management. collected and treated; however, many ponent to noise reduction. Our Compliance Operating in cold climates requires a smaller airports do not have deicing oldest and noisiest planes have plan to ensure that frost/ice buildup collection systems. In partnership Alaska Air Group recognizes that been retired. Our current fleet is on aircraft wings does not compromise with local airport authorities, Alaska environmental compliance is funda­ among the youngest and quietest flight safety. Today’s industry standard Airlines and Horizon Air follow mental to running a successful in the United States. Our entire for ensuring safe flights during winter numerous best management prac­ business and has structured the fleet meets or exceeds federal noise weather involves spraying aircraft sur­ tices aimed at reducing the volume of Corporate Compliance Office to certification standards. faces with a diluted mixture of ethylene deicing fluid runoff—such as deicing include Environmental Affairs. The glycol or propylene glycol. These director of environmental affairs, pads, vacuum trucks, ramp scrubbers, • Actively pursue FAA approval of chemicals mix readily with water who is supported by three environ­ etc. All employees who deice are given quieter landing procedures, such as and snow. The ability of glycol to mental managers, reports directly to training in the local procedures and Optimized Profile Decent (OPD). biodegrade quickly after use is both best management practices for the chief ethics & compliance officer. positive and negative in terms of preventing stormwater pollution • We actively participate in discus­ The director and each manager are environmental impact. On the plus at each airport we serve. sions with airports regarding land responsible for environmental com­ side, it is relatively nontoxic and does use and operating procedures pliance within designated regions not remain in the environment for Noise to minimize noise impacts to of the United States, Canada, and an extended period of time. On the surrounding areas. Mexico. The Environmental Affairs minus side, the quick biodegradation Alaska Airlines and Horizon Air Department ensures compliance with • By working with local airport may remove oxygen from local maintain a strong focus on reducing all federal, state, and local environ­ authorities and the FAA, we have waterways and harm aquatic life. airplane noise and its impact on the men­tal laws and regulations. It also helped to develop and use noise- Opportunities for reducing deicing communities we serve. Our noise develops corporate environmental reducing takeoff procedures as our fluid are restricted by FAA regulations, reduction program focuses on three policy, provides technical guidance standard procedure for all flights. aircraft manufacturer procedures, and areas: improved technology, effective to internal operating departments, available technology. Collecting and land use management, and noise- • Horizon Air’s Q400 aircraft has a con­ducts environmental training, managing runoff is constrained by reducing operational procedures. cumulative 25.9 dB noise level performs audits, and reports

Alaska Air Group | 2009 Environment Report 32 Our Environment | Additional Environmental Topics

environmental performance to upper instituted sustainability training for Under our Dollars for Doers program, Washington, and Oregon, the management and the Alaska Air new employees. our employ­ees are given $10 per hour Washington Wildlife and Recreation Group Board of Directors. by the company to be donated to Coalition, as well as other environ­ Additionally, through the efforts of the organ­ization(s) for which they mental organizations, such as the individuals and local “Green Teams,” volunteer, up to $1,000 per year, Alaska Raptor Center. We’ve recently Employee Engagement more employees are keeping environ­ per employee. Our Matching Gift added the National Forest Foundation mental issues top of mind. No amount of corporate activity is Program brings the company and to our charity miles donation website. possible with­out the engagement of individual employees together in For more information on how you its employees, and this report would Employee Involvement support of organizations our employ­ can contribute your extra mileage not be complete without mention of ees have strong relationships with. plan miles to an environmental Alaska Airlines and Horizon Air are the remarkable contributions being Under this program, Alaska Airlines charity, please visit our website committed to serving our communi­ made by hundreds of individuals and Horizon Air will match employee at www.alaskaair.com/as/www2/ ties by developing meaningful and throughout the com­pany on behalf contributions to nonprofit institutions company/csr/charity-miles.asp. enduring relationships with organiza­ of our planet. or organizations. tions representing diverse causes and concerns, including environmental Employee Education ones. In addition to our corporate Charitable Giving giving programs, our employees give Employees who work at our airports Alaska Airlines and Horizon Air generously of their own time, talent, and with chemical products complete Corporate Giving support health and and treasure to a variety of organiza­ several hours of environmental train­ human services, arts and cultural tions in the communities we serve ing every year. Training covers the programs, and education and and many do so by volunteering for basics of waste management, pre­ environmental organizations. We environmentally focused organizations. venting water pollution,­ handling focus on communities we serve and hazardous materials, and preventing We encourage our employees to be where a signi­ficant number of our The Alaska Airlines/Horizon Air Seattle Green and responding to hazardous mate­ involved in their communities by employees live or work. Alaska Team held an e-Cycle event on Earth Day, rials spills. Selected subcontractor April 22, 2009. Employees brought in hundreds offering the following programs: Airlines and Horizon Air are also staff are also trained to our high proud to be associated with The of old computers, television sets, and other electronic waste from home that were standards. In 2009, both airlines Nature Conservancy of Alaska, responsibly reused or recycled.

Alaska Air Group | 2009 Environment Report 33 LOOKING FORWARD We can see for miles and miles— and that’s not good enough

Alaska Air Group | 2009 Environment Report 34 looking forward We can see for miles and miles— and that’s not good enough

in this section

Goals and Commitments for 2010 and Beyond Being good stewards of our environment Summary is not only good business—it’s the right thing to do. We’re seeking to make meaningful changes to minimize any environmental impact, and our efforts are centered on reducing emissions from fuel consumption in the air and on the ground. We’ve already made significant improvements, but there is more to be done. Our ambi­tious goals for 2010 and beyond demonstrate that we’re not resting on any past accomplishments. And we’ll keep raising the bar as we improve our ability to monitor environmental impacts and track our progress.

Alaska Air Group | 2009 Environment Report 35 Looking Forward

GOALS AND COMMITMENTS FOR 2010 AND BEYOND

Alaska Air Group’s strategic commit­ We will continue to develop our We are commited to becoming an environmental ments are to measurably reduce our strategic management of environ­ leader in the domestic airline industry and to impact on the environment and mental goals, setting explicit targets, measurably reducing our impact on the become an environmental leader in leading initiatives, and monitoring the domestic airline industry. Our our progress to achieve both break­ environment. Green Initiative strategic objective through solutions and build continuous has three specific goals, summarized improvement into our operations earlier in this report: and business processes.

1. Reducing emissions from fuel Specific goals for the near future consumption. are provided in the table on the following pages. 2. Reducing emissions from heating and electricity consumption in buildings.

3. Reducing use of nonsustainable resources and recycling inflight and workplace waste materials.

In the future, we will continue to invest in enhancing the efficiency of our 737 fleet (such as the 737-800, shown above) as well as move to an all Q400 fleet—the most fuel-efficient aircraft in its class.

Alaska Air Group | 2009 Environment Report 36 Looking Forward | Goals and Commitments for 2010 and Beyond

Impact Area Project Name Description

Reduce emissions from fossil fuel Fly more Greener Skies Obtain FAA approval to fly Required Navigation Performance procedures, being consumption efficiently designed under the Seattle Greener Skies project, at least during low-traffic periods, in 2011. This project represents a partnership between Alaska Airlines/Horizon Air, the Port of Seattle, the FAA, and The Boeing Company. The purpose of the project is to bring quieter, more fuel-efficient approach paths to Seattle-Tacoma International Airport, saving equipped airlines more than

2 million gallons of fuel and 22,400 metric tons of CO2 annually, as well as reducing noise exposure for hundreds of thousands of people in the Puget Sound region. Alaska Airlines | Horizon Air

Implement enhanced flight-planning capabilities in order to reduce the amount of additional fuel loaded on each flight, above what is required to safely conduct the flight. The below capabilities will be implemented by year-end 2010 as part of this fuel efficiency effort:

Flight Plan Review Implement a system by year-end 2010 to provide closer estimates of fuel boarded and used for each flight. Improved fuel planning can mean less fuel burned and emissions produced to carry additional fuel. Safety always remains the paramount consideration when deciding how much fuel to board. Alaska Airlines

Aircraft Performance Monitoring Implement a program by year-end 2010 to track aircraft perfor­ mance as it relates to fuel consumption and efficiency. The program allows staff to be alerted if an aircraft’s fuel efficiency changes. Alaska Airlines

Improved Plan Takeoff Weight Prediction Implement by year-end 2010 a system to review the variability of bag counts for weekly and seasonal fluctuations to improve estimated planned takeoff weights. More accurate planning can reduce the amount of unnecessary fuel loaded. Safety always remains the paramount consideration when deciding how much fuel to board. Alaska Airlines

Flight Planning Implement by year-end 2010 the new flight-planning features for Alaska Airlines to optimize the fuel efficiency of flight routes. The flight-planning system can dynamically calculate routes that utilize wind direction and speed to determine the most fuel-efficient flight path. Alaska Airlines

Alaska Air Group | 2009 Environment Report 37 Looking Forward | Goals and Commitments for 2010 and Beyond

Impact Area Project Name Description

Promote Lead Northwest regional effort to identify best practices related to the responsible development the develop­ment and commercialization of sustainable aviation fuels. Alaska Airlines | Horizon Air and adoption of Continue negotiations regarding the purchase of renewable jet fuel and diesel derived from sustainable camelina. Alaska Airlines | Horizon Air aviation fuels

Address Participate in the Port of Seattle GSE Consortium. Seattle-Tacoma International Airport (SEA) has emissions on a goal of adapting and upgrading infrastructure to accommodate electric vehicle charging stations the ground by second quarter 2012. Alaska Air Group will increase the percentage of its electric GSE in SEA, including bag tractors, gate pushbacks, and belt-loaders, as this infrastructure becomes available. Alaska Airlines | Horizon Air

Reduce emissions from heating and LAX Board Room Obtain LEED certification on LAX Board Room by year-end 2011. Alaska Airlines | Horizon Air electricity consumption in buildings Corporate Upgrade and install more efficient heating/cooling systems at Alaska Airlines Corporate Headquarters Headquarters by year-end 2010. Alaska Airlines HVAC upgrades

Reduce use of nonsustainable Inflight recycling Increase the recycling rate of inflight waste with a target of 100% by year-end 2010. The focus resources and recycle inflight waste is on both the collection of recyclable materials inflight and the recycling of such materials once deplaned. Alaska Airlines

Inflight Identify inflight serviceware products that can be replaced with organic, sustainable, recyclable, or serviceware compostable alternatives and initiate a replacement plan by year-end 2010. Alaska Airlines

Alaska Air Group | 2009 Environment Report 38 Looking Forward

SUMMARY

At Alaska Air Group, we’re committed Moving toward more sustainable air to proactively applying our pioneering transportation will require intensive spirit of innovation and our deep caring focus and the creative solutions of for customers and the environment to Alaska Air Group leadership, our the continual pursuit of more sus­tain­ environmental specialists, all employ­ able air transportation. Environmental ees, and our suppliers, partners, and performance and leadership are prior­ other stakeholders. We hope that ities for Alaska Air Group. communicating our commitment, challenges, and progress unleashes We have always cared about the the creativity and innovation of environment and living up to our everyone touched by Alaska Airlines corporate responsibility, but in light and Horizon Air. We are proud of of emerging global issues and what we have accomplished, but higher expectations of business, we fully acknowledge that we are at the are taking it to the next level. beginning of a journey. Please join us!

Alaska Air Group | 2009 Environment Report 39 INVITATION FOR FEEDBACK

We greatly appreciate your comments and suggestions regarding this report. Please contact us at www.alaskaair.com/consumeraffairs

This report has been produced as an electronic document as part of our commitment to environmental responsibility. If you choose to print out all or part of it, please recycle the printed pages when you are finished.

Alaska Air Group | 2009 Environment Report 40