(1)	Title of each class of securities to which transaction applies:

(2)	Aggregate number of securities to which transaction applies:

(3)	Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):

(4)	Proposed maximum aggregate value of transaction:

(5)	Total fee paid:

(1)	Amount Previously Paid:

(2)	Form, Schedule or Registration Statement No.:

(3)	Filing Party:

(4)	Date Filed:

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1.	to elect to the Board of Directors the ten nominees named in this Proxy Statement, each for a one-year term;

2.	to ratify the appointment of KPMG LLP as the Company's independent registered public accountants (the independent accountants) for fiscal year 2014;

3.	to seek an advisory vote to approve the compensation of the Company's Named Executive Officers;

4.	to seek adoption and approval of an amendment to the Company's certificate of incorporation to increase the authorized common stock;

5.	to seek adoption and approval of an amendment to the Company's certificate of incorporation to reduce the par value of the Company's stock;

6.	to consider a stockholder proposal regarding an independent board chairman policy; and

7.	to transact such other business as may properly come before the meeting or any postponement or adjournment thereof.

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•	FOR the election of each of the Board’s ten director nominees named in this Proxy Statement;

•	FOR the ratification of the appointment of KPMG LLP as the Company’s independent accountants for fiscal 2014;

•	FOR the ratification of the compensation of the Company’s Named Executive Officers;

•	FOR the proposal to amend the certificate of incorporation to increase the authorized common stock;

•	FOR the proposal to amend the certificate of incorporation to decrease the par value; and

•	AGAINST the stockholder proposal regarding an independent chairman policy.

•	in a brokerage account can vote by using the voting instruction form provided by the broker or by phone or the Internet;

•	by a bank, and who have the power to vote or to direct the voting of the shares, can vote using the proxy or the voting information form provided by the bank or, if made available by the bank, by phone or the Internet;

•	in trust under an arrangement that provides the beneficial owner with the power to vote or to direct the voting of the shares can vote in accordance with the provisions of such arrangement; and/or

•	in trust in one of the Company’s 401(k) retirement plans can vote by telephone or internet, or by mailing the voting instruction form provided by the trustee.

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•	voting by phone or the Internet before 11:59 p.m. Eastern Time on Wednesday, May 7, 2014 (your latest phone or Internet proxy will be counted);

•	signing and delivering a proxy card with a later date; or

•	voting at the meeting. (If you hold your shares beneficially through a broker, you must bring a legal proxy from the broker in order to vote at the meeting. Please also note that attendance at the meeting, in and of itself, without voting in person at the meeting, will not cause your previously granted proxy to be revoked.)

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•	the admission ticket attached to the top of your proxy card (or made available by Computershare if you submit your proxy online);

•	a copy of the Notice of Proxy and Access Instructions you received by mail;

•	a photocopy of your voting instruction form;

•	a letter from your bank or broker confirming your ownership as of the record date;

•	a brokerage statement evidencing ownership of shares of Alaska Air Group stock as of the record date; or

•	a valid proxy form.

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•	serves as liaison between the chairman and the independent directors;

•	is authorized to call a meeting of the independent directors at any time;

•	is authorized to call a meeting of the full board at any time;

•	presides at meetings where the board chairman is not present or where he/she could be perceived as having a conflict of interest;

•	presides over quarterly executive sessions of the independence directors;

•	approves board meeting agendas and meeting schedules to ensure that appropriate time is allotted to topics of importance;

•	approves information sent to board members;

•	leads the independent directors' annual evaluation of the CEO's performance;

•	conducts interviews of independent directors annually prior to nomination for election;

•	discusses proposed changes to committee assignments with each director; and

•	makes himself/herself available for consultation and direct communication with major shareholders.

•	The Company's Governance Guidelines require that at least 75% of directors be independent as defined by SEC regulations and NYSE listing standards. At present, the Board has determined that 10 out of 11 directors (or 91%) are independent according to these standards.

•

Each of the Audit, the Compensation and Leadership Development, and the Governance and Nominating Committees is required to be composed solely of independent directors. This means that the oversight of key matters, such as the integrity of financial statements, executive compensation, the nomination of directors and evaluation of the Board and its committees, is entrusted exclusively to independent directors.

•	The Board and its committees meet regularly in executive session without management, and they have access to management and the authority to retain independent advisors, as they deem appropriate.

•	The proponent asserts that “Our company had a history of significant restatements, special charges or write-offs.”

•	The proponent correctly cites the fact that that some of our board members are CEOs of other companies, however, he portrays this practice as poor governance practice.

•	The proponent correctly cites the fact that two board members have long tenures, and the board wishes to provide the following context.

•	The proponent states that there is potential for excessive “golden parachute” payments and unvested equity pay upon CEO termination.

•	The proponent states that the CEO can get long-term incentive pay for below-medium performance.

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1.	Develop, monitor and reassess from time to time the Corporate Governance Guidelines.

2.	Evaluate the size and composition of the Board.

3.	Develop criteria for Board membership.

4.	Evaluate the independence of existing and prospective members of the Board.

5.	Seek and evaluate qualified candidates for election to the Board.

6.	Evaluate the nature, structure and composition of other Board committees.

7.	Take steps it deems necessary or appropriate with respect to annual assessments of the performance of the Board and each Board committee, including itself.

8.	Annually review and reassess the adequacy of the Committee's charter and its performance, and recommend any proposed changes in its charter to the Board for approval.

1.	With regard to matters pertaining to the independent registered public accountants:

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a.	appoint them and oversee their work;

b.	review at least annually their written statement regarding their internal quality-control procedures, any material issues raised by their internal quality-control review, and all relationships between the independent accountants and the Company;

c.	maintain a dialog with respect to their independence;

d.	pre-approve all auditing and non-auditing services they are to perform;

e.	review annual and quarterly financial statements and filings made with the SEC;

f.	receive and review communications required from the independent registered public accountants under applicable rules and standards;

g.	establish clear hiring policies for employees and former employees of the independent registered public accountants;

h.	review audited financial statements with management and the independent registered public accountants; and

i.	receive and review required communications from the independent registered public accountants.

2.	With regard to matters pertaining to the internal auditors:

a.	review planned internal audits and their results with the internal auditors;

b.	review the structure and resources of the audit team; and

c.	review any changes to the internal audit charter.

3.	With regard to matters pertaining to controls:

a.	review major financial reporting risk exposure and adequacy and effectiveness of associated internal controls;

b.	review procedures with respect to significant accounting policies and the adequacy of financial controls;

c.	discuss with management policies with respect to risk assessment and risk management, including the process by which the Company undertakes risk assessment and risk management;

d.	discuss with management, as appropriate, earnings releases and any information provided to analysts and ratings agencies;

e.	develop, monitor and reassess from time to time a corporate compliance program, including a code of conduct and ethics policy, decide on requested changes to or waivers of such program and code relating to officers and directors, and establish procedures for confidential treatment of complaints concerning accounting, internal controls or auditing matters; and

f.	obtain and review at least quarterly a statement from the CEO, CFO and disclosure committee members disclosing any significant deficiencies in internal controls and any fraud that involves management or other employees with significant roles in internal controls.

4.	Prepare the Audit Committee Report required for the annual proxy statement.

5.	Annually review and reassess the adequacy of the Committee's charter and performance and recommend for Board approval any proposed changes to its charter.

1.	With regard to executive and director compensation:

a.	recommend for approval by the Board changes in compensation and insurance for the Company's and its subsidiaries' nonemployee directors;

b.	set, review and approve compensation of the CEO and other elected officers of the Company and its subsidiaries; and

c.	establish the process for approving corporate goals relevant to CEO compensation and for evaluating CEO performance in light of those goals.

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2.	Set annual goals under the broad-based Performance-Based Pay Plan and Operational Performance Rewards Plan and administer the plans.

3.	Grant stock awards and stock options.

4.	Administer the supplementary retirement plans for elected officers and the equity-based incentive plans.

5.	Make recommendations to the Board regarding other executive compensation issues, including modification or adoption of plans.

6.

Fulfill ERISA fiduciary and non-fiduciary functions for tax-qualified retirement plans by monitoring the Alaska Air Group Pension/Benefits Administrative Committee, Defined Contribution Retirement Benefits Administrative Committee, and Pension Funds Investment Committee, and approve the membership of those committees, trustees and trust agreements, and the extension of plan participation to employees of subsidiaries.

7.	Approve the terms of employment and severance agreements with elected officers and the form of change-in-control agreements.

8.	Ensure a framework, process and policies are in place for CEO and executive succession, including standards for assessment, and the periodic review of CEO and other executive-level leadership development and succession plans.

9.	Administer and make recommendations to the Board of Directors with respect to the Company's equity and other long-term incentive equity plans.

10.	Administer, review and modify the Company's policy regarding recoupment of certain compensation payments.

11.	Produce the report on executive compensation required for the annual proxy statement.

12.	Annually review and reassess the adequacy of the Committee's charter and its performance, and recommend any proposed changes in its charter to the Board for approval.

1.	Monitor management's efforts to ensure the safety of passengers and employees of the Air Group companies.

2.	Monitor and assist management in creating a uniform safety culture that achieves the highest possible industry performance measures.

3.	Review management's efforts to ensure aviation security and reduce the risk of security incidents.

4.	Periodically review with management and outside experts all aspects of airline safety.

5.	Evaluate the Company's health, safety and environmental policies and practices.

6.	Annually review and reassess the adequacy of the Committee's performance and its charter, and recommend any proposed changes in the charter to the Board or approval.

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1.	The director, within the last three years, has not been employed by and has no immediate family member that has been an executive officer of the Company.

2.	Neither the director nor any immediate family member has, in any 12-month period during the last three years, received more than $120,000 in direct compensation from the Company other than compensation for director or committee service and pension or other deferred compensation for prior service.

3.

With regard to the Company's independent accountant's firm (i) neither the director nor any immediate family member is a current partner of the Company's independent accountants firm; (ii) the director is not a current employee of the independent accountant's firm; (iii) no immediate family member is a current employee of the independent accountant's firm working in its audit, assurance or tax compliance practice; and (iv) neither the director nor any immediate family member was an employee or partner of the independent accountant's firm within the last three years and worked on the Company's audit within that time.

4.	Neither the director nor any immediate family member has, within the last three years, been part of an interlocking directorate. This means that no executive officer of the Company served on the compensation committee of a company that employed the director or an immediate family member.

5.

The director is not currently an employee of and no immediate family member is an executive officer of another company (i) that represented at least 2% or $1 million, whichever is greater, of the Company's gross revenues, or (ii) of which the Company represented at least 2% or $1 million, whichever is greater, of such other company's gross revenues in any of the last three fiscal years. Charitable contributions are excluded from this calculation.

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1.	Internal Process for Identifying Candidates

2.	Candidates Proposed by Stockholders

a.	General Nomination Right of All Stockholders

b.	Consideration of Director Candidates Recommended by Stockholders

c.	Initial Consideration of Candidates Recommended by Qualified Stockholders

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•

Proof of stock ownership (including the required holding period) of the stockholder or group of stockholders is required. The Committee may determine whether the required stock ownership condition has been satisfied for any stockholder that is the stockholder of record. Any stockholder that is not the stockholder of record must submit such evidence as the Committee deems reasonable to evidence the required ownership percentage and holding period.

•	A written statement that the stockholder intends to continue to own the required percentage of shares through the date of the annual meeting with respect to which the candidate is nominated is required.

•	The name or names of each stockholder submitting the proposal, the name of the candidate, and the written consent of each such stockholder and the candidate to be publicly identified is required.

•

Regarding the candidate, such person's name, age, business and residence address, principal occupation or employment, number of shares of the Company's stock beneficially owned, if any, a written resume or curriculum vitae of personal and professional experiences, and all other information relating to the candidate that would be required to be disclosed in a proxy statement or other filings required in connection with the solicitation of proxies for election of directors pursuant to Section 14(a) of the Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder (the “Exchange Act”) shall be provided.

•

Regarding the candidate, information, documents or affidavits demonstrating to what extent the candidate meets the required minimum criteria, and the desirable qualities or skills established by the Committee shall be provided. The Notice must also include a written statement that the stockholder submitting the proposal and the candidate will make available to the Committee all information reasonably requested in furtherance of the Committee's evaluation of the candidate.

•	Regarding the stockholder submitting the proposal, the person's business address and contact information and any other information that would be required to be disclosed in a proxy statement or other filings required in connection with the solicitation of proxies for election of directors pursuant to Section 14(a) of the Exchange Act is required.

•	The signature of each candidate and of each stockholder submitting the proposal is required.

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•	forward the communication to the director or directors to whom it is addressed (for example, if the communication received deals with questions, concerns or complaints regarding accounting, internal accounting controls and auditing matters, it will be forwarded by management to the chair of the Audit Committee for review);

•	attempt to handle the inquiry directly (for example, where it is a request for information about the Company’s operations or it is a stock-related matter that does not appear to require direct attention by the Board or any individual director); or

•	not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.

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(1)	Audit fees represent the arranged fees for the years presented, including the annual audit of internal controls as mandated under Sarbanes-Oxley Section 404, and out-of-pocket expenses reimbursed during the respective year.

(2)	Consists of fees paid in connection with the audit of Air Group’s employee benefit plans in all years and $100,000 in fees related to accounting for the new affinity card contract in 2013.

(3)	Consists of fees paid for professional services in connection with tax consulting related to specific aircraft leasing and acquisition matters. These services were pre-approved by the Audit Committee.

(4)	Consists of fees paid for professional services in connection with (i) the audit of passenger facility charges and examination of related controls, and (ii) the examination of agreed-upon procedures for the U.S. Citizenship and Immigration Services.

•	the aggregate amount of fees paid for all such services is not more than 5% of the total fees paid by the Company to its accountant during the fiscal year in which the services are provided;

•	such services were not recognized by the Company at the time of the engagement to be non-audit services; and

•	such services are promptly brought to the attention of the Audit Committee and approved prior to the completion of the audit.

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(1)	Directors received an annual cash retainer of $43,000. In addition, the compensation for non-employee directors included the following:

•	an annual retainer of $10,000 to the Lead Director, who is also the Governance and Nominating Committee chair;

•	an annual retainer of $8,000 to the Audit Committee chair and $5,000 each to the Compensation and Leadership Development, Governance and Nominating, and Safety Committee chairs;

•	an annual retainer of $1,000 to non-employee directors for service on the board of Alaska Airlines and $1,000 for service on the board of Horizon Air;

•	reimbursement of expenses in connection with attending board and committee meetings as well as expenses in connection with director education.

(2)

In addition to the annual cash retainer, non-employee directors were granted deferred stock units (DSUs) under the 2008 Performance Incentive Plan, with the number of fully vested stock units determined by dividing $46,000 by the closing price of the Company’s common stock on the date of the annual stockholders meeting. The stock units will be paid in shares of common stock on a one-for-one basis following the termination of the director’s service as a member of the Board. In May 2012, the Board approved a Stock Deferral Plan for Non-Employee Directors to provide each board member an opportunity to elect to receive his or her annual award in the form of fully vested shares at the time of grant or

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	Alaska Air Group directors do not participate in any non-equity incentive compensation plans, nor do they participate in a nonqualified deferred compensation plan. Directors do not receive pension benefits for their service.

(3)

As part of each director's compensation, the non-employee director and the non-employee director's spouse were provided transportation on Alaska Airlines and Horizon Air. Included in the All Other Compensation column for each non-employee director is the incremental cost to the Company of providing these benefits. Positive-space travel is a benefit unique to the airline industry. By providing this travel without tax consequences to non-employee directors, the Company is able to deliver a highly valued benefit at a low cost, and believes this benefit encourages non-employee directors to travel, thus enhancing their connection to the Alaska Airlines and Horizon Air products and services. The All Other Compensation column (g) includes the value of reimbursements for taxes on the transportation benefits provided to each director.

(4)	Ms. Sandvik was appointed a director in November 2013, therefore, her retainer was prorated for a partial year.

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•	posted record full-year 2013 income, excluding special items, of $383 million, or $5.40 per diluted share, compared to $339 million, or $4.73 per diluted share, in 2012;

•	shared $105 million (or nearly five weeks of pay) in incentive rewards with all employees;

•	achieved return on invested capital of 13.6%, compared to 13.0% in 2012;

•	repurchased 2,492,093 shares of its common stock (bringing total shares repurchased since 2007 to 21 million);

•	experienced an increase of more than 70% in the price of a share of common stock;

•	received a credit rating upgrade to BB+ from Standard and Poor's with a stable outlook;

•	ranked "Highest in Customer Satisfaction Among Traditional Network Carriers" by J.D. Power for the sixth year in a row; and

•	ranked "number one" in U.S. Department of Transportation on-time performance among major U.S. airlines.

•	Compensation decisions are made by a committee of directors who meet the independence standards of the NYSE and SEC.

•	The Compensation and Leadership Development Committee retains an independent consultant who provides no other services to the Company.

•	There is no provision for the gross-up of excise taxes in connection with change-in-control severance payments.

•	Change-in-control severance payments require a double-trigger event in order to become effective.

•	The Committee has put a recoupment policy in place to recover payments to executives under certain circumstances.

•	The Committee has executive and independent director stock ownership requirements.

•	An anti-pledging and anti-hedging policy is in place.

•	The Company has no executive employment agreements.

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•	For 2013, the Committee approved target-level total compensation for Mr. Tilden that is 80% variable and tied to stockholder value creation. With respect to the other Named Executive Officers, the Committee approved target total compensation that is, on average, 72% variable and tied to stockholder value creation.

•

Executives' bonuses under the Company's annual incentive program are based on the achievement of specific performance objectives (broadly applicable to all employees) that are established at the beginning of the fiscal year by the Committee and are capped at a specified maximum amount. As illustrated in the 2013 Performance-Based Pay Calculation table, the annual incentive plan paid out above target this year primarily as a result of record profitability and excellent safety, operational and customer satisfaction scores.

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Executives' equity incentive awards generally consist of a combination of stock options, time-based restricted stock unit awards, and restricted stock unit awards that vest only if specified performance levels are achieved. The annual performance-based equity awards that were granted at the beginning of 2011 vested at the end of 2013 and were based on the Company's total shareholder return relative to that of a peer group of airline companies. For performance-based equity awards granted at the beginning of 2012 and 2013, the three-year vesting is based 50% on shareholder return relative to the peer group and 50% relative to the Standard and Poors 500 Index. Tying these rewards to total stockholder return ensures that an executive's opportunity to benefit under the award is directly linked to the creation of value for stockholders. To further enhance the link between the interests of executives and stockholders, all of the Company's elected officers are expected to hold, at a minimum, a specified level of Company stock as set forth in the Company's stock ownership policy. As of the record date, Mr. Tilden held Company stock valued at more than twenty times his annual salary, far exceeding the holding requirement set in the stock ownership policy. The other named executive officers are also in compliance with the Company's share ownership policy.

•	to attract and retain highly qualified executives who share the Company's values and are committed to its strategic plan by designing the total compensation package to be competitive with an appropriate peer group;

•	to motivate executives to provide excellent leadership and achieve Company goals by linking incentive pay to the achievement of specific targets that are reflected in the short-term incentive Performance-Based Pay Plan and the Company's strategic plan;

•	to align the interests of executives, employees, and stockholders by tying a large portion of our

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•	to provide executives with reasonable security to motivate them to continue employment with the Company and achieve goals that will help the Company remain competitive and thrive for the long term.

•	Meridian does not provide other services to Alaska Air Group or its subsidiaries. Meridian's services are limited to providing the Committee with advice and information solely on executive and director compensation and related corporate governance matters.

•	The amount of fees paid by the Company during the 12-month period ended December 31, 2013 represents less than one percent of Meridian's total annual revenues for calendar year 2013.

•	Meridian maintains policies designed to prevent conflicts of interest, which policies were detailed to the Committee.

•	No Meridian partner, consultant or employee who serves the Committee has any business or personal relationship with any member of the Committee.

•	No Meridian partner, consultant or employee who serves the Committee, or any of their immediate family, owns any shares of stock of the Company.

•	No Meridian partner, consultant or employee who serves the Committee, or any of their immediate family, has any business or personal relationship with any executive officer of the Company.

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•	encompassing several different financial and operational goals;

•	overlapping the performance periods of awards;

•	incorporating short-term and long-term performance periods of varying lengths;

•	capping short-term cash incentives;

•	allowing Committee discretion to reduce amounts otherwise payable under certain awards;

•	scaling compensation to our industry;

•	considering internal equity among Company executives; and

•	reflecting the current business challenges facing the Company.

•	Air Canada

•	Allegiant

•	AMR Corporation (merged with US Airways in 2013)

•	Delta Air Lines

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•	Hawaiian Holdings

•	JetBlue Airways

•	Republic Airways Holdings

•	SkyWest

•	Southwest Airlines

•	United Airlines/Continental

•	US Airways Group (now trading as American Airlines Group)

•	WestJet

•	they represent a group of sufficient size to present a reasonable indicator of executive compensation levels;

•	they are in the airline industry and their businesses are similar to the Company's business;

•	the median annual revenue of this group approximates the Company's annual revenue; and

•	the Company competes with these peer companies for talent to fill certain key, industry-related executive positions.

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(1)	Amounts are derived from the most recent compensation data available as of the date of this Proxy Statement. In most cases, this is the 2012 base salary as reported in the respective company's 2013 proxy statement.

(2)	Base salary is provided in Canadian Dollars.

(3)	Allegiant's CEO does not receive a base salary.

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•	the individual's contribution to the success of the Company's financial performance;

•	internal pay equity;

•	the individual's performance of job responsibilities; and

•	the accounting impact to the Company and potential dilution effects of the grant.

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•	five times base salary for the CEO; and

•	two to three times base salary, depending on their respective levels of responsibilities, for the other Named Executive Officers.

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(1)

SEC filings sometimes incorporate information by reference. This means the Company is referring you to information that has previously been filed with the SEC and that this information should be considered as part of the filing you are reading. Unless the Company specifically states otherwise, this report shall not be deemed to be incorporated by reference and shall not constitute soliciting material or otherwise be considered filed under the Securities Act or the Exchange Act.

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(1)

The amounts reported in Columns (e) and (f) of the Summary Compensation Table above reflect the fair value of these awards on the grant date as determined under the principles used to calculate the value of equity awards for purposes of the Company’s financial statements (disregarding any estimate of forfeitures related to service-based vesting conditions). For a discussion of the assumptions and methodologies used to value the awards reported in Column (e) and Column (f), please see the discussion of stock awards and option awards contained in Note 11 (Stock-Based Compensation Plans) to the Company’s Consolidated Financial Statements, included as part of the Company’s 2013 Annual Report filed on Form 10-K with the SEC and incorporated herein by reference. For information about the stock awards and option awards granted in 2013 to the Named Executive Officers, please see the discussion under 2013 Grants of Plan-Based Awards below.

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(2)	Non-Equity Compensation includes Performance-Based Pay compensation and Operational Performance Rewards, further described in the Compensation Discussion and Analysis.

(3)

The amount reported in Column (h) of the Summary Compensation Table above reflects the year-over-year change in present value of accumulated benefits determined as of December 31 of each year for the Retirement Plan for Salaried Employees and the Officers Supplementary Retirement Plan (defined-benefit plan) as well as any above-market earnings on each Named Executive Officer’s account under the Nonqualified Deferred Compensation Plan. The number included in Column (h) is an estimate of the value of future payments and does not represent value received. For 2013, the change in the net present value of future payments for Mr. Tilden is shown as 0 because the effect of an increase in the discount rate more than offset any increase in the net present value of future payments. For Mr. Minicucci and Mr. Pedersen, Company contributions to the Defined-Contribution Officers Supplementary Retirement Plan (DC-OSRP) in lieu of the defined-benefit plan are reported in Column (i) and detailed in the table in Footnote (4) below.

(4)

The following table presents detailed information on the types and amounts of compensation reported for the Named Executive Officers in Column (i) of the Summary Compensation Table. For Column (i), each perquisite and other personal benefit is included in the total and identified and, if it exceeds the greater of $25,000 or 10% of the total amount of perquisites and other benefits for that officer, is quantified in the table below. All reimbursements of taxes with respect to perquisites and other benefits are identified and quantified. Tax reimbursements are provided for travel privileges unique to the airline industry. Also included in the total for Column (i) is the Company’s incremental cost of providing flight benefits, annual physical, and accidental death and dismemberment insurance premiums. By providing positive-space travel without tax consequences to the Named Executive Officers, we are able to deliver a highly valued benefit at a low cost to the Company. In addition, we believe that this benefit provides the opportunity for the Named Executive Officers to connect with the Company’s front-line employees. As noted in the Compensation Discussion and Analysis section, in 2011, 2012 and 2013 we paid each of the Name Executive Officers a perquisite allowance equal to 12% of the executive’s base salary in lieu of providing perquisites other than those noted above.

(5)	Mr. Loveless was not a Named Executive Officer prior to 2012. As such, only Mr. Loveless's 2012 and 2013 compensation information is included.

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(1)

The amounts reported in Column (l) reflect the fair value of these awards on the grant date as determined under the principles used to calculate the value of equity awards for purposes of the Company’s financial statements and may or may not be representative of the value eventually realized by the executive. For a discussion of the assumptions and methodologies used to value the awards reported in Column (l), please see the discussion of stock awards and option awards contained in Note 11 (Stock-Based Compensation Plans) to the Company’s Consolidated Financial Statements, included as part of the Company’s 2013 Annual Report filed on Form 10-K with the SEC and incorporated herein by reference.

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(1)	The dollar amounts shown in Column (h) and Column (j) are determined by multiplying the number of shares or units reported in Column (g) and Column (i), respectively, by $73.37 (the closing price of Air Group stock on 12/31/13).

(2)

The performance stock units reported in Column (i) are eligible to vest based on the Company’s performance over a three-year period as described in the Compensation Discussion and Analysis above and in footnote (1) to the Summary Compensation Table above. The performance stock units granted on 2/7/11 will vest based on the goals set for a three-year performance period ending 12/31/13; the performance stock units granted on 2/7/12 will vest based on the goals set for a three-year performance period ending 12/31/14; and the performance stock units granted on 2/11/13 will vested based on the goals set for a three-year performance period ending 12/31/15.

(3)	The RSUs awarded on 2/7/11 will become fully vested on 2/7/14. The unvested options under the 2/7/11 grant will become vested as follows: Mr. Tilden — 5,100 on 2/7/14 and 5,100 on 2/7/15; Mr. Pedersen — 1,380 on 2/7/14 and 1,380 on 2/7/15; Mr. Johnson — 3,250 on 2/7/14 and 3,250 on 2/7/15; Mr. Minicucci — 3,900 on 2/7/14 and 3,900 on 2/7/15; and Mr. Loveless — 1,694 on 2/7/14 and 1,696 on 2/7/15.

(4)

The RSUs awarded on 2/14/12 will become fully vested on 2/14/15. The unvested options under the 2/14/12 grant will become vested as follows: Mr. Tilden — 5,550 on 2/14/14, 5,550 on 2/14/15, and 5,550 on 2/14/16; Mr. Pedersen — 1,826 on 2/14/14, 1,824 on 2/14/15, and 1,826 on 2/14/16; Mr. Johnson — 2,800 on 2/14/14, 2,800 on 2/14/15, and 2,800 on 2/14/16; Mr. Minicucci — 3,450 on 2/14/14, 3,450 on 2/14/15, and 3,450 on 2/14/16; and Mr. Loveless — 1,820 on 2/14/14, 1,820 on 2/14/15, and 1,820 on 2/14/16.

(5)	Mr. Tilden's 2/14/12 performance stock unit award includes an award of 45,460 additional performance stock units in connection with his election to CEO. The units will vest based on the goals set for the three-year performance period ending 12/31/14.

(6)	The RSUs awarded on 11/7/12 will become fully vested on 11/7/15. Mr. Loveless's unvested options under the 11/7/12 grant will become vested as follows 1,933 on 11/7/14, 1,932 on 11/7/15, and 1,933 on 11/7/16.

(7)	Mr. Pedersen's 2/11/13 performance stock unit award includes 13,000 additional stock units in connection with an incentive grant based on the accomplishment of specific operational and financial goals. The units will vest based on the goals set for the three-year performance period ending 12/31/15.

(8)

The RSUs awarded on 2/11/13 will become fully vested on 2/11/16. The unvested options under the 2/11/13 grant will become vested as follows: Mr. Tilden — 4,737 on 2/11/14, 4,738 on 2/11/15, 4,737 on 2/11/16 and 4,738 on 2/11/17; Mr. Pedersen — 1,672 on 2/11/14, 1,673 on 2/11/15, 1,672 on 2/11/16 and 1,673 on 2/11/17; Mr. Johnson — 2,490 on 2/11/14, 2,490 on 2/11/15, 2,490 on 2/11/16 and 2,490 on 2/11/17; Mr. Minicucci — 2,490 on 2/11/14, 2,490 on 2/11/15, 2,490 on 2/11/16 and 2,490 on 2/11/17; and Mr. Loveless — 2,490 on 2/11/14, 2,490 on 2/11/15, 2,490 on 2/11/16 and 2,490 on 2/11/17.

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(1)

The amounts shown in Column (c) above for option awards are determined by multiplying the number of shares by the difference between the per-share closing price of our common stock on the date of exercise and the exercise price of the options. The amounts shown in Column (e) above for stock awards are determined by multiplying the number of vested units by the per-share closing price of our common stock on the vesting date.

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(1)

The years of credited service and present value of accumulated benefits shown in the table above are presented as of December 31, 2013 assuming that each Named Executive Officer retires at normal retirement age and that benefits are paid out in accordance with the terms of each plan described below. For a description of the material assumptions used to calculate the present value of accumulated benefits shown above, please see Note 8 (Employee Benefits Plans) to the Company’s Consolidated Financial Statements, included as part of the Company’s 2013 Annual Report filed on Form 10-K with the SEC and incorporated herein by reference.

(2)

In lieu of participation in the defined-benefit plans, Mr. Pedersen and Mr. Minicucci receive a contribution to the Company’s defined-contribution plans. Specifically, in lieu of participation in the Salaried Retirement Plan, Mr. Pedersen and Mr. Minicucci each receive a Company match contribution to the Alaskasaver 401(k) Plan up to 6% of their eligible wages. In lieu of the Supplementary Retirement Plan, Mr. Pedersen and Mr. Minicucci participate in the Nonqualified Deferred Compensation Plan, which is further described below.

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(1)	Only the portion of earnings on deferred compensation that is considered to be at above-market rates under SEC rules is required to be included as compensation for each Named Executive Officer in Column (h) of the Summary Compensation Table. Because the earnings were at market rates available to other investors, these amounts were not included on the Summary Compensation Table.

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•	receive the highest monthly salary the executive received at any time during the 12-month period preceding the change in control;

•	receive an annual incentive payment equal to the higher of the executive’s target Performance-Based Pay incentive or the average of the executive’s annual incentive payments for the three years preceding the year in which the change in control occurs;

•	continue to accrue age and service credit under our retirement plans; and

•	participate in fringe benefit programs that are at least as favorable as those in which the executive was participating prior to the change in control.

•	the "safe harbor amount," which is equal to the level above which excise taxes are triggered; or

•	the full change-in-control benefits if, after receipt of the full change-in-control benefits and payment of the excise tax, the after-tax amount is greater than the safe harbor amount described above.

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(1)

All employees who retire with more than ten years of service are entitled to flight benefits on Alaska Airlines and Horizon Air. Flight benefits for the Named Executive Officers are for positive-space travel, for which the Company also provides a tax reimbursement. Messrs. Tilden, Pedersen, Johnson and Loveless qualify for these benefits under all termination scenarios. In this column, we show the present value of this benefit, calculated using a discount rate and mortality table that are the same as those used for our pension plan accounting under ASC 715-20 as of December 31, 2013, described above in the section titled Pension and Other Retirement Benefits. Other assumptions include that the lifetime average annual usage is equal to actual average annual usage amounts in 2011 through 2013, and that the annual value of the benefit is equal to the annual incremental cost to the Company, which will be the same as the average of the incremental cost incurred to provide air travel benefits to the executive in those years as disclosed under All Other Compensation in the Summary Compensation Table.

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(2)

Represents the “in-the-money” value of unvested stock options and the face value of unvested restricted stock and performance stock unit awards that would vest upon termination of employment in the circumstances described above based on a stock price of $73.37. The value of the extended term of the options is not reflected in the table because we have assumed that the executive’s outstanding stock options would be assumed by the acquiring company pursuant to a change in control.

(3)	Represents the amount obtained by multiplying three by the sum of the executive's highest rate of base salary during the preceding 12 months and the higher of the executive's target incentive or his average incentive for the three preceding years.

(4)

Represents the sum of (a) the matching contribution the executive would have received under our qualified defined contribution plan had the executive continued to contribute the maximum allowable amount during the employment period, and (b) the contribution the executive would have received under our nonqualified defined contribution plan had the executive continued to participate in the plan during the employment period.

(5)	Represents the estimated cost of (a) 18 months of premiums under our medical, dental and vision programs, and (b) three years of continued participation in life, disability, accidental death insurance and other fringe benefit programs.

(6)	In the hypothetical example above, the best after-tax arrangement results in Mr. Pedersen paying $604,000 in excise tax and in reducing Mr. Loveless's benefit by $30,649.

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(1)	Consists of the aggregate total of shares of common stock held by the reporting person either directly or indirectly, including 401(k) Plan holdings.

(2)

Total beneficial ownership is determined in accordance with the rules of the SEC and represents the sum of the Number of Shares of Common Stock Owned and Options Exercisable within 60 Days columns. Beneficial ownership does not include shares of common stock payable upon the vesting of restricted stock units, none of which will vest within 60 days, as follows: Mr. Tilden, 26,190; Mr. Pedersen, 9,540; Mr. Johnson, 14,400; Mr. Minicucci, 15,050; and Mr. Loveless, 16,330. This table also excludes shares of common stock payable upon vesting of performance stock units, none of which will vest within the next 60 days of the record date, and which are described in the 2013 Grants of Plan Based Awards table.

(3)	We determined applicable percentage ownership based on 68,825,259 shares of our common stock outstanding as of March 18, 2014.

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(1)	We determine applicable percentage ownership based on more than 68,825,259 shares of our common stock outstanding as of March 18, 2014.

(2)	A Schedule 13G/A filed on January 17, 2014 by BlackRock, Inc. reported sole voting power over 4,436,579 shares and sole dispositive power over all 4,644,181 shares.

(3)	A Schedule 13G/A filed on February 13, 2014 by Renaissance Technologies Holding Corporation (RTHC) reported sole voting power over 4,416,158 shares and sole dispositive power over 4,536,397 shares.

(4)	A Schedule 13G/A filed on February 6, 2014 by the Vanguard Group, Inc. reported sole voting power over 40,653 shares and sole dispositive power over 4,227,457 shares.

(5)	A Schedule 13G/A filed on February 14, 2014 by T. Rowe Price Associates, Inc. reported sole voting power over 1,208,370 shares and sole dispositive power over all 3,746,482 shares.

(6)	A Schedule 13G/A filed on February 9, 2013 by PRIMECAP Management Company reported solve voting power over 441,500 shares and sole dispositive power over all 3,595,200 shares.

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