Alaska Air Group, Inc.
Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K
CURRENT REPORT

Pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934

September 13, 2002
(Date of Report)

ALASKA AIR GROUP, INC.
(Exact name of registrant as specified in its charter)
 
Commission file number 1-8957

     
Delaware
(State or other jurisdiction of
incorporation or organization)		   91-1292054
(I.R.S. Employer
Identification No.)

19300 Pacific Highway South, Seattle, Washington 98188
(Address of principal executive offices)
 
(206) 431-7040

(Registrant’s telephone number)

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ITEM 9. Regulation FD Disclosure
Signature

Table of Contents

ITEM 9.
Regulation FD Disclosure

FORWARD-LOOKING INFORMATION

This report may contain forward-looking statements that are based on the best information currently available to management. These forward-looking statements are intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are indicated by phrases such as “will,” “should,” “the Company believes,” “we expect” or any other language indicating a prediction of future events. There can be no assurance that actual developments will be those anticipated by the Company. Actual results could differ materially from those projected as a result of a number of factors, some of which the Company cannot predict or control. For a discussion of these factors, please see Item 1 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2001. The Company expressly disclaims any duty to update these projections, and makes no representation as to their continued accuracy in the event it does not provide such updates.

Third Quarter 2002 Estimates

                 
    Forecast   Change
    Q3   Yr/Yr
   
 
Alaska Airlines
                
Capacity (ASMs in millions)
     5,196       10.9 %
Fuel gallons (000,000)
     87.2       9.6 %
Cost per ASM excluding fuel (cents)
     8.20       (2.0 )%

For August 2002, Alaska experienced a 3.2% increase in traffic on a 3.6% increase in capacity. However, lower year-over-year load factors, combined with lower yields, resulted in a decrease in revenue per available seat mile (RASM) of 3.0% for August 2002 as compared to August 2001. For July 2002, RASM declined 5.4% as compared to July 2001.

                 
Horizon Air
                
Capacity (ASMs in millions)
     654       17.9 %
Fuel gallons (000,000)
     14.8       0.7 %
Cost per ASM excluding fuel (cents)
     15.0       (14.2 )%

For August 2002, Horizon experienced a 10.3% increase in traffic on a 12.7% increase in capacity. However, lower year-over-year load factors, combined with lower yields, resulted in a decrease in RASM of 9.9% for August 2002 as compared to August 2001. For July 2002, RASM declined 12.5% as compared to July 2001.

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Capacity and Traffic Estimates for 2002

Provided below are capacity (ASMs in millions) estimates for the full year of 2002.

                 
Alaska Airlines capacity
     19,338       7.9 %
Horizon Air capacity
     2,395       11.5 %

Other Financial Information

Cash and Short-Term Investments

Cash and short-term investments amounted to approximately $685 million on August 31, 2002.

Fuel Cost per Gallon

                 
    Cost per   % Change from
    Gallon   Prior Year
   
 
Alaska July
   $ 0.765       (14.9 )%
Alaska August
   $ 0.799       (8.1 )%
Horizon July
   $ 0.773       (16.7 )%
Horizon August
   $ 0.800       (12.1 )%

Current fuel hedge positions for Alaska and Horizon are as follows:

                    
    Approximate % of Expected   Approximate Crude Oil
    Fuel Requirements   Price per Barrel
   
 
September — December 2002
     40 %     $22  
January — December 2003
     35 %     $22  

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Operating Fleet Plan

Provided below are estimated changes in the Alaska and Horizon fleets for 2002 - 2003.

                                       
                    Estimated Change During
            On Hand  
    Seats   YE 2001   2002   2003
   
 
 
 
Alaska Airlines
                                
B737-200C
     111       9                  
B737-400
     138       39       1          
B737-700
     120       16               6  
B737-900
     172       5       1       5  
MD-80
     140       32       (1 )     (4 )
 
            
     
     
 
Total
             101       1       7  
 
            
     
     
 
Horizon Air
                                
Dash 8-100/200
     37       29       (1 )        
Dash 8-400
     70       12       3          
F-28
     69       10       (8 )     (2 )
CRJ 700
     70       9       7       2  
 
            
     
     
 
Total
             60       1       —  
 
            
     
     
 

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

     
          ALASKA AIR GROUP, INC.
Registrant		  
     
Date: September 13, 2002    
     
/s/   Bradley D. Tilden    
   
Bradley D. Tilden
Executive Vice President/Finance and Chief Financial Officer		    

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