FAIRBANKS, Alaska, May 30, 2002 (BUSINESS WIRE) -- Members of the board of directors, shareholders and employees celebrated the 70th anniversary of Alaska Airlines here today at the annual meeting of Alaska Air Group, Inc. (NYSE:ALK).

The meeting in Fairbanks is designed to commemorate the deep roots the company has had in the 49th State ever since its founding in 1932. It also marks the first time in nearly 30 years that the Seattle-based company has held its annual meeting outside its headquarters city. The last annual meeting outside of Seattle occurred in 1973 in Anchorage.

John Kelly, chairman of Alaska Air Group, told shareholders that even with a sluggish economy and the impact of September 11, Alaska Airlines will grow nine percent in 2002 while Horizon Air will grow 12 percent this year.

"Make no mistake, this has been a tough period for the entire airline industry," said John Kelly. "Despite that, I'm proud of how we've accomplished year-over-year increases in traffic this year compared to our performance during the same period in 2001. Traffic performance is even better when compared to the rest of our industry. Still, I can't overstate how low fares continue to impact the overall revenue picture -- a problem that not only faces us but every other major carrier in the country."

During the meeting, Bill Ayer, president and chief executive officer of Alaska Airlines, announced that Alaska is exercising options with The Boeing Company for two Next Generation Boeing 737s. The planes, Boeing 737-700s, are scheduled for delivery in 2003. The value of each aircraft, including engines and spare parts, is estimated at approximately $50 million. At the same time, the board approved changing a previous order with Boeing for a 120-seat B737-700 to a 172-seat B737-900. Between existing orders and the conversion of options, Ayer said that Alaska Airlines' fleet will total 109 airplanes by the end of 2003, seven more than currently.

In other news, shareholders re-elected Richard A. Wien and Byron I. Mallott along with electing Phyllis J. Campbell and Mark R. Hamilton to three-year terms on the board. Mallott and Wien have served board members for 20 years. Hamilton was appointed to the board last year and Campbell was appointed earlier this year.

Shareholders also approved one ballot proposal for a long-term incentive equity plan for key employees and officers and another for an employee stock purchase plan. Also approved was a shareholder proposal to implement simple majority voting.

CONTACT:          Alaska Air Group
                  Lou Cancelmi, 206/433-3170

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