UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

Filed by the Registrant  Filed by a Party other than the Registrant 

Check the appropriate box:

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.

The Board of Directors of Alaska Air Group, Inc. (Air Group or the Company) is soliciting proxies for the 2023 Annual Meeting of Shareholders (the Annual Meeting). This Proxy Statement contains important information for you to consider when deciding how to vote on the matters brought before the meeting. Please read it carefully.

The Board of Directors has set Friday, March 10, 2023 as the record date for the Annual Meeting. This means that owners of Alaska Air Group common stock as of the close of business on that date are entitled to receive this notice, attend and vote during the Annual Meeting. There were 127,464,546 shares of Air Group common stock outstanding on the record date.

Internet Availability of Proxy Materials. On or about March 24, 2023, shareholders of record, beneficial owners and employee participants in the Company’s 401(k) plans were mailed a Notice of Internet Availability of Proxy Materials (the Notice) directing them to www.proxyvote.com where they can access the Company’s 2023 Proxy Statement and Annual Report on Form 10-K for the year ended December 31, 2022 (the Annual Meeting Materials). The Company’s 2022 Form 10-K was filed with the Securities and Exchange Commission (SEC) on February 13, 2023. If you prefer to receive a paper copy of the proxy materials, please follow the instructions on the Notice and the Annual Meeting Materials will be mailed to you.

Attending the Annual Meeting. We will host the Annual Meeting live via the webcast. Any shareholder can listen to and participate in the Annual Meeting. Whether or not you attend the meeting, we encourage you to vote on-line or by phone or to complete, sign and mail your voting instruction form or proxy prior to the meeting.

Submit Your Questions. We invite you to submit any questions of general shareholder interest to the Assistant Corporate Secretary via email at allie.wittenberger@alaskaair.com, or via the Shareholder Forum at www.proxyvote.com. You can submit questions beginning on March 24, 2023. We will answer questions of general interest during the meeting as time permits. We will also include answers to your questions on www.alaskaair.com under About Alaska/Investor Relations following the meeting. If you encounter issues accessing the website or the virtual meeting, please contact allie.wittenberger@alaskaair.com.

ALASKA AIR GROUP, INC.

NOTICE OF ANNUAL MEETING AND PROXY STATEMENT

TABLE OF CONTENTS

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING AND OTHER STATEMENTS

This Proxy Statement contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may be identified by words like “anticipate,” “expect,” “project,” “believe,” “plan,” “may,” “estimate,” “intend” and other similar words. These forward-looking statements are based on our beliefs, assumptions and estimates using information available to us at the time and are not intended to be guarantees of future events or performance. Factors that may cause actual results to differ materially from those contemplated by the statements in this Proxy Statement can be found in our most recent Annual Report on Form 10-K filed with the SEC and in the Quarterly Reports on Form 10-Q that we have filed or will file hereafter under the heading “Risk Factors” and “Safe Harbor for Forward-Looking Statements.” The forward-looking statements speak only as of the date of this Proxy Statement and undue reliance should not be placed on these statements. We disclaim any intention or obligation to publicly update or revise any forward-looking statements. This cautionary statement is applicable to all forward-looking statements contained in this document.

This Proxy Statement contains statements regarding individual and Company performance objectives and targets. These objectives and targets are disclosed in the limited context of our compensation plans and programs and should not be understood to be statements of management’s future expectations or estimates of future results or other guidance. We specifically caution investors not to apply these statements to other contexts.

Website References

You may also access additional information about Alaska Air Group at investor.alaskaair.com. References to our website throughout this Proxy Statement are provided for convenience only and the content on our website does not constitute a part of this Proxy Statement.

TO OUR SHAREHOLDERS

Alaska Air Group has a history of navigating periods of post-downturn recovery with agility, emerging with stronger competitive positioning and durable advantages. This recovery is no different. In 2022, our industry faced unprecedented volatility and we were challenged in unexpected ways. Our people rose to these challenges, delivering unwavering safety and the exceptional customer care that is unique to Alaska and Horizon.

In 2022 we experienced unprecedented leisure travel demand strength. This strength drove our revenue to a record $9.6 billion, 10% above 2019 with capacity trailing our 2019 size by 9%. With this strong backdrop and our disciplined focus on efficient operations and low costs, we led the industry with an adjusted pre-tax margin of 7.6% (1). We expect to continue to build on this momentum and margin expansion again in 2023.

Our financial strength and the conservatism of our balance sheet are enduring trademarks of our business that have enabled us to recover more quickly than others in the industry this cycle. In 2022, we produced $1.4 billion in cash flows from operations, and our adjusted net debt to EBTIDAR was 1.0x (2), well below our target of 1.5x or lower. Given the renewed stability of our business, and improving financial trajectory, we re-started our share repurchase program this February and will spend up to $100 million on share buybacks this year to offset annual dilution from our ESPP and employee compensation programs. Balanced capital allocation is a key aspect of our management philosophy, and we are pleased to be one of the first airlines to take this step forward.

As we have shared previously, we are well positioned to grow 8% to 10% in 2023 before returning to our long-term target growth rate of 4% to 8% per year in 2024 and beyond. We recently expanded our order book with Boeing, bolstering our decades-long relationship with a great partner. In doing so, we also secured visibility to strategic growth for years to come. Having completed most of our mainline single fleet transition in 2022, our growing fleet of new Boeing MAX aircraft is driving us forward to more cost-and fuel-efficient operations. Our fleet renewal remains a key component of our path to net zero along with our broader sustainability efforts and staying true to our values by doing the right thing to protect the beautiful places we serve and connect.

Recognizing and investing in our employees for their dedication and hard work is another key aspect of Alaska Air Group’s success. Last year we completed several labor deals, which was a significant achievement and is critical to support our long-term growth plans in this highly competitive industry. With the stability and clarity of these labor deals, we can fully focus on our future and grow together.

On the commercial side of our business, strategic partnerships and strong alliances are a growing source of strength for Alaska Air Group. Our renewed credit card deal with Bank of America drove significant revenue growth in 2022 and will continue to grow in 2023. We are always searching for ways to bring more value to our guests, and we believe the expanded credit card benefits will do just that. Our membership in oneworld and our West Coast International Alliance with American Airlines are also bringing value to our guests by enhancing our global reach. Our partners’ international flights out of our hubs are set to increase, which means our guests have more options than ever, helping us fulfill our mission to keep guests and communities connected.

1

As we have for many years, we are investing in ways that serve our employees, our guests, our communities, and our shareholders. We believe this approach has enabled Air Group’s previous success and will deliver a strong future for all our stakeholders. Economic uncertainty and external volatility are likely to remain part of our operating environment for the foreseeable future, but leveraging our core DNA – including disciplined costs, operational excellence, and a remarkable caring culture – gives us great confidence that we are primed for many more successful years ahead.

Thank you for your support, and for your investment in Alaska Air Group.

(1) Refer to Appendix A for the reconciliation of adjusted pre-tax margin.

(2) Adjusted net debt to EBITDAR ratio can be reconciled to GAAP financial measures in the 2022 10-K (Item 7, page 42).

2

PROXY STATEMENT SUMMARY

Matters to be Voted On

Governance Highlights

As part of Alaska Air Group’s commitment to high ethical standards, our Board follows sound governance practices. Many of these practices are described in more detail in our Corporate Governance Guidelines, which are available on the Company’s website at www.alaskaair.com under About Alaska/Investor Relations.

3

4

Our Board

The Board has nominated 11 director nominees for election at the Annual Meeting. Each of the director nominees currently serve on the Board and were previously elected by the Company’s shareholders at the 2022 Annual meeting.

On February 13, 2023, Susan J. Li informed the Company that she will not stand for reelection to the Board of Directors at the Annual Meeting, in order to focus on her responsibilities as chief financial officer of Meta. Ms. Li has been on the Board since 2018, and serves on the Audit Committee and the Innovation Committee.

Jessie J. Knight, Jr., who has served on the Board for more than 17 years, and sits on the Safety Committee and the Compensation & Leadership Development Committee, will retire effective with the Annual Meeting in accordance with the Company’s director age limits.

In connection with these departures, the Boards of the Company and its principal subsidiaries Alaska Airlines, Inc. and Horizon Air, Inc. reduced the number of director seats from 13 to 11 effective with the Annual Meeting.

All nominees meet the New York Stock Exchange (NYSE) governance standards for director independence, except for Mr. Minicucci, who is not independent due to his position as an executive officer of the Company.

5

6

Board Diversity and Skills Matrix

The Board recognizes that diversity brings unique perspectives, leads to more effective risk management and better alignment with guests, employees, and the communities the Company serves. The Board’s nomination process, detailed in the Director Nomination Policy section below, has aided in the identification of candidates with diverse qualifications, backgrounds, geography, race, ethnicity, gender and age. Currently, 66% of board leadership positions are held by female and/or racially/ethnically diverse directors. Ms. Bedient became the Company’s first female Board Chair in 2022.

7

Executive Compensation Practices

Our executive compensation program is designed to attract and retain top talent, align with our business strategy, and reward the achievement of key business goals. The following practices help ensure alignment of interests between shareholders and executives and are considered good governance by our Compensation and Leadership Development Committee (the Committee) and historically by the majority of our shareholders.

8

Board Leadership

The Company’s board leadership has generally included a combined chair-CEO role complemented by a strong independent lead director role. However, the Board separates these roles from time to time, at its discretion, as it did in connection with Mr. Minicucci’s transition to CEO in 2021 along with Ms. Bedient's election as non-executive Board Chair in 2022.

In deciding whether to separate the CEO and Board Chair roles, the Board considers, among other things, the experience and capacity of the sitting CEO, the rigor of independent director oversight of financial, operational, safety and governance issues, the level of transparency between management and the Board, and the existence of other checks and balances that help ensure independent thinking and decision making by directors.

The non-executive Board Chair responsibilities include:

Executive Sessions

The Board holds executive sessions of independent directors quarterly, in accordance with the Company’s Corporate Governance Guidelines. The non-executive Board Chair presides over these executive sessions. Each Committee also holds an executive session of independent directors quarterly (presided over in each case by the respective committee chair) and includes key management personnel, as appropriate, on an individual basis in order to advance risk oversight and transparency.

9

Risk Oversight

Alaska Air Group has adopted an enterprise-wide risk analysis and oversight program. This program is designed to:

The Enterprise Risk Matrix is approved annually by the Audit Committee and regularly reviewed by the Board. The Audit Committee also receives quarterly updates regarding the program and an annual in-person review of the program’s status by the audit and quality assurance executive. Under the program, the Audit Committee also works with the audit and quality assurance executive and members of the management executive committee to annually identify the most pressing risk issues for the next year. This subset of the risk matrix is then used as a framework for periodic reports by the designated management executive to the appropriate board entity for heightened oversight. Furthermore, these areas of emphasis regarding risk are specifically reviewed and discussed with executive management annually and are incorporated into the development of the Company’s strategic objectives for the coming year.

The Company believes that its leadership structure, discussed in detail in the Board Leadership section in this Proxy Statement, supports the risk oversight function of the Board for the same reasons that it believes the leadership structure is most effective for the Company, namely that, while facilitating open discussion and communication with independent members of the Board, it ensures that strategic discussions are led by an individual with a deep understanding of the highly technical and complex nature of the airline business.

For specific risk oversight functions, refer to Board Committee and Risk Oversight Functions section below.

Director Orientation and Continuing Education

New directors participate in one-on-one introductory meetings with executive leaders and are given presentations on the Company’s strategic plans, financial statements, safety culture and other key issues. Directors are encouraged to enroll in continuing education programs on corporate governance and other critical issues associated with their service on the Company’s board.

Code of Conduct and Ethics

The Company has adopted the Code of Conduct and Ethics, which applies to all company employees, officers and the Board of Directors. The Code of Conduct and Ethics may be found on the Company’s website at www.alaskaair.com under About Alaska/Investor Relations. Information on the Company’s website, however, does not form a part of this Proxy Statement. The Company discloses on its website any amendments (other than technical, administrative or non-substantive amendments) to, and any waivers from, a provision of the Code of Conduct and Ethics granted to directors or executive officers to the extent required by applicable NYSE listing standards and SEC rules.

Prohibition of Speculative Transactions in Company Securities

The Company’s insider trading policy prohibits the Company’s directors and executive officers, including the Named Executive Officers, as well as employees in the positions of managing director or above and certain other employees, from engaging in certain speculative transactions in the Company’s securities,

10

including short-term trading, short sales, publicly traded options (such as puts, calls or other derivative securities), margin accounts, pledges of Company securities and certain forms of hedging or monetization transactions such as zero-cost collars and forward sale contracts.

Approach to Environmental, Social and Governance Matters (ESG)

The Company’s purpose is “creating an airline people love” and its leaders believe that the best path to creating long-term value is to deliver for the Company’s four primary stakeholders -- employees, customers, shareholders, and communities. The Company believes its success depends on the ability to provide safe and reliable air transportation, foster guest loyalty by providing exceptional customer service and low fares, maintain a low-cost structure to compete effectively, and attract and retain qualified, engaged employees. Leaders strive to achieve these objectives as a socially responsible company that values not only performance but also people, communities, and the environment.

Air Group’s roots are in connecting rural Alaskan villages with essential services like food, medical supplies, and mail delivery – and those values are with us today. We recognize there is much work needed to address our impacts on the environment, to expand opportunity equitably, and to ensure that all people are and truly feel safe, respected, and equal.

The Company’s values are to Own Safety, Do the Right Thing, Be Kind-Hearted, Deliver Performance, and Be Remarkable. These guide our daily business, operations, and governance, and stewardship of our impact on the environment, people, and communities. We focus on the areas of our greatest impact and the issues most important to our four primary stakeholder groups noted above. Amongst those, our highest priorities and those that will require focused effort are: (1) reducing greenhouse gas emissions, particularly carbon dioxide and (2) advancing racial equity and opportunity inside the Company and across communities.

More broadly, we consider this work in four categories: we’re all about people, we fly greener, we invest for strong communities, and we make flying matter.

ESG Governance and Oversight

The Governance, Nominating and Corporate Responsibility Committee of the Board oversees the Company’s practices, reporting, and progress to its ESG goals, including social and environmental and climate impacts. The Committee includes members with deep experience in energy and environmental matters drawn from experience in multiple industries, plus members with leadership experience in human capital, governance, safety, and risk.

In addition to the annual reporting cycle, the Governance, Nominating and Corporate Responsibility Committee reviews a quarterly dashboard on progress to goals, and management commentary on milestones and trends. The Board has directed that sustainability and ESG be leading parts of the Company’s strategy and has regular discussions about this work including topics specific to climate impact and diversity, equity, and inclusion.

The Safety Committee receives regular updates on environmental risk, and the Compensation and Leadership Development Committee is responsible for oversight of human capital matters, including advancing diversity, equity, and inclusion such as through recruitment, hiring, retention, development, and culture building.

At a management level, a member of our executive committee has formal responsibility for driving progress and disclosure in sustainability and ESG. And because this work is inherently cross-functional, the Company has also formalized governance and oversight of ESG at the management level. An ESG Executive Steering Committee meets quarterly for oversight of performance and work toward the goals

11

and is responsible for ensuring progress and subject matter experts are responsible for driving and reporting progress for each of our ESG goals. These groups engage senior executives across all areas of accountability for delivering on ESG – including operations, finance, human resources, legal, real estate, commercial divisions, government affairs and philanthropy.

ESG Disclosure

Alaska Air Group voluntarily reports progress annually on ESG goals. The 2021 report, including data per the Sustainability Accounting Standards Board (SASB) framework for aviation and an appendix addressing the Task Force for Climate Related Financial Disclosure (TCFD) framework, can be found by visiting www.alaskaair.com/esg.

The Company’s 2022 report, to be published in the second quarter 2023, will report further progress against our 2025 goals.

Our 2025 goals and commitments were established with input from stakeholders across the Company and externally, and covers the areas of carbon, waste, water, racial equity, community involvement, labor practices, safety, crisis management, privacy and data security, and responsible political engagement. Additionally, the Company submits annual disclosure to CDP and the Dow Jones Sustainability Index.

Climate Strategy

Climate change presents significant risks to communities across the globe, and extreme weather and temperature events impact our operations. The Company believes deeply in the transformational benefits of air travel to connect people with one another, help people understand one another, and enable communities to grow, thrive, create jobs and economic benefits. Air Group is committed to reducing our climate impact, with a principal focus on reducing greenhouse gas emissions alongside broader focus on other climate and ecosystem impacts.

The Company has committed to short and long-term goals for reducing our climate impact. Our long-term goal is to achieve net zero carbon emissions by 2040, following a five-part strategy: (1) increasing the efficiency of our operations to avoid fuel use where we can, (2) renewing our fleet with the more fuel-efficient Boeing 737MAX aircraft, (3) increasing use of sustainable aviation fuels, and (4) enabling innovative technology including future zero emissions propulsion alternatives, and (5) using high-quality carbon offsets and removals where necessary to meet our targets due to insufficiently available technology to fully decarbonize. While our preference is for in-sector approaches, we recognize that there is not today enough technology or sustainable aviation fuel available to fully decarbonize aviation. The pace of innovation and expansion of new technologies will be critical for our industry’s long-term path to net zero.

The Company currently offtakes sustainable aviation fuel at San Francisco International Airport, has several agreements for future offtake, and is working with other producers such as SkyNRG Americas to enable future West Coast production of SAF. Alongside oneworld alliance partners, we have committed to an objective of utilizing 10% SAF by 2030 as long as sufficient product is available, and we will continue to advocate for public policy to enable growth in commercially available supply.

Beginning in 2021, we included a carbon emissions target as part of our company’s goals-based incentive pay plan for all employees. Performance surpassed targets in both 2021 and 2022. This metric remains in our performance-based pay program to underscore a company-wide commitment to efficiency and sustainability.

Diversity, Equity, and Inclusion

The Company values the importance of diversity, equity and inclusion in the workplace and believes that our airlines should be places where everyone feels they belong – employees and guests alike. We

12

believe every person should be treated with respect regardless of race, ethnicity, capability, age, gender, gender expression, or sexual orientation and that guests should always feel welcome on board our aircraft. Employees deserve to feel safe and have a sense of belonging when they come to work. Racism and discrimination have no place in our workplace or onboard our aircraft.

Our Board and leadership team believe that aviation enables opportunity and has an important role in advancing diversity and equity. We are committed to advancing diversity, equity and inclusion in all forms. We’ve set 2025 commitments and goals to advance racial equity through diverse leadership representation, an inclusive culture, and public leadership with a focus on creating opportunities for employment, engagement and advancement for diverse employees throughout the organization. We are driving initiatives at all levels of the company to achieve these goals, including supporting education pipelines that create career pathways for diverse talent, and focusing on attracting and retaining diverse talent through leadership development and sponsorship programs. To underscore the accountability of leaders to make progress in these areas, beginning in 2021, a DEI metric was included in the performance-based segment of executives’ long-term incentive equity compensation.

In 2022, we’ve made progress against our goals and continue to listen, learn and adjust our approach and actions as needed to ensure we deliver on those commitments. This year we also signed the Airlines for America’s commitment to improve accessibility and services for passengers with disabilities.

Community Involvement

The Company is involved in the communities where our employees and guests live and fly through corporate philanthropy, community engagement, employee volunteerism, and grants from the Alaska Airlines Foundation. A core area of focus, and the mission of the Alaska Airlines Foundation, is to inspire, equip, and enable young people to imagine and reach career opportunities, in aviation and beyond. In the last several years, this work is done through the lens of advancing racial equity.

The Company’s corporate philanthropy includes using our core asset of flight to transport people for school, to needed medical care, to respond to crisis and urgent needs, or to make a wish come true. This makes flying matter. Additionally, through Alaska’s Care Miles program, guests can contribute their miles to organizations that are aligned with their passions.

In 2022, we resumed in-person volunteer events, including our signature Aviation Day in Seattle and Portland to get young people excited about opportunities across the industry, and our focused Week of Care featuring coordinated employee volunteer events across our major hub communities.

Political Contributions and Engagement

Public policy affects our ability to achieve Company goals, meet customer needs and provide shareholder value. As such, the Company believes it is important to engage in public policy making processes at the federal, state and local levels, which includes making political contributions where appropriate and permitted by law.

The Company is committed to adhering to the highest standards of ethics in engaging in activities that seek to advocate legislative positions that support our business and operations. To ensure contributions are made in a manner consistent with the Company’s goals and shareholder’s interest, the Company has adopted a Policy on Political Contributions and Engagement. The Policy can be found at: https://investor.alaskaair.com/policy-political-contributions

Policy Overview

In the Policy on Political Contributions and Engagement, the Company describes our interests in advocating for policies in support of its business and industry, including through, among other things,

13

participating in trade associations and making political contributions where appropriate and permitted by the law.

The policy includes procedures for making political contributions and expenditures, including with respect to candidates for public office, political parties, referenda and ballot initiatives. The policy also covers management of the Alaska Air Group Political Action Committee (AAG PAC).

The policy indicates that, consistent with federal campaign finance laws, the Company does not make corporate political contributions to federal candidates, political parties or political committees, but notes that some state and local jurisdictions permit the Company to contribute directly to state and local candidates, political parties, referenda and ballot initiatives.

With regard to federal contributions, the Company has established a separate segregated fund through the AAG PAC registered with the FEC. The AAG PAC is non-partisan and organized on a strictly voluntary basis with participation only by eligible employees. The policy further describes how the AAG PAC is overseen, noting that all checks drawn from the AAG PAC must be approved by two AAG PAC Board members.

The policy describes that the Company complies with all federal, state and local laws and requirements associated with political engagement, including the Company’s lobbying activities.

Dues and Contributions Disclosures

Through active links included in the Company’s Policy on Political Contributions and Engagement posted on the Company’s website (at the link referenced above), the Company discloses its direct political contributions, contributions made through the AAG PAC, as well as participation in trade associations . The Company updates these disclosures semi-annually (generally, August and February of each year). Specifically, the Company discloses:

The Company also provides through our website (at the link referenced above) links to the Company’s publicly available lobbying disclosures required to be submitted quarterly to the Secretary of the U.S. Senate and the Clerk of the U.S. House under the Lobbying Disclosure Acts.

Process and Oversight

As detailed above, the Company’s Policy on Political Contributions and Engagement provides detailed information about the decision-making process for our political contribution and lobbying activity and the person(s) responsible. For example, as stated in the Company’s policy:

14

Shareholder Communications

Any shareholder or interested party who wishes to communicate with the Board or any specific director, including the Board Chair (who presides over executive sessions of the independent directors) or with the independent directors as a group, may write to:

Board of Directors

Alaska Air Group, Inc.

PO Box 68947

Seattle, WA 98168

Depending on the subject matter, management will:

At each meeting of the Governance, Nominating and Corporate Responsibility Committee, the Corporate Secretary or Assistant Corporate Secretary presents a summary of all communications received since the last meeting of the Governance, Nominating and Corporate Responsibility Committee and will make those communications available to any director on request.

The Board has also implemented a protocol for shareholder-director engagement that provides long-term holders of a significant percentage of the Company’s stock a process for communicating directly with the Board in person or by phone. Investors may request information regarding engagement with shareholders by contacting the Assistant Corporate Secretary at (206) 392-5380 or by email to allie.wittenberger@alaskaair.com.

Each year, the Company reaches out to shareholders that have requested such engagement or that have demonstrated a long-term, significant investment in the Company. In the past year, the Company sought

15

feedback from shareholders representing approximately 50% of the Company’s common stock on relevant matters related to corporate governance and shareholder value. The feedback from those discussions provided a framework for certain disclosures in this Proxy Statement.

Board Responsiveness to 2022 Nonbinding Shareholder Proposal

At the 2022 annual meeting, a shareholder proposed that the Company must seek shareholder approval of any senior manager’s new or renewed pay package that provides for severance or termination payments (including the value of cash, accelerated equity, perquisites, and a range of other compensation afforded under any contract or plan in which the executive participates except for life insurance, pension, and vested deferred compensation plans) with an estimated value exceeding 2.99 times the sum of the executive’s base salary plus target short-term bonus. The proposal passed with just over 54% of votes cast at the 2022 annual meeting.

We subsequently requested meetings with our 25 largest institutional shareholders, which in aggregate, own approximately 50% of our common stock, seeking their views on the proposal and feedback on implementation approaches. The non-executive Board Chair, the Chair of the Compensation and Leadership Development Committee and the Chair of the Governance, Nominating and Corporate Responsibility Committee met with every shareholder who expressed an interest in engaging, including our 10 of our largest shareholders. Below is a summary of our engagement, the feedback we received, and the Board’s efforts to implement the proposal.

For context, the Company is not a party to any contract that promises severance or termination payments to executives outside the context of a change in control. Our change in control agreements provide for cash severance, equity acceleration, and other benefits being delivered to an executive if he or she is involuntarily terminated without cause or resigns for good reason within a defined period following a change in control.

For further context, the Company has certain arrangements that may provide benefits to executives on a termination outside a change in control. For instance, our equity awards generally require continued service to vest, but vesting may accelerate if the executive retires after meeting tenure and age requirements or leaves employment due to death or disability. We also have executive severance guidelines that, in the discretion of the Compensation & Leadership Development Committee, may result in cash compensation and travel benefits being extended to an executive who is separated from employment without cause. See the Potential Payments Upon Change in Control and Termination section for additional information about these scenarios.

During our engagement with shareholders, we pointed out several factors (described below) that, in the Board’s view, make the shareholder proposal overly restrictive on the Committee’s discretion, unnecessary in light of our historically conservative severance practices, and put the Company at a competitive disadvantage.

16

The shareholders we spoke with were generally supportive of capping cash severance pay to executive officers; however, they expressed mixed views on whether the value of any accelerated equity should be counted against the cap. Around half of the shareholders felt that accelerated equity should be counted against the cap (and supporting calculating such value in accordance with Section 280G of the U.S. Internal Revenue Code). The other half expressed the view that counting accelerated equity value against the cap was overly punitive and believed that only cash compensation should be counted against the cap, so long as equity awards continued to vest in accordance with existing equity award agreements. The majority of shareholders we spoke with were comfortable, and in fact expected, severance compensation in a change in control event to be governed by separate dual-trigger change in control agreements with executives, rather than under the policy advanced by the proposing shareholder.

Notably, none of these major shareholders expressed any concerns related to the Company’s existing or historical pay practices or our current change in control agreements.

Implementation Actions based on Shareholder Engagement

Based on feedback from the shareholders owning a majority of our shares and in response to the proposal, the Compensation and Leadership Development Committee enacted a policy that requires the Company to obtain shareholder ratification of any new or renewed severance arrangement (aside from one arising from our dual-trigger change in control agreement terms, death or disability) with an executive officer if the value of cash payments, perquisites and any equity award acceleration (with the value of accelerated equity calculated in accordance with Section 280G of the U.S. Internal Revenue Code as this method provides an existing, objective framework for determining the value of acceleration of equity awards), exceeds 2.99 times the sum of the executive officer’s base salary plus the average value of earned short-term incentive pay plan bonuses measured over the prior three years. Consistent with the shareholder proposal, our policy excludes life insurance, pension, and vested deferred compensation plans from the severance package value counted against the cap.

Virtual Meeting Philosophy

The Company has conducted our Annual Meeting as a virtual meeting since 2016. The Company also offers shareholders the option to ask questions via the live chat feature. The Board believes that holding the Annual Meeting in a virtual format provides the opportunity for participation by shareholders with less expense and fewer logistical issues than an in-person meeting. This approach also allows the meetings to remain focused on matters directly relevant to the interests of shareholders in a way that recognizes the value to shareholders of an efficient use of Company resources.

The Board intends that the virtual meeting format provide shareholders a level of transparency as close as possible to the traditional in-person meeting format and takes the following steps to ensure such an experience:

17

Proposal 1: Election of Directors to One-Year Terms

The Company’s Bylaws provide that directors shall serve a one-year term. Directors are elected to hold office until their successors are elected and qualified, or until resignation or removal in the manner provided in the Company’s Bylaws. Eleven directors have been nominated for election this year and each has consented to serve a one-year term ending in May 2024. There are no family relationships among the directors and our executive officers.

18

19

20

21

22

23

24

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE

ELECTION OF THE 11 DIRECTOR NOMINEES NAMED ABOVE.

25

Structure of the Board of Directors

In accordance with the Delaware General Corporation Law and the Company’s Certificate of Incorporation and Bylaws, the Company’s business affairs are managed under the direction of the Board of Directors. Directors meet their responsibilities by, among other things, participating in meetings of the Board and board committees on which they serve, discussing matters with the Board Chair, CEO and other executives, reviewing materials provided to them, and visiting the Company’s facilities.

Pursuant to the Bylaws, the Board of Directors has established five standing committees, which are the Audit Committee, the Compensation and Leadership Development Committee, the Governance, Nominating and Corporate Responsibility Committee, the Safety Committee and the Innovation Committee. Only independent directors serve on these committees. The Board has adopted a written charter for each committee, which they review annually and update as necessary. These charters are posted on and can be accessed at www.alaskaair.com under About Alaska/Investor Relations.

The table below shows the current members and chairs of the standing board committees.

Board Committee Memberships

1 Ms. Bedient serves as the Non-executive Board Chair.

2 Mr. Knight's and Ms. Li's service on the committee's they serve will end concurrent with the end of their board

service.

Board Committee and Risk Oversight Functions

The principal functions of the standing board committees, pursuant to their respective charters, are as follows:

26

27

28

29

Board and Committee Meetings

In 2022, the Board of Directors held 5 meetings. The standing board committees held the following number of meetings in 2022:

Audit Committee – 4

Compensation and Leadership Development Committee – 5

Governance, Nominating and Corporate Responsibility Committee – 4

Safety Committee – 4

Innovation Committee -- 4

Each director attended at least 75% of all board and applicable committee meetings during 2022. Each director is expected to attend the Company’s Annual Meeting. All directors attended the 2022 annual meeting.

30

Director Independence

The Board of Directors of the Company has determined that all non-employee directors (Mses. Bedient, Hogan, Li, Lofton and Sandvik and Messrs. Beer, Conner, Elwell, Fonseca, Knight, Jr., Thompson and Yeaman), and including each member of the Audit Committee, Compensation and Leadership Development Committee, Governance, Nominating and Corporate Responsibility Committee, Safety Committee and Innovation Committee are independent under the NYSE listing standards and the Company’s independent director standards that are set forth in the Company’s Corporate Governance Guidelines. Mr. Minicucci is not independent due to his position as our CEO.

The Corporate Governance Guidelines are available on the Company’s website at www.alaskaair.com under About Alaska/Investor Relations. In making its determination, the Board considered any transactions or relationships between the director, members of his or her family and organizations with which that director or family members have an affiliation, on the one hand, and us, our subsidiaries and management, on the other hand. In this regard, the Board considered the value of charitable contributions made by the Company to an organization with which Ms. Bedient is affiliated in a non-fiduciary capacity as a member of its advisory board. After consideration of these matters and in accordance with the Board’s independent director criteria, the Board affirmatively determined that the matters did not represent material relationships with the Company because the amounts of the contributions were immaterial with respect to the Company’s and the outside organization’s annual revenues.

Specifically, the Board has determined that independent directors must have no material relationship with the Company, based on all material facts and circumstances. At a minimum, an independent director must meet each of the standards listed below.

For the purposes of these standards, “Company” includes all Alaska Air Group subsidiaries and other affiliates. “Immediate family member” includes the director’s spouse, parents, children, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and anyone sharing the director’s home.

The independence standards for the members of the Audit Committee provide that, in addition to the foregoing standards, they may not receive any compensation other than director’s fees for board and audit committee service and permitted retirement pay, or be an “affiliate” of the Company apart from their capacity as a member of the Board as defined by applicable SEC rules. Each member of the Company’s Audit Committee meets the additional independence, financial literacy and experience requirements

31

contained in the corporate governance listing standards of the NYSE relating to audit committees or as required by the SEC. The Board has determined that Mr. Yeaman is an Audit Committee financial expert as defined in SEC rules.

The independence standards for members of the Compensation and Leadership Development Committee provide that, in addition to the foregoing standards that apply to directors generally, the Board must consider all factors specifically relevant to determining whether a director has a relationship to the Company that is material to that director’s ability to be independent from management in connection with the duties of a member of the Compensation and Leadership Development Committee, including the source of compensation of such director and whether such director is affiliated with the Company or any of its subsidiaries or affiliates. Each member of the Company’s Compensation and Leadership Development Committee meets this additional independence requirement in the corporate governance listing standards of the NYSE related to compensation committees.

Director Nomination Policy

Identification of Candidates

The Governance, Nominating and Corporate Responsibility Committee (referred to in this section as the Nominating Committee) has two primary methods for identifying candidates (other than those proposed or nominated by the Company’s shareholder, as discussed below):

This process has routinely resulted in the identification of candidates with diverse qualifications, backgrounds, geography, ethnicity, gender and age who have been re-elected by the majority of shareholders each year. The Nominating Committee ensures the pool of candidates includes female and BIPOC representation.

Shareholders who meet the qualifications outlined below may nominate up to two director candidates for inclusion in the Company’s proxy statement (see Proxy Access Right of Shareholders below). Shareholders who do not meet those qualifications or do not wish to have their director nominees included in the Company’s proxy materials may nominate director candidates and file their own proxy statement to solicit proxies for the election of their director nominees at an annual meeting if they comply with the requirements outlined in the Company’s Bylaws and as generally described below under General Nomination Right of All Shareholders. For more information, see How can I submit a proposal for next year’s annual meeting? in the Questions and Answers section of this Proxy Statement including the deadlines applicable to the submission of director nominations for next year’s Annual Meeting.

Shareholders who wish to propose director candidates for board consideration may do so according to the process outlined in this section under Consideration of Director Candidates Recommended by Shareholders.

The Corporate Secretary will send a copy of the Company’s Bylaws to any interested shareholder upon request. The Company’s Bylaws are also available on the Company’s website at www.alaskaair.com under About Alaska/Investor Relations.

32

In December 2015, the Board amended the Company’s Bylaws to provide a “proxy access” right to shareholders. The Company’s proxy access bylaw is consistent with the prevailing market practice and satisfies the majority of shareholders. Under this proxy access right, a shareholder or a group of up to 20 shareholders owning at least 3% of the Company’s shares continuously for three years may nominate directors constituting up to 20% of the Board, or two nominees, whichever is greater, for election as a director of the Company at an Annual Meeting and inclusion in the Company’s proxy materials. This right is subject to certain conditions, including complying with the notice, information and consent provisions contained in Article II, Section 10 of the Company’s Bylaws. The provisions generally require that written notice of a shareholder’s nomination of one or more persons for election to the Board and inclusion in the Company’s proxy materials be received by the Corporate Secretary of the Company no later than the close of business on the 120th day, and no earlier than the close of business on the 150th day, prior to the first anniversary of the date the Company’s proxy statement was released to shareholders for the previous year’s annual meeting. Other specifics regarding the foregoing proxy access right, including the required content of the notice and certain other eligibility and procedural requirements, are set forth in Article II, Section 10 of the Company’s Bylaws.

Any shareholder of the Company may nominate one or more persons for election as a director of the Company at an Annual Meeting if the shareholder complies with the notice, information and consent provisions contained in Article II, Section 9 of the Company’s Bylaws. The provisions generally require that written notice of a shareholder’s intent to make a nomination for the election of directors be received by the Corporate Secretary of the Company no later than the close of business on the 90th day, and no earlier than the close of business on the 120th day, prior to the first anniversary of the prior year’s annual meeting. The written notice submitted by a shareholder must also satisfy the additional informational requirements set forth in Article II, Section 9 of the Bylaws

The Nominating Committee will evaluate candidates recommended by a single shareholder, or group of shareholders, that have beneficially owned more than 5% of the Company’s outstanding common stock for at least one year and that satisfies the notice, information and consent provisions set forth below (such individual or group is referred to as the Qualified Shareholder).

The Nominating Committee will evaluate candidates recommended by Qualified Shareholder in accordance with the procedures described below.

Qualified Shareholders may propose a candidate for evaluation by the Nominating Committee by delivering a written notice to the Nominating Committee satisfying each of the requirements described below (the Notice). The Notice must be received by the Nominating Committee not less than 120 calendar days before the anniversary of the date that the Company’s proxy statement was released to shareholders in connection with the previous year’s annual meeting. No such notice was received in connection with the Annual Meeting.

Any candidate recommended by a Qualified Shareholders must be independent of the Qualified Shareholders in all respects (i.e., free of any material relationship of a personal, professional, financial or business nature from the nominating shareholder), as determined by the Nominating Committee or by applicable law. Any candidate submitted by a Qualified Shareholder must also meet the definition of an “independent director” under applicable NYSE rules. The Notice shall also contain or be accompanied by the information or documentation described below.

33

The Notice shall be delivered in writing by registered or certified first-class mail, postage prepaid, to the following address:

Board of Directors

Alaska Air Group, Inc.

PO Box 68947

Seattle, WA 98168

The Corporate Secretary will promptly forward the Notice to the Board Chair and to the Chair of the Nominating Committee.

If, based on the Committee’s initial screening of a candidate recommended by a Qualified Shareholder, a candidate continues to be of interest to the Nominating Committee, the Chair of the Committee will request that the CEO interview the candidate, and the candidate will be interviewed by one or more of the other Committee members. If the results of these interviews are favorable, the candidate recommended by a Qualified Shareholder will be evaluated as set forth below. Except as may be required by applicable law, rule or regulation, the Nominating Committee will have no obligation to discuss the outcome of the evaluation process or the reasons for the Nominating Committee’s recommendations with any Qualified Shareholder who made a director candidate recommendation.

The Nominating Committee’s policy on the evaluation of candidates recommended by shareholders who are not Qualified Shareholders is to evaluate such recommendations, and establish procedures for such evaluations, on a case-by-case basis. This policy allows the Nominating Committee to devote an appropriate amount of its own and the Company’s resources to each such recommendation, depending on the nature of the recommendation itself and any supporting materials provided. All candidates (whether identified internally or by a shareholder) who, after evaluation, are then recommended by the

34

Nominating Committee and approved by the Board, will be included in the Company’s recommended slate of director nominees in its proxy statement.

Evaluation of Candidates

As to each recommended candidate that the Nominating Committee believes merits consideration, the Nominating Committee will cause to be assembled information concerning the background, qualifications and appropriate references of the candidate, including information concerning the candidate required to be disclosed in the Company’s proxy statement under the rules of the SEC and any relationship between the candidate and the person or persons recommending the candidate. The Nominating Committee will then (i) determine if the candidate satisfies the qualifications set forth under Policy on Minimum Qualifications for All Directors below; (ii) conduct interviews with the candidate as it deems necessary and appropriate; and (iii) consider the contribution that the candidate can be expected to make to the overall functioning of the Board. The Nominating Committee will then meet to consider and finalize its list of recommended candidates for the Board’s consideration.

The Nominating Committee will consider incumbent candidates based on the same criteria used for candidates recommended by Qualified Shareholder, provided that incumbents will also be considered on the basis of the Nominating Committee’s annual evaluations of the effectiveness of the Board, its committees and their members.

Policy on Minimum Qualifications for All Directors

While there is no formal list of qualifications, the Nominating Committee considers, among other things, the prospective nominee’s relevant experience, intelligence, independence, reputation, diversity, age, commitment, ability to work with the CEO and within the Board culture. The Nominating Committee may also consider a nominee’s CEO experience, senior-level regulatory or legal experience, and relevant senior-level expertise in one or more of the following areas: finance, accounting, sales and marketing, safety, organizational development, information technology, digital marketing, and government and public relations. Different substantive areas may assume greater or lesser significance at particular times, in light of the Board’s present composition and the Nominating Committee’s (or the Board’s) perceptions about future issues and needs.

For a candidate to serve as an independent director, an independent and questioning mindset is critical. The Nominating Committee also considers a prospective candidate’s workload and whether he or she would be able to attend the vast majority of Board meetings, be willing and available to serve on Board committees, and be able to devote the additional time and effort necessary to keep up with Board matters and the rapidly changing environment in which the Company operates.

Board diversity is considered broadly, not merely with regard to race, gender, or national origin, but also with regard to general background, geographical location, and other factors. The consideration of diversity permeates all discussions at the Nominating Committee. In addition, on an annual basis, as part of the Board’s self-evaluation, the Board assesses whether the mix and diversity of board members is appropriate for the Company.

35

Certain Relationships and Related Person Transactions

Policies and Procedures for Approval of Related Person Transactions

The Board of Directors has adopted a written policy for review, approval or ratification of any transaction, arrangement or relationship in which the Company was, is or will be a participant, the aggregate amount involved exceeds $120,000 in any calendar year, and a related person has or will have a direct or indirect material interest (other than solely as a result of being a director or the beneficial owner of less than 10% of another entity). For purposes of the policy, a related person is any person who is, or at any time since the beginning of the last fiscal year was, (i) one of the directors or executive officers or a nominee to become a director, or (ii) any beneficial owner of more than 5% of the Company’s common stock, or any immediate family member of any of these persons.

Under the policy, once such a transaction by a related person has been identified, the Audit Committee (or, for transactions that involve less than $1 million in the aggregate, the chair of the Audit Committee) must review the transaction for approval or ratification. Members of the Audit Committee or the chair of the Audit Committee, as applicable, will review all relevant facts regarding the transaction in determining whether to approve or ratify it, including the extent of the related person’s interest in the transaction, whether the terms are comparable to those generally available in arm’s-length transactions, and whether the transaction is consistent with the best interests of the Company. The related person involved in the transaction will not participate in the approval or ratification process except to provide additional information as requested for the review. Once initially approved or ratified, all transactions with related persons will be reviewed at least annually.

The policy does not require review or approval of the following transactions: employment by the Company of an executive officer unless he or she is an immediate family member of another related person; any compensation paid by the Company to a director; and a transaction in which a related person’s interest arises solely from the ownership of equity securities and all holders of the securities receive the same benefit on a pro-rata basis.

Certain Transactions with Related Persons

The Company and its subsidiaries have transactions in the ordinary course of business with other corporations of which the Company’s executive officers or directors or members of their immediate families are directors, executive officers, or shareholders. The amounts involved in these transactions are below the disclosure thresholds set by the SEC, or the executive officer or director or his or her family member does not have a direct or indirect material interest, as that term is used in SEC rules, in the transaction. Since January 1, 2022, the Company has not participated in, nor is there currently planned, any transactions required to be disclosed pursuant to SEC Regulation S-K Item 404(a).

36

2022 Director Compensation

The following table presents information regarding the compensation paid for 2022 to members of the Board of Directors who were not also the Company’s employees (non-employee directors). The compensation paid to Mr. Minicucci for 2022 is presented in the Summary Compensation Table and the related explanatory tables. As an executive director, Mr. Minicucci did not receive additional compensation for his service on the Board.

Our compensation policy for non-employee directors provides for the director to receive annual cash and stock retainers for their service on the Board. Following a market review by the Compensation and Leadership Development Committee’s independent consultant in 2022, the Board approved an increase in the annual cash retainer to $85,000 and an increase in the annual stock retainer to $120,000, each effective May 5, 2022. The purpose of the increase was to remain at the median of director pay compared to the airline peer group identified in the CD&A. Other changes to compensation for non-employee directors included the following:

Under the terms of the Company’s Stock Deferral Plan for Non-Employee Directors, each eligible director may elect in the prior year to receive his or her annual stock retainer in the form of shares that are fully vested at the time of grant or to defer payment of all or a portion of the award until his or her termination of service on the Board. If no election is made the year prior to payment, the director is issued fully vested shares.

37

Director Stock Ownership Policy

The Company expects directors to act in the Company’s best interests regardless of the number of shares they own. Each non-employee director is expected to hold shares of Company stock having a value equal to at least six times the director’s annual cash retainer, with such ownership to be achieved within six years of joining the Board. Deferred stock units held by directors, which are 100% vested as of the grant date, will count toward the holding requirement even though they will not be issued until the director leaves the Board. All non-employee directors met this requirement as of December 31, 2022.

38

Proposal 2: Approval (on an Advisory Basis) of the Compensation

of the Company’s Named Executive Officers

The Company is providing its shareholders with the opportunity to cast a non-binding, advisory vote on the compensation of the Company’s Named Executive Officers (NEOs) as disclosed pursuant to the SEC’s executive compensation disclosure rules and set forth in this Proxy Statement (including the compensation tables and the narrative discussion accompanying those tables as well as in the Compensation Discussion and Analysis).

As described more fully in the Compensation Discussion and Analysis (CD&A) section of this Proxy Statement, the structure of the Company’s executive compensation program is designed to compensate executives appropriately and competitively and to drive superior performance. For the NEOs, who are primarily responsible for the overall execution of the Company’s strategy, a high percentage of total direct compensation (meaning base salary, actual short-term incentive pay plus the grant date fair value of equity awards as determined for accounting purposes) is variable and tied to the achievement of specified performance goals and/or the value of the Company’ stock. Results of our incentive-based executive compensation programs are linked to performance on the Company’s strategic goals so that executives’ interests are aligned with shareholder interests. Executive compensation is further structured to be internally equitable, to reward executives for responding successfully to business challenges facing the Company, to drive high performance, and to take into consideration the Company’s size relative to its competitors.

The CD&A section of this Proxy Statement describes in more detail the Company’s executive compensation programs and the decisions made by the Compensation and Leadership Development Committee (referred to in this section as the Committee) during 2022. We also discuss the impacts on compensation as a result of the Company taking measures it determined were necessary to preserve the financial stability of the Company for shareholders, employees and the communities we serve during the COVID-19 pandemic, including actions that caused our executives to forego compensation increases for three years in order for the Company to qualify for government payroll support under the CARES Act.

Our 2022 executive compensation program includes three core elements:

Base Salary

In February 2022, the Committee set the annual base salary level for Mr. Minicucci below the 25th percentile of the airline peer group identified in the CD&A. The Committee set base salaries for the other NEOs at or about the 50th percentile of corresponding positions in the same peer group.

Annual Incentive Pay

The NEOs are eligible to earn annual incentive pay under our Performance Based Pay (PBP) Plan, in which all employees participate with the same performance goals. The PBP Plan is intended to motivate all participants to achieve specified Company goals. For 2022, the plan focused on five key areas: returning to profitability after the COVID pandemic, managing costs, reducing carbon emissions, demonstrating our commitment to safety for our employees and guests and leading the industry in pre-tax margin.

Refer to the CD&A for more detailed information on the structure and payout of the PBP.

Long-term Incentive Pay

Equity-based incentive awards that link executive pay to shareholder value generation are an important element of the Company’s executive compensation program and comprise the largest portion of pay for

39

our NEOs. Long-term equity incentives that vest over three- or four-year periods are awarded annually, including performance stock units (PSUs), stock options and restricted stock units (RSUs). Consistent with the equity mix granted in prior years, the NEOs’ 2022 equity grant was approximately 50% PSUs, 25% stock options and 25% RSUs (based on the grant date fair value of the awards). The Committee grants equity awards annually which results in overlapping vesting periods that discourage short-term risk taking and align NEOs’ long-term interests with those of shareholders while helping the Company attract and retain top-performing executives who fit a team-oriented and performance-driven culture.

In general, the Committee sets target annual incentive pay and annual equity grants at levels intended to provide executives an opportunity to achieve total direct compensation at the 50thpercentile of the target total direct compensation (which we define as base salary, target short-term incentive pay, and the grant date fair value of equity awards as determined for accounting purposes) for comparable positions with the peer companies if annual and long-term incentive targets are reached, and to surpass the 50th percentile if those targets are exceeded.

Annual Advisory Say-on-Pay Proposal

In accordance with the requirements of Section 14A of the Exchange Act and the related rules of the SEC, the Board of Directors will request your advisory vote on the following resolution at the Annual Meeting:

RESOLVED, that the compensation paid to the Named Executive Officers, as disclosed in this Proxy Statement pursuant to the SEC’s executive compensation disclosure rules (which disclosure includes the Compensation Discussion and Analysis, the compensation tables and the narrative discussion that accompanies the compensation tables), is hereby approved.

This proposal regarding the compensation paid to the NEOs is advisory only and will not be binding on the Company, the Board or the Committee, nor will it be construed as overruling a decision by the Company, the Board or the Committee or as creating or implying any additional fiduciary duty for the Company, the Board or the Committee. However, the Committee, which is responsible for designing and administering the Company’s executive compensation program, values the opinions expressed by shareholders in their vote on this proposal and will consider the outcome of the vote when making future compensation decisions for the Named Executive Officers.

The Board’s current policy is to provide shareholders with an opportunity to vote on the compensation of the NEOs each year at the Annual Meeting. The Company has included in this Proxy Statement Proposal 3 to approve the frequency of future advisory votes on the compensation of the NEOs and the Board recommends that the current policy of holding such a vote each year be continued. Accordingly, if shareholders approve every one year as the preferred frequency option in Proposal 3, the Company expects the next advisory vote on the compensation of the NEOs will occur at the 2024 Annual Meeting.

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE APPROVAL (ON AN ADVISORY BASIS) OF THE COMPENSATION OF THE NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT PURSUANT TO THE SEC’S EXECUTIVE COMPENSATION DISCLOSURE RULES.

40

Compensation Discussion and Analysis

This CD&A contains a discussion of the material elements of compensation earned by, or awarded to our named executive officers (NEOs) during 2022:

Ben Minicucci, president and chief executive officer (CEO) of Alaska Air Group and Alaska Airlines;

Shane R. Tackett, executive vice president finance and chief financial officer (CFO) of Alaska Air Group and Alaska Airlines;

Andrew R. Harrison, executive vice president and chief commercial officer (CCO) of Alaska Airlines;

Constance E. von Muehlen, executive vice president and chief operating officer (COO) of Alaska Airlines; and

Andrea L. Schneider, senior vice president of people of Alaska Airlines

Consideration of Say-on-Pay Advisory Vote

Shareholders have an opportunity annually to cast an advisory vote in connection with our executive compensation program. At the 2022 annual meeting, 96% of the votes were cast in favor of the advisory say-on-pay proposal in connection with the Company’s 2021 executive compensation. The Committee believes that this voting result indicates that shareholders generally approve of the structure of executive compensation at Alaska Air Group.

Overview: the CARES Act Has Limited Committee’s Ability to Reward and Retain Talent for Three Years

At the outset, the Committee wishes to explain to shareholders how the CARES Act restrictions impacted the Board’s ability to recognize high-performing executives who earned promotions just before and during the pandemic, and who then navigated the Company through these challenges to achieve the highest adjusted pre-tax profit among its peers and top-of-industry operational performance in 2022.

As a condition of receiving funds under the CARES Act, executive compensation for most of our leaders was capped at 2019 levels for three years, from March 2020 until April 2023. The CARES Act prohibited the Company from fully rewarding executives for out-performing our peers in 2022, for executing successfully on many of the Company’s strategic goals since 2020, and for earning promotions and increased job scope before or during the pandemic.

Four of our five NEOs, including our CEO, CFO and COO, received significant promotions before the outset of COVID yet their total compensation remained frozen at their 2019 levels through April 2023. The Board strongly encouraged the Committee and the CEO to retain these and other high-performing executives for the duration of the CARES Act restrictions despite intense competition for talent in the airline industry and in other sectors not subject to compensation caps.

CARES Act Background and Requirements

The pandemic disproportionately affected the airline industry, and, while federal government relief in the form of payroll support grants and loans was a critical and appreciated source of support, the CARES Act restrictions have prevented the Company from offering increased compensation to reward the executives charged with leading the Company through an unprecedented crisis and returning it to profitability and long-term success. To comply with the CARES Act restrictions, the Company has clawed back equity awards from most executives in 2020, 2021 and/or 2022 because the grant date value of these awards, together with the executive’s other compensation, exceeded the executives' 2019 compensation cap.

Our Executives are Paid at 2019 Levels despite Receiving Promotions and Delivering Industry-

41

Leading Financial Performance

By strictly capping executive compensation at 2019 levels for three years, the CARES Act has prevented the Committee from rewarding the heightened responsibilities of the named executive officers who were promoted during or just before the pandemic emerged. Since 2020, all but one of the named executive officers have been entrusted with larger, more complex roles, but at compensation levels associated with their prior roles. For example:

For illustrative purposes, a reconciliation of the Total Compensation for the NEOs from the Summary Compensation Table to the value received after the clawback of equity granted is presented below.

42