Document Sample
Alaska Air Group 2009 Environment Report


                                             Welcome to Alaska Air Group’s 2009
                                             Environment Report. Our goal in
                                             publishing this report is to communicate
 WHO WE ARE                                  openly with employees, customers,
 OUR ENVIRONMENT                             investors, analysts and other key
 LOOKING FORWARD                             stakeholders about our environmental
                                             impact. The hope is that this report
                                             will serve as a foundation for increased
                                             understanding of the challenges asso-
                                             ciated with continued environmental
                                             improvement and aid in the search
                                             for innovative solutions.

Alaska Air Group | 2009 Environment Report                                              2

Alaska Air Group’s first corporate Environment Report is structured around communicating
Alaska Air Group’s commitment to leadership and continuous improvement in environ-
mental performance; openly discussing the key impacts, opportunities, and challenges in
our industry; and describing our performance and initiatives in each of the significant areas
of environmental impact. Within this structure, we also convey the character, values, and
strengths of our people and organizational culture.

We are just beginning the process of assessment and reporting. A major task over the past
two years has been developing appropriate key performance indicators, measurement
processes, and infrastructure for data collection and analysis as a foundation for under-
standing where we are, establishing baseline data, reporting meaningful information, and
developing improvement plans. This report focuses on the environment. The time period
covered by this report is January 1, 2009, to December 31, 2009, for Alaska Air Group’s two
airline carriers: Alaska Airlines and Horizon Air. Where data is available, we describe
environmental impacts for two to six years prior to 2009. We have made every effort to
accurately and fully assess and transparently report all significant environmental impacts and
issues, focusing primarily on those impacts within our direct control. Our determination of
significant issues is based on the knowledge of internal staff experts, common industry
practices, and informal feedback from customers, employees, and other stakeholders. In the
future, we will build more rigorous stakeholder engagement processes to define material
issues, obtain feedback on our progress, and dialogue about critical issues and

Alaska Air Group | 2009 Environment Report                                                      3
EMISSIONS INTENSITY, 2004–2009                                                                                                                                 ALASKA AIRLINES FUEL-REDUCTION EFFORTS, 2006–2009

Alaska Airlines and Horizon Air’s greenhouse gas emissions intensity has decreased steadily                                                                    Over the past four years, Alaska Airlines has invested in more fuel-efficient aircraft and
since 2004. This represents a 23% reduction in CO2e* intensity over the past six years and a                                                                   aerodynamic improvements, instituted fuel-saving procedures, and initiated flying efficiencies
10% reduction in total CO2.                                                                                                                                    that now conserve over 35 million gallons of fuel per year.

                             4.15                                                                           230                                                FUEL REDUCTION OVER FOUR YEARS                                                CONTRIBUTIONS TO FUEL REDUCTION

                                                                                                                    (METRIC TONS CO 2E PER MILLION RPM)
                             4.05                                                                           220                                                                                                                              ●   Fleet Transition Investments

                                                 205.2                                                                                                                               20.5                                                    ●   Weight Reduction Programs
                             3.95                                                                           210                                                                                                                              ●

                                                                                                                              INTENSITY RATIO
                                      3.94                    3.93                                                                                                                   20
                                                                                                                                                                                                                                                 Preconditioned Air (PCA) at Gates
                             3.85                3.86                                                       200                                                                                                                              ●   Required Navigation Performance (RNP) Programs
                                                                                                                                                                                     19.5                                                    ●   Winglets (700, 900)

                                                                                                                                                               GALLONS/1,000 RPM
                             3.75                                                                           190
                                                                          192.2                                                                                                      19                                                      ●   Other (Cost Index Flying, Direct Routes, etc.)

                             3.65                                                                  171.4    180
                                                                                       183.0                                                                                         18.5
                                                                                                                                                                                                                                              73%                                    4%
                             3.55                                                                  3.56     170
                                                                                                                                                                                     18              TOTAL FOUR-YEAR SAVINGS                                                              8%
                             3.45                                                                           160

                                CO2 Equivalent
                                                 2005         2006         2007        2008

                                                        CO2 Metric Tons of CO2 e per Million RPM
                                                                                                   2009           I

* CO2e, or carbon dioxide equivalent, is a measure for describing the impact of a given type of greenhouse gas (GHG).


                                                                                                                                                                                                   140M                                                   FUEL REDUCTION



  Other GHGs, such as methane and nitrous oxide, are expressed in terms of CO2e.                                                                                                                2006       2007        2008           2009

                                                                                                                                                                                          Fuel Reduction          Business as Usual

Horizon Air initiated inflight recycling                                                                                                                        ALASKA AIRLINES INFLIGHT RECYCLING CAPTURE RATE, 2008–2009
efforts in the 1980s. Our flight attendants
                                                                                                              17%                                              Recycling capture rates declined in 2009 after a temporary suspension of the program due to
now collect over 83% of all recyclable
                                                                                                                                                               H1N1 concerns. Improvement is a key priority in 2010.
materials generated during inflight
service. Approximately 70% of all the
                                                                                                RECYCLING                                                                          2008                                                           60%
food and beverage service waste                                                                COLLECTION
generated in the air is recycled on the                                                            RATE

ground. Horizon Air’s inflight recycling                                                                                                                                            2009                                    32%

program diverts an estimated 300 tons of                                                                            ●                      Total Collected
waste from landfills each and every year.                                           83%                              ●                      Total Uncollected                                                      COLLECTION RATE

Alaska Air Group | 2009 Environment Report                                                                                                                                                                                                                                                        4
                                             WE ARE
                                                 Fueled by Jet A,
                                              powered by people

Alaska Air Group | 2009 Environment Report                      5
Fueled by Jet A, powered by people


Message from Bill Ayer, Chairman and CEO          Alaska Airlines and Horizon Air
About Alaska Air Group                            realized long ago that this business
Our Core Values
                                                  is about people more than planes.
Alaska Air Group Corporate Environmental Policy
                                                  Our core values of “Alaska Spirit”
                                                  and “Horizon Heart” embody this
                                                  These corporate values not only
                                                  encompass our direct commitment
                                                  to our customers and employees, but
                                                  they also set Alaska Air Group on
                                                  a path to continually embrace the
                                                  challenges of an ever-changing world,
                                                  including the necessity for continued
                                                  environmental improvements.

Alaska Air Group | 2009 Environment Report                                                6
Who We Are


With our history rooted in the magnificent beauty of Alaska
and the Pacific Northwest, caring for the environment
has always come naturally to us. However, like most
corporations, over the past decade we have gained a deeper
understanding of customers’ and other stakeholders’
increasingly high expectations for environmental
stewardship and corporate responsibility.                                                            BILL AYER
                                                                                                     Chairman and CEO
                                                                                                     Alaska Air Group
The traveling public, corporate customers, investors, employees, communities,
and regulatory bodies all have increasing requirements for transparency and        “Alaska Air Group’s board of
disclosure about environmental impacts. Additionally, these stakeholders
expect evidence of proactive reduction of greenhouse gas emissions, energy
                                                                                    directors, executives and employees
utilization, materials, water resources, and waste.                                 have a shared vision to continually
We aim to meet or exceed these expectations. We also believe there are
                                                                                    strengthen our environmental
significant business benefits and opportunities in optimizing our environmen-         performance and become an
tal performance. Many of these benefits can be shared with customers,                environmental leader in the domestic
improve employees’ work lives, and increase our contribution to the community
and society.
                                                                                    airline industry.”
Alaska Air Group’s board of directors, executives, and employees have a shared
vision to continually strengthen our environmental performance and become
an environmental leader in the domestic airline industry. Our strategic decision
to upgrade Alaska Airlines and Horizon Air’s fleets with newer aircraft, pioneer-
ing use of next-generation flight guidance technology, investment in more
efficient ground systems and vehicles, and programs to reduce excess weight
onboard have made Alaska Airlines and Horizon Air domestic leaders in fuel

Alaska Air Group | 2009 Environment Report                                                                                 7
Who We Are | Message from Bill Ayer, Chairman and CEO

efficiency. These efforts grew at first from grassroots activities and
cost-cutting programs. In 2008, however, Alaska Airlines and Horizon Air
began evaluating our environmental impact and formalizing initiatives
to reduce our footprint.                                                                         BRAD TILDEN,
                                                                                                 President, Alaska Airlines
This report describes the results of those efforts and the major programs at
each airline to address our carbon footprint, aircraft and vehicle emissions,   “There are more and more people that this planet has to
energy use and conservation, resource conservation and recycling, noise          support each year, so it’s imperative that we each have
pollution, and compliance. It represents a commitment to continually assess      as small a footprint as possible. I’m proud of Alaska’s progress
our environmental impacts and performance, and identify areas for improve-       with our very fuel-efficient fleet, our winglets, and with our
ment. And it allows us to communicate our successes, strategy, and challenges    industry-leading flight decks, which allow for the most direct
to customers, employees, and other stakeholders, while providing a structure
                                                                                 routings possible. But there is much more that we can and
for more clearly defining our plans and monitoring our future progress.
                                                                                 should be doing.”
We have a foundation of initiatives and accomplishments that we can be proud
of. Now, we are committed to moving our environmental performance and
corporate responsibility to the next level.

                                                                                                 JEFF PINNEO
                                                                                                 President and CEO, Horizon Air

Bill Ayer                                                                       “‘Horizon Air Country’ is a region of unsurpassed natural beauty,
Chairman and Chief Executive Officer,                                              and we’re committed to treasuring and protecting it. This is
Alaska Air Group                                                                  reflected in our long-term decisions, such as our use of quiet
                                                                                 aircraft with lowest-in-class emissions, as well as in our day-to-
                                                                                 day activities, like our award-winning onboard recycling efforts.
                                                                                 These result in outcomes that current and future generations
                                                                                 will benefit from—something we’re all quite proud of.”

Alaska Air Group | 2009 Environment Report                                                                                                       8
Who We Are


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

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

Alaska Air Group | 2009 Environment Report                                                                                                                                      9
Who We Are


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

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

Alaska Air Group | 2009 Environment Report                                                                                                                            10
Who We Are

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

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

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


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

Alaska Air Group | 2009 Environment Report                                               13
Our Environment

Our goal at Alaska Air Group is to          regarding carbon footprint reductions        SOURCES OF GREENHOUSE GAS EMISSIONS IN THE UNITED STATES
focus our efforts on the most                and increasing investor concerns
important areas of environmental            about financial risks of carbon
                                                                                         Emissions from aviation make up only 2%
impact, where we have the greatest          exposure in corporations they are            of the total greenhouse gas emissions in the
opportunity to effect positive change.       investing in. Additionally, individual       United States. Though this number may appear
Our strategy and vision emphasize           consumers are increasingly concerned         small, we recognize that we can and should
improvements on the two key                 about the negative impacts of climate        continue to limit our impact.
environmental impacts of highest            change and their personal carbon
concern:                                    footprint; and many corporate clients                                        1% 2%
                                            proactively are working to reduce
Carbon Emissions The vast majority
                                            carbon emissions across the entire
(~99%) of carbon dioxide (CO2)
                                            life cycle of their product/service                  25%
emissions generated by our                                                                                                                             34%
                                            delivery, including transportation
operations are from the combustion
                                            of people and goods. This makes
of fossil fuel by our aircraft fleet. To a
                                            reducing greenhouse gas emissions                                             PERCENTAGE OF
lesser extent, emissions are also                                                                                      U.S. GREENHOUSE GAS
                                            a strategic priority for all airlines. CO2                                       EMISSIONS
released through burning of fuel to
                                            emissions can currently be reduced
power our ground support fleet                                                                   5%
                                            in the airline industry by these two
vehicles and provide heating, cooling,
                                            primary methods: modifying or
and lighting in our ground facilities.                                                               6%
                                            changing the aircraft, or flying more
The single greatest challenge for           efficiently. A third method, farther out
                                                                                                               8%                            19%
Alaska Air Group—and the entire             on the horizon, is to use an alternative
airline industry—is that our service        or more carbon-efficient fuel.
                                                                                         ●   Noncommercial Aviation                    ●     Agriculture
relies on burning fossil fuels. This is
in a business context of global and
                                            Materials and Waste A significant             ●   Commercial Aviation                       ●     Commercial
                                            number of supplies are needed to             ●   Electric Utilities                        ●     Residential
national pressures and agreements
                                            serve our combined 24 million
                                                                                         ●   Industry                                  ●     Transportation
                                                                                         Source: U.S. EPA data, 2005

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

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

Alaska Air Group | 2009 Environment Report                                                                                                                           15
Our Environment


Alaska Air Group is committed to          emissions generated in the produc-      Together, Alaska Airlines and Horizon Air have
calculating and reducing its environ-     tion of electricity that we consume.)   steadily reduced the intensity of their carbon
mental impact. As an essential first       The inventory included all emissions
                                                                                  emissions by 23% since 2004.
step in this commitment, Alaska           for which Alaska Air Group has
Airlines and Horizon Air conducted        operational control, including both     ALASKA AIRLINES GREENHOUSE GAS EMISSIONS AND
a greenhouse gas inventory of our         of its wholly owned subsidiaries—       AIR EMISSIONS INTENSITY, 2004–2009
operations for the years 2004–2009.       Alaska Airlines and Horizon Air.                        4.00                                                                 230

                                                                                                                                                                              (METRIC TONS CO 2E PER
                                          Activity data from selected emission

                                                                                                                                                                                 INTENSITY RATIO
Emissions evaluated in the prepara-                                                               3.00                                                                 210

                                                                                  METRIC TONS)

                                                                                                                                                                                  MILLION RPM)
                                                                                  CO 2 (MILLION
                                          sources were compiled by Alaska Air
tion of this footprint include:
                                          Group personnel and evaluated by a                      2.00                                                                 190

• Combustion of jet fuel during           third-party environmental consultant.
                                                                                                  1.00                                                                 170
  aircraft operations.
                                          As demonstrated in the graph at                         0.00                                                                 150
• Ground support vehicle fuel             right, for the past six years, Alaska                            2004        2005    2006      2007       2008        2009                I
  combustion.                             Airlines and Horizon Air have consis-                    Alaska Airlines Emissions      Alaska Airlines Intensity Ratio

                                          tently reduced their carbon intensity
• Electricity usage and heating/          (tons of carbon dioxide per unit        HORIZON AIR GREENHOUSE GAS EMISSIONS AND
  cooling in our leased and owned         of productivity). Although carbon       AIR EMISSIONS INTENSITY, 2004–2009
  buildings.                              intensity decreased by 23%, the                         0.60                                                                 310

                                                                                                                                                                              (METRIC TONS CO 2E PER
                                          total amount of carbon was reduced

                                                                                                                                                                                 INTENSITY RATIO
                                                                                                  0.45                                                                 270

                                                                                  METRIC TONS)

                                                                                                                                                                                  MILLION RPM)
                                                                                  CO 2 (MILLION
Summary of Our                            by 10% from 2004–2009, due to
Assessment Methodology                    increases in air travel demand and                      0.30                                                                 230

                                          operational capacity.                                   0.15                                                                 190
All Scope 1 and Scope 2 emissions
were inventoried for our carbon foot-                                                             0.00                                                                 150
print. (Scope 1 emissions are those                                                                        2004        2005    2006      2007       2008        2009                I
from direct combustion of fossil fuels,                                                            Horizon Air Emissions        Horizon Air Intensity Ratio

and Scope 2 emissions are indirect                                                Emissions were calculated using Tier 2 methodology for the majority (99%) of our emissions—those
                                                                                  from the combustion of jet fuel.

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


Fuel conservation has always been an FUEL EFFICIENCY RELATIVE TO
important goal for Alaska Airlines and
Horizon Air. Not only is it our largest                                         MONITORING FUEL CONSERVATION PROGRAMS

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

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


Alaska Airlines and Horizon Air have invested more                                                                                     Petroleum-based aviation fuels are the    Fleet Transition The Boeing 737-800
than $750 million to replace their aircraft fleets                                                                                      only available fuels in today’s market.   jet and the Bombardier Q400 turbo-
                                                                                                                                       There are numerous research and           prop are the aircraft of our future.
with the most fuel-efficient aircraft available.
                                                                                                                                       development projects under way on         Beginning in 2006 and concluding
ALASKA’S JETS MOST FUEL-EFFICIENT IN OPERATION TODAY                                                                                   alternate sources of aviation fuels.      in 2008, Alaska Airlines replaced its
                                                                                                                                       However, there are currently no alter-    fleet of MD-80 aircraft with more

                            18                                                                                              16.49

                                                                                                                 15.36                 natives to petroleum-based fuels and      fuel-efficient Boeing Next-Generation
                            15                                                                        13.12
                                                                                 12.63     12.75
                                                11.16     11.65
                                                                     12.38                                                             none are expected to be commercially      737s. As a result of its fuselage,
                            12       10.76
                                                                                                                                       viable in the near future. The lowest-    wing, and engine design, the 737-800
                                                                                                                                       hanging (but most expensive) fruit        and 737-900 are two of the most
                                                                                                                                       in terms of reducing fuel use and         fuel-efficient jet aircraft available,
                                    737-900 737-800        A320      737-200 737-700 737-400           A319      MD-80 DC-9 140        subsequent emissions is to simply         consuming 18% less fuel compared
                                    172 SEATS 157 SEATS 149 SEATS 182 SEATS 124 SEATS 144 SEATS 122 SEATS 140 SEATS 125 SEATS
                                                                                                                                       buy fuel-efficient aircraft. Other          to an MD-80. This results in an
                                 Jets used by Alaska Airlines                Other comparable jets
                                                                                                                                       opportunities include modifying the       improved fuel efficiency of hundreds
                                                                                                                                       aircraft to increase aerodynamics and     of gallons per flight hour. As of
OPERATION TODAY                                                                                                                        fuel efficiency and decreasing the          December 2009, Alaska Airlines’ all-
                                                                                                                                       weight of aircraft equipment.             737 fleet consists of 51 737-800s and


                                                                                                                             10.6                                                12 737-900s, 55% of the fleet. Transi-
                                                                                                                                       THE SUCCESSES
                                                                                                                                                                                 tioning from MD-80s has resulted
                                                                                  7.1        7.2        7.3                            At Alaska Airlines and Horizon Air        in an annual fuel savings of approxi-
                                                 5.8        6.2
                                         6                                                                                             we’ve changed our fleet inventory and      mately 22 million gallons per year.
                                                                                                                                       modified aerodynamic components
                                                Q-400     CRJ900      E190      CRJ700      Q200      CRJ200      E170      B1900
                                                                                                                                       to increase fuel efficiency.
                                               76 SEATS   88 SEATS   99 SEATS   70 SEATS   37 SEATS   50 SEATS   72 SEATS   19 SEATS

                                 Aircraft used by Horizon Air                Other comparable aircraft

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

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

At Horizon Air, we are transitioning      retrofitted all of our eligible 737-700s    Through Alaska Airlines and Horizon Air’s
from a combined fleet to an all-Q400       and 737-900s. That translates into         investments in modern and efficient aircraft fleets
fleet. Our current fleet consists of        approximately 100,000 fewer gallons
Bombardier CRJ700 regional jets and
                                                                                     and aerodynamic upgrades, such as winglets, we
                                          of fuel consumed per aircraft each
Q400 turboprops. The 76-seat Q400 is      year. We estimate the total fuel savings
                                                                                     save over 30 million gallons of fuel per year.
30% to 40% more fuel-efficient than a       from winglets to be 2.2 million gallons
comparable jet. Horizon Air originally    in 2009.
announced our fleet transition in April
2008. However, due to the recession,      Weight Reduction Each pound flown
we renegotiated the purchase schedule     has a cost in terms of fuel usage. To
for the new Bombardier Q400. The          reduce fuel consumption, we’ve put
remaining 18 Bombardier 70-seat           our fleet on a weight-loss program.
CRJ-700 jets are expected to be           Examples of Alaska Airlines’ weight-
phased out by the end of 2012.            reduction efforts include using lighter
                                          catering carts, removing bilge insu-
Winglets To further improve the
                                          lation blankets, and reducing the
aerodynamics of our aircraft, Alaska
                                          amount of potable water that is
Airlines is using winglets (turned-up
                                          boarded on each flight.
extensions at the tips of the wings) to
increase fuel efficiency by 3% to 5%.
All of our 737-800 aircraft come
equipped with winglets, and we have                                                  Above: Flying on a Horizon Air Bombardier Q400 turboprop, affectionately known
                                                                                     as a “Green Machine,” is roughly equivalent to driving in a car that gets 64 miles
                                                                                     per gallon. A Q400 is 30% to 40% more efficient than a comparable-sized jet.
                                                                                     Below: Alaska Airlines is using winglets, like the one shown here, to further increase
                                                                                     aircraft fuel efficiency by 3% to 5%. That translates into approximately 100,000 fewer
                                                                                     gallons of fuel consumed per aircraft each year.

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


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

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

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

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

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

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

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

                                                                                                                          EMISSION REDUCTION:
                                                                                                                          22,400 Metric Tons (≈ 4,100 Cars)

                                                                                                                          NOISE EXPOSURE REDUCTION:
                                                                                                                          ≈ 750,000 People

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


Alternative jet fuels represent an           Alaska Air Group made recent headlines based on our support of alternative
opportunity for the future. There            fuels and our participation in related projects.
are exciting initial successes in the
development of alternative, less-
carbon-intense jet fuels. Alaska Air          ALASKA AIRLINES JOINS                          ALTAIR FUELS AND
Group is participating in various
projects to support the development,          BOEING’S BIOFUEL GROUP                         14 AIRLINES SIGN
                                                                                             14 AIRLINES SIGN
testing, and commercialization of                                                            BIOFUEL MOU
alternative fuels. Through our mem-
bership with organizations such as
the Sustainable Aviation Fuel Users
Group, of which we are currently
the only domestic airline participating       Puget Sound Business Journal | July 13, 2009   Flightglobal | December 15, 2009

member, we have pledged to consider
fuels that minimize biodiversity              WORLD’S LARGEST                                ALASKA AIRLINES JOINS
impacts; require minimum land,                AIRLINES COMMIT TO USE                         SUSTAINABLE AVIATION
water, and energy to produce; and
don’t compete with food or freshwater         BIOFUEL IN JETS                                FUEL USERS GROUP
resources. We are committed to
driving sustainability practices into
the global fuel supply chain. At this
time, however, the technology and             Earth & Industry | January 6, 2010             Biofuels Digest | July 14, 2009
capacity have not been adequately
developed for biofuels to fully
substitute for fossil fuels.

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


The remaining 1% of our carbon              infrastructure is available to support
emissions comes from two sources:           its growing fleet of electric GSE. As of
fuel burned by our fleet of ground           January 1, 2010, over 65% of Horizon          WORK-FROM-HOME PROGRAM
support equipment (GSE) vehicles            Air’s station-based ground support            Approximately 45% of Alaska Airlines reservations agents and 75% of
and consumption of fuel and electricity     vehicle fleet consists of electric             Horizon Air reservations agents participate in a work-from-home program.
to heat, cool, and light our buildings.     vehicles. At Alaska Airlines, the GSE         This eliminates the need for these employees to drive to work and removes
                                            fleet is approximately 10% electric.           more than 300 cars from our local roadways each day.
Ground Support Equipment Our GSE
                                            Many of the airports where Alaska
consists of forklifts, automobiles, and
                                            Airlines operates do not currently
aircraft service vehicles, such as bag-
                                            have the capacity to recharge large
gage tugs and belt loaders. GSE are                                                   cleaner-burning propane units or         GROUND SUPPORT VEHICLE
                                            fleets of electric vehicles. And at many
typically powered by petroleum-based                                                  hybrid GSE. In August 2009, we were      POWER SOURCE
                                            of Alaska Airlines’ airports, we do
fuels and therefore contribute to our                                                 one of eight airlines that signed an

                                            not manage any GSE at all; they are
overall carbon footprint. Over the years,                                             agreement to buy renewable synthetic
                                            owned and operated by contracted
both Alaska Airlines and Horizon Air                                                  diesel vehicle fuel at Los Angeles
                                            ground service providers. Alaska
have initiated a variety of programs to                                               International Airport. This deal will
                                            Airlines has been testing and evalu-
move away from fossil-fuel-powered                                                    provide our contractor’s vehicle fleet
                                            ating electric vehicles for our largest
GSE and explore cleaner alternatives.                                                 with biodiesel beginning in 2012.
                                            operation in Seattle, Washington.
                                                                                      This biodiesel will boast a carbon       of Horizon Air’s vehicles are electric
Electric Vehicles We are currently          We look forward to working with the
                                                                                      footprint of almost zero and will also
                                            Port of Seattle as it upgrades airport

replacing fuel-burning vehicles with                                                  greatly reduce particulates and sulfur
electric equipment where it makes           infrastructure to accommodate the
                                                                                      emitted by GSE.
economic, safety, and compliance            placement of vehicle recharging
sense. Horizon Air’s strategy has           stations over the next three years.
been to methodically convert our
                                            Alternative Fuels in Vehicles Over the
vehicle fleet, wherever practical,                                                                                              of Alaska Airlines’ vehicles are electric
                                            past three years, Alaska Airlines has
from fuel-powered to electric. A large
                                            converted or replaced a portion of
proportion of Horizon Air’s vehicle
                                            our gasoline-powered GSE fleet with
fleet is located at airports where the

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


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

Alaska Air Group | 2009 Environment Report                                                                                                                                26
Our Environment


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

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

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


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

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

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

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

                                          Another challenge remains in improv-
                                          ing the percentage of collected material
“Our inflight recycling                    that is, in fact, recycled by our catering       HOW DO WE MEASURE OUR WASTE?

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

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


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

Alaska Air Group | 2009 Environment Report                                                                                                                                     31
Our Environment


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

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

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

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

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


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

Alaska Air Group | 2009 Environment Report                                               35
Looking Forward

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

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

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

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

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

 IMPACT AREA                             PROJECT NAME   DESCRIPTION

Reduce emissions from fossil fuel        Fly more       Greener Skies Obtain FAA approval to fly Required Navigation Performance procedures, being
consumption                              efficiently      designed under the Seattle Greener Skies project, at least during low-traffic periods, in 2011.
                                                        This project represents a partnership between Alaska Airlines/Horizon Air, the Port of Seattle, the
                                                        FAA, and The Boeing Company. The purpose of the project is to bring quieter, more fuel-efficient
                                                        approach paths to Seattle-Tacoma International Airport, saving equipped airlines more than
                                                        2 million gallons of fuel and 22,400 metric tons of CO2 annually, as well as reducing noise exposure
                                                        for hundreds of thousands of people in the Puget Sound region. ALASKA AIRLINES | HORIZON AIR

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

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

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

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

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

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

 IMPACT AREA                             PROJECT NAME            DESCRIPTION

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

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

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

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

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

Alaska Air Group | 2009 Environment Report                                                                                                                               38
Looking Forward


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

Alaska Air Group | 2009 Environment Report                                           39

                                             We greatly appreciate your comments
                                             and suggestions regarding this report.
                                             Please contact us at

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

Alaska Air Group | 2009 Environment Report                                                                       40