Greetings,

ALOHA KONA . . . AND MINNEAPOLIS

By: Melanie Seymour

MEC Communications Chairperson

The most positive news to emerge from Alaska Air Group’s Shareholders meeting held May 20^th at Seattle’s Boeing Museum of Flight was the announcement of new routes to Minneapolis and Kona out of Seattle.

However, due to the out of control fuel costs and lagging economy, CEO Bill Ayer states candidly that most likely we will not have a profitable year. "The whole industry is being overwhelmed," he says, "Financially, it feels a lot like the post 9/11 times." Grim news considering that the government had to implement a one time billion dollar bailout of the airlines post 9/11.

On the positive side, Ayer stated, "We are prepared and positioned to weather the storm." Citing the early retirement of the fuel gouging MD-80s coupled with having a young fleet of 800s as major steps needed to conserve money and oil.

Some other necessary moves include raising prices on tickets and charging for a second checked bag. Alaska will also be increasing fees for kids traveling on unaccompanied minor status and passengers who bring their pets in the cabin.

Gone are such service touches as the customer care packages given to passengers in the boarding area when a flight is excessively delayed and as we’ve recently witnessed, routes that are considered underperforming will be discontinued.

Seriously being considered in the future is charging for ‘premium’ seats, such as aisles, windows and exit rows. Putting together that separated family all seated in middle seats, just got harder.

While these steps seem drastic and harmful to maintaining loyalty from our golds and other frequent travelers, Ayer assures that extensive surveying shows passengers accept these changes (and charges). He indicates that passengers would rather not be charged for incidental items such as food and entertainment on their overall ticket.

Everyone plays monkey see, monkey do in the airline business and passengers seem resigned to this game. Lowering industry standards quickly equates to industry survival. While Ayer says, "We’ve outperformed the industry," he’s quick to add "However, we’re subject to the same market forces as the entire industry."

Ayer acknowledges that these measures are going to put more pressure on our front line employees. Courteous service, on time arrivals, and bags that make it to their correct destination, have become the key to keeping Alaska the premiere flying choice among the traveling public.

The Seattle-Minneapolis service begins October 26^th and the first Seattle-Kona flight will take-off on November 17^th.