Alaska Airlines Issues First Comprehensive Corporate Sustainability Report

Press release:

Alaska Airlines and Horizon Air inflight recycling programs diverted more than 800 tons of inflight waste from landfills last year, including some 230 tons of aluminum and 185 tons of paper.

That’s enough aluminum to build three new airplanes and enough paper to replace 3,100 trees. In addition torecycling more inflight waste, the two airlines have also reduced their carbon emissions by 30 percent per passenger mile since 2004.

These are among several accomplishments highlighted in Alaska Air Group’s newly released 2012 Sustainability Report, which summarizes the company’s progress on environmental, economic and social goals.

“Alaska Airlines and Horizon Air strive to be good airlines for our customers, good places to work for our employees, a good business for our investors and environmental stewards of our planet,” said Brad Tilden, Alaska Air Group’s president and chief executive officer. “Our 2012 Sustainability Report comprehensively documents our corporate social responsibility efforts and provides a platform for collaboration and continued improvement as we seek to lead the airline industry in environmental stewardship.”

Air Group’s Sustainability Report analyzes the airlines’ efforts in 2010 and
2011 and is the company’s first comprehensive report to conform to the Global Reporting Initiative, an international standard for triple bottom line
reporting on performance, people and the planet.

Tilden said the airline chose a holistic approach to measuring and reporting
its sustainability efforts. “Our goal is that this report will help us to
manage our social responsibility performance with the same discipline we manage our financial performance, which will ultimately help us grow both airlines responsibly,” he said.

Key highlights of the report include:

Planet:
· Alaska and Horizon improved their fuel efficiency, resulting in 30 percent less carbon emissions in the environment (measured by flying one passenger one mile). These reductions were accomplished through a variety of measures—key among them migrating to exclusively flying the Boeing 737 and Bombardier Q400, the most fuel-efficient aircraft in their classes.

Alaska Airlines topped the domestic airline industry in fuel efficiency (measured by gallons of fuel burned flying one passenger or one ton of cargo one mile).

· Alaska installed the first airport wind-turbine solar panel in Nome, Alaska.
· The two airlines operated 75 passenger flights powered by a 20 percent biofuel blend in November 2011. These flights demonstrated the viability and need for an adequate, affordable and sustainable supply of alternative aviation fuel. The biofuel project grew out of Alaska Air Group’s involvement in Sustainable Aviation Fuels Northwest, the first U.S. regional group of its kind to study alternative aviation fuels.
· Flight attendants recycled 91 percent of all paper, plastic, aluminum and glass generated onboard Horizon flights and diverted 49 percent of recyclable materials on Alaska flights.

Performance:
Air Group achieved its financial goal of a 10 percent return on invested capital (ROIC) while earning record adjusted profits: $262 million, or 10.7 percent ROIC, in 2010 and $287 million, or 11.7 percent ROIC, in 2011. The company also met its target of growing 4 to 8 percent a year (measured by available seat miles) by expanding 4.7 percent in 2010 and 6.8 percent in 2011.
· Air Group paid its nearly 13,000 employees almost $1 billion annually in wages and benefits, and their success earned them $240 million in bonuses over the last three years (equal to an extra month’s pay for most employees in 2010 and nearly that in 2011).
· FlightStats.com ranked Alaska Airlines No. 1 in on-time performance among major North American carriers in 2010 and 2011.

People:
J.D. Power and Associates ranked Alaska highest in customer satisfaction among traditional network carriers in North America for five years in a row
(2008-2012).
· Alaska Air Group contributed nearly $12.8 million in cash and in-kind
contributions to charitable organizations in 2010 and 2011. This included
$427,000 in matching gifts to charitable donations made by Air Group
employees and money donated to nonprofit organizations recognizing employee volunteer efforts ($10 for every hour of service).
· Air Group spent $208 million with diversity-qualifying suppliers in 2010
and 2011.

Alaska Air Group’s Sustainability Report also provides insights into the
company’s strategic vision, which is founded on the company’s “Five Focus Areas.” A full copy of the report can be obtained at http://bit.ly/RQ2I7T . A graphic summarizing 10 ways Air Group has reduced its environmental impact can be viewed and downloaded at http://bit.ly/QKYVV7

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