#1224 3Q 2018 Investor Presentation Alaska Air Group Alaska#2Safe harbor This presentation may contain forward-looking statements subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These statements relate to future events and involve known and unknown risks and uncertainties that may cause actual outcomes to be materially different from those indicated by any forward-looking statements. For a comprehensive discussion of potential risk factors, see Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2017, as well as in other documents filed by the Company with the SEC after the date thereof. Some of these risks include competition, labor costs and relations, general economic conditions, increases in operating costs including fuel, inability to meet cost reduction goals, seasonal fluctuations in our financial results, an aircraft accident, changes in laws and regulations and risks inherent in the achievement of anticipated synergies and the timing thereof in connection with the acquisition of Virgin America. All of the forward-looking statements are qualified in their entirety by reference to the risk factors discussed therein. We operate in a continually changing business environment, and new risk factors emerge from time to time. Management cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on our business or events described in any forward-looking statements. We expressly disclaim any obligation to publicly update or revise any forward-looking statements after the date of this report to conform them to actual results. Over time, our actual results, performance or achievements will likely differ from the anticipated results, performance or achievements that are expressed or implied by our forward-looking statements, and such differences might be significant and materially adverse.#3Our Vision and Strategy 3#4ALASKA Lihue. We have a long track record of successful growth Anchorage Honolulu Maui HAWAI'I Kona Vancouver CANADA Seattle Portland San Francisco/ Bay Area Salt Lake City Las Vegas Los Angeles Area San Diego Phoenix 63 destinations North-South orientation along West Coast Denver Minneapolis/ Saint Paul Boston Milwaukee Chicago Omaha Detroit Newark New York ⚫ Philadelphia Washington, D.C. Baltimore Indianapolis Colorado Springs Kansas City St. Louis Anchorage LASKA *Wichita Raleigh/Durham Nashville Oklahoma City Atlanta -Charleston Dallas Austin New Orleans • Orlando San Antonio Houston Intercontinental Tampa Fort Lauderdale Lihue Los Cabos MEXICO Guadalajara Cancun •Mexico City' Ixtapa/Zihuatanejo 2001 ⚫ Havana Liberia ⚫ San José COSTA RICA Honolulu Maui Kona HAWAI'I Vancouver Seattle Portland CANADA San Francisco/ Bay Area www City Chicago Salt Lake Denver Omaha Minneapolis/ Saint Paul Milwaukee Boston Detroit Newark New York Philadelphia Washington, D.C. Baltimore Indianapolis Las Vegas Colorado Springs Kansas City St. Louis Wichita Los Angeles Area Raleigh/Durham Nashville San Diego Oklahoma City Atlanta Phoenix Charleston Dallas Austin New Orleans Orlando San Antonio Houston Intercontinental Tampa Fort Lauderdale 115+ destinations National orientation with West Coast focus Los Cabos MEXICO Guadalajara Mexico City Ixtapa/Zihuatanejo 2018 Cancun Havana Liberia COSTA RICA San José 4#5Our core values drive everything we do A ནཊྛ Own Do the Be Deliver safety right thing kind hearted performance Be remarkable LO#6Alaska is a low-cost airline offering fares substantially below the legacy carriers $261 $236 $224 $171 $150 $107 Alaska. jetBlue Source: U.S. Department of Transportation, 12 months ending 1Q 2018, West Coast Origins to North American Destinations, Stage-Length Adjusted CO 6#7Meanwhile, our customer proposition is differentiated among LCCs and centered on guest loyalty Contemporary look and feel to the cabin 41" First Class Seat 35" Premium Class Seat New First and Premium Class Seats Satellite Connectivity (rolling-out through 1Q 2020) Free Movies and Chat Fresh, Regional Food Reimagined Lounges & Beverage Offerings BEST TRAVEL REWARDS & WORLD REPORT US News AIRLINES 2018-2019 Industry-Leading Loyalty Program 7#8Our market positioning is distinctive on the West Coast Alaska. AIRLINES ○ = West Coast seat share Customer Experience* *includes customer service quality, pre- and in-flight amenities, upgrade frequency, loyalty benefits, etc. Affordable Fares Fares from U.S. Department of Transportation; seat share reflects U.S. West Coast-originating flights to N. American destinations jetBlue spirit 8#9Integrating Our Airlines 9#10(Number of months from deal close) Alaska Virgin America Since deal close, we have completed major integration milestones faster than other recent airline mergers Key milestone schedule UNITED Continental Airlines ▲ Delta SOUTHWEST nwa AirTran AA AmericanAirlines U'S AIRWAYS Single Passenger Service System (PSS) 16 months 1st 16 months 17 months 43 months 22 months Single website 16 months 1st 16 months 17 months 42 months 22 months Full codeshare Frequent Flyer Program (FFP) integration At close 1st 2 months 11 months n/a 3 months 13 months 2nd 12 months 17 months 42 months 15 months Single Operating Certificate 13 months 2nd 15 months 13 months 10 months 16 months Single operations center (OCC) 15 months 3rd 6 months 12 months n/a n/a Note: *Status match for Elevate members into Mileage Plan at 1 month; AS elites recognized on VX metal at 8 months; full elite benefits reciprocity at PSS (~16 months); all figures +/- 1 month due to rounding 10#1190%+ of integration milestones will be complete by the end of 2018 Integration Cumulative Milestone Completion (2016-2020) Percent Important milestones remain in 2019 100% 90% Initial Cross-Fleeting 80% 70% Single PSS - April 2018 • 60% Co-located System Operations 50% Single Operating Certificate from FAA 40% Single Loyalty Program Back Office Integration 30% 20% Revenue Management Alignment Integrated crew scheduling • Fully deployed cross-fleeting • Airbus fleet modifications 10% Investments in Culture 0% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2016 2017 2018 2019 2020 11#12Our PSS transition in April 2018 unlocked our ability to capture revenue synergies All ticketing shifted to Alaska systems and 29 airports converted to a single brand on April 25... 2 Alaska Virgin America america Alaska April 25th April 24th Alaska A single PSS makes revenue synergy capture possible, beginning in late 2018 Annual synergies (revenue & cost) expected from Virgin America integration $300M $255M $195M ווה. Alaska Alaska $65M $36M ...with zero disruption to our operation 2017 2018 2019 2020 2021 Synergy capture remains on-track vis-à-vis our expectations at the time of the acquisition 12#13deli Our West Coast Network 内田 13#14Virgin America gave us expanded reach, and we added ~40 new routes to Virgin's foundation last year ANCHORAGE SEATTLE PORTLAND -> SAN FRANCISCO BAY AREA LOS ANGELES AREA Lihue Honolulu Maui Konal Vancouver Vancouver SEATTLE PORTLAND Minneapolis Salt Lake City Milwaukee Omaha Chicago Boston Newark Detroit SAN FRANCISCO Denver Kansas City Indianapolls New York Philadelphia Baltimore Washington DC ANCHORAGE BAY AREA as Vegas LOS ANGELES AREA SAN DIEGO Witchita St. Louis Oklahoma City Raleigh/Durham Nashville Atlanta Charleston Omaha Salt Lake City Denver Kansas City Indianapolis Minneapolis Boston ANCHORAGE Milwaukee Newark Detroit New York Chicago Philadelphia Baltimore Washington DC Vegas Witchita Oklahoma City St. Louis Raleigh/Durham Nashville Atlanta Charleston Dallas Austin San Antonio Houston New Orleans Tampa Orlando Lihue Fort Lauderdale Honolulu Maui Kona SAN DIEGO Phoenix Los Cabos Mexico City Guadalajara Cancun Ixtapa/Zihuatanejo Liberia San Jose Pre-deal Alaska network: ~240 routes Vancouver SEATTLE S PORTLAND SAN FRANCISCO BAY AREA LOS ANGELES AREA SAN DIEGO Dallas Austin San Antonio Houston New Orleans Tampa Lihue Orlando Fort Lauderdale Honolulu Maui Kona Los Cabos Mexico City Guadalajara Cancun Ixtapa/Zihuatanejo Liberia San Jose Post-deal network including Virgin: ~280 routes Minneapolis Milwaukee Detroit Chicago Salt Lake City Omaha Las Vegas Denver Kansas City Indianapolis Boston Newark New York Philadelphia Baltimore Washington DC Raleigh/Durham Phoenix Witchita St Louis Oklahoma City Nashville Atlanta Charleston Dallas Austin San Antonio Houston New Orleans Tampa Orlando Fort Lauderdale Los Cabos Mexico City Guadalajara Cancun Ixtapa/Zihuatanejo Liberia San Jose Combined Networks + New Markets: ~320 routes In 2018, Alaska operates a national network serving 115+ destinations from seven hubs along the U.S. West Coast 14#15Our network is more diverse geographically since the merger 2013 Network Composition 2018 Network Composition 12% 13% ■ Other ■ Other 3% -4% 10% 12% Midcon/ 2% East Coast 8% Midcon/ East Coast 15% HI HI 25% AK AK CA CA 54% 42% PNW PNW ~825 Departures Per Day ~1,200 Departures Per Day 15#16Seven West Coast cities anchor our route network today Alaska maintains a significant leadership position in the Pacific Northwest Alaska holds the #2 position at most hubs in California, a solid platform for future growth SFO Domestic Seat Share ANC Domestic Seat Share Anchorage, AK ~45 ALK Daily Departures 65% Pop. ~4x PNW ~90 ALK Daily Departures 50% 16% 9% 12% United Alaska. American 10% Alaska. Ravn Delta SEA Domestic Seat Share 54% ~40 ALK Daily Departures SJC Domestic Seat Share 45% 21% 12% San Francisco Seattle, WA Southwest Alaska. Delta ~300 ALK Daily Departures 24% San Jose LAX Domestic Seat Share 6% Alaska Delta Southwest ~80 ALK Daily Departures ALK ranks #5 with 10% share in this strategic and fragmented market PDX Domestic Seat Share Los Angeles Portland, OR 45% ~130 ALK Daily Departures San Diego 19% 12% ~45 ALK Daily Departures Alaska Southwest Delta SAN Domestic Seat Share 40% 14% 13% Southwest Alaska. American 16#17We now offer the most seats and the highest relevance for West Coast passengers West Coast Seat Share 24% 23% Alaska. 17% 13% 11% West Coast Relevance 48% 41% 36% 32% 27% #1 Guest Relevance on the West Coast Alaska. Data reflects year-end 2018 schedules 1. U.S. West Coast-originating flights to North American destinations 2. Percent of West Coast to North America passengers served on a nonstop basis 17#18Our 15 global partners extend our network to more than 900 destinations around the world Alaska GLOBAL PARTNERS KOREAN AIR 海南航空 HAINAN AIRLINES SINGAPORE AIRLINES JAL CATHAY PACIFIC ICELANDAIR FINNAIR BRITISH AIRWAYS ***Condor Aer Lingus Emirates LATAM AIRLINES Intl Partners SEA SFO LAX Partners 6 Departures 7 12 12 15 25 Intl Enplanements 2.4M 6.4M 12.0M QANTAS OFIJI AIRWAYS Single PSS system connects our global partner network to our new CA hubs * International enplanement figures are YE Aug 2017 totals published by airports 18#19ETOPS 493-900ER MORE TO LOVE 00000000000000000 000 N493AS ככככככככפ ם ננננננננ פ כ כ כקלככט נ כככככ Alaska+vignamerica Our Customer Proposition KF1BF1→ 19#20Our value proposition, while multi-faceted, centers around building long-term relationships with our guests Thoughtful offerings, efficiently delivered Greater cabin segmentation than other LCCS: • First Class . Main Cabin Premium Class Saver Fare (2019) Alaska Differentiated Guest Relevant Route Network Products Leading Loyalty Expanded Program Low Fares Guest Choice Highest Passenger Relevance on the West Coast Average fares substantially lower than legacy carriers Award-Winning Reliability & Service 11 consecutive JD Power awards for Highest in Customer Satisfaction 20#21Low fares, great service and range of cabin options are the foundation of our offering Lower fares than legacy carriers Stage-Length Adjusted Average Fares $107 $171 $150 Alaska. jetBlue $261 $236 $224 Award-Winning Reliability & Service 107 LDPOWER ALASKA #1 Traditional Carrier, 11 years in a row in JP Power Annual Customer Satisfaction Study U.S. Department of Transportation, 12 months ending 1Q 2018, West Coast Origins to North American Destinations Multiple cabin options for guests D C D E T 19 H " First Class competitive, high-service offering with an opportunity to upgrade elites Premium Class caters to leisure travelers willing to pay more for extra pitch and premium food/beverage 心 44 1 20 + 113 24 X X X X X X 26 57 09 30 39 XXX = *1* Main Cabin classic LCC offering including seat assignments, cost-efficient entertainment, and thoughtful food/beverage for purchase Saver Fare (2019) offers guests additional choice, especially those seeking the lowest fare in exchange for less ticket flexibility and fewer perks Seat map is conceptual to show segmentation; seat count and segment distribution varies by flight 21#22Guest products will be aligned and upgraded across our fleet over the next 18 months wiftyslacka Satellite WiFi on first aircraft (full fleet roll-out by 1Q 2020) Upgraded food & beverage program on all aircraft Designer uniform and upgraded cabin experience roll-out 2018 2019 2020 & Beyond Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Ongoing product & customer experience innovation New JFK Airport Lounge First Airbus with renovated cabin (full roll-out by 1Q 2020) New SEA Terminal and Lounge Our low-cost approach requires each product area to stand on its own from a P&L perspective 22#23Our loyalty platform is the best in the industry and offers the most generous benefits Mileage Plan TM Miles for miles • Low redemption prices Fastest path to elite Earn & redeem miles on Credit Card Alaska Top Loyalty Program Annual Fee AIRLINES BEST TRAVEL REWARDS US.News & WORLD REPORT AIRLINES 2018-2019 ▲ DELTA American Airlines UNITED Southwest❤ $75 $69-$99 Companion Certificate $99 Global Partners Complimentary Upgrades for elites Miles on Airline Spend 3X 2X 23 23#24Our Mileage Plan & affinity card programs build high-value guest relationships Confirmation Trips + San Francisco, CA > Confirmation Seattle, WA Mileage Plan Members: 4X more revenue 65% more likely to book direct 30% have a credit card Mileage Plan Alaska 4264 1234 CHRIS LAR 24#25Loyalty program growth far exceeds passenger growth... Mileage Plan Membership 17% CAGR 2013 2018F 12% CAGR 2013 Affinity Cardholders Growth outpaces system average in California 2018F 25#261. ...and continues to drive growth in revenues and cash flows Mileage Plan revenues continue to grow rapidly... ...and our card programs generate substantial cash flow Total Mileage Plan Revenues, $ millions 17% CAGR ~1 billion 862 722 581 541 464 2013 1 2014 2015 2016 2017 2018F % of 9% 10% 11% 12% 11% 13% Total Rev 1H 2018 annualized run-rate Alaska. Mileage Plan 4000 1234 5678 9123 CHRIS L MARTIN 1234 00/00 VISA Signature ~$1 billion in cash flows from card programs in 2017 26#27Our Cost and Operations Advantage Alaska 27#28Our efficient cost structure is a competitive advantage Stage-Length Adjusted Total CASM1 13.39 C 12.84 C 12.97 C 11.77 C 11.03 C 10.17 C 8.89 C 7.77 C spirit airlines. allegiant Alaska. jetBlue 1. Trailing 12-Months Ended 6/30/18 2. U.S. West Coast-originating flights to North American destinations 28#29Our low costs are underpinned by industry-leading operations On-time performance led the industry for 7 years prior to the integration, and we have regained our advantage in 2018 Completion rate has also been strong for many years relative to competitors 87.0% 87.3% 86.1% 86.4% 99.5% 99.5% 99.5% 99.4% 83.3% 79.1% 99.2% 79.7% 79.1% 78.3% 76.6% 76.4% 76.4% 98.8% 98.7% 98.6% 99.0% 99.1% 98.2% 98.1% 2013 2014 2015 2016 1 2017 2018 YTD 2013 1 2014 ALK -Industry 2 2015 ALK 2016 2017 2018 YTD -Industry 2 12 1. 2017 is Alaska + Virgin America 2. "Industry" includes AAL, DAL, UAL, LUV, JBLU, SAVE 29 29#30A young, fuel-efficient fleet also supports a low cost structure Mainline Fuel Efficiency Average Fleet Age ASMs per gallon, Trailing 12 Months Years 87.7 81.3 76.1 75.9 72.9 71.3 70.5 68.3 65.1 Spirit Alaska. Allegiant Southwest Hawaiian United JetBlue American Delta Data as of 6/30/18 5.6 10.6 10.8 10.1 9.8 8.0 16.6 16.4 14.8 Spirit Alaska Jetblue Hawaiian American Southwest United Delta Allegiant Data as of August 2018 30 50#31Our relative cost advantage remains substantial despite marking our pilot pay scales to market in 2018 9.16¢ ALK Total CASM excluding Fuel 10.82¢ 10.69¢ 8.50¢-8.53¢ Stage-Length Adjusted CASMx - ALK vs. Legacies ALK Legacy Carriers ALK 18% ✓ advantage ALK 20% advantage I I I I I I 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018F 2012 2013 2014 2015 2016 2017 2018F ALK CASMX ALK at Industry CASMX Growth ALK at LCC CASMX Growth 31#32Underlying CASMx guidance is down for 2018, adjusting for the unique headwinds and tailwinds we face this year 3.5% initial guidance 2018 CASMx Guidance – Key Drivers 3.2% -2.9% Latest CASMX Guidance Labor Deals (Pilots + FAs) -0.5% MCPH Deal -1.2% -0.4% 1.0% Impact of Regional Mix 2017 Ops Issues Tailwind Underlying 2018 CASMx 2018 CASMx guidance has declined 30 bps versus initial guidance despite 40 bps lower ASM growth 32 32#33க 8T 880 St N563AS www Growth & Capital Deployment Outlook 33#34As we complete the integration, we are slowing our investment in growth to focus on pre-tax margin improvement Capital Spending Plan 2019-2020 Margin Drivers ASM Growth $1.0B ~$1.0B ~$750M -$750M • Network & schedule refinements Merger synergies Saver Fare roll-out Ancillary revenue changes Labor productivity improvements 2017 2018 F 2019F 2020F • Overhead cost control ~7% -6% ~2% ~4% Slower near-term growth will enable us to realize synergies, optimize our operation, and implement revenue initiatives 34#35In addition to synergy capture, we are targeting $150M from revenue initiatives next year Saver Fare will offer more choice to our guests, and some will choose to buy up into our Main Cabin product Alaska AIRLINES ▲ DELTA American Airlines UNITED We are also implementing a series of accretive revenue management changes beginning in 2H18 Seat Assignment Carry-On Bag ✓ 2 of 3 competitors Ability to Change / Cancel × × Rewards Accrual Mileage- based Spend- based $100M annual run-rate by 2019 سرا Offering Exit Rows for sale Better managing revenue post-sale Demand-based pricing for Premium Class Eliminating fee waivers for ticket changes outside of 60 days $50M annual run-rate by 2019 ($20M in 2H18) 55 35#36Our balance sheet is improving, and we will leverage lower capital spending in 2019-2020 to reduce debt further Alaska Air Group Debt-to-Cap (%) 81% 67% 54% 27% Merger Year 59% 2008 2010 2012 2015 2016 Target * 53% 50% <45% 2017 *51% before adoption of new accounting standards 2018F 2020 Our leverage target is consistent with other high-quality industrials 36#37Our leverage remains one of the lowest in the industry 103% Long-Term Debt to Cap % Quarter Ended 6/30/18 67% 64% 62% 61% 52% 47% 30% 29% spirit airlines allegiant Alaska jetBlue 37#38Our commitment to growing the dividend and returning capital to shareholders displays our confidence in the business Annual Dividend Spend $28 ~$158 $148 $136 $102 $68 2015 2016 2017 2018F 2013 In millions, except per share values 2014 Dividend initiated in August 2013; spend subject to Board approval Increased dividend each year since inception 220% ► 32.0¢ 10.0¢ 2013 2018 We also plan to repurchase $50M in stock in 2018 38#39The integration will be more than 90% complete by the end of 2018 We now offer the highest passenger relevance on the West Coast 224 Our loyalty-centered customer proposition continues to improve Margin improvement is our #1 priority in 2019-2020 We are committed to balanced capital deployment and returning excess capital to shareholders 39 39