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UNITED STATES
SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, DC 20549

FORM 10-Q

(Mark One)

|ý                                              | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 
|---------------------------------------------- | ----------------------------------------------------------------------------------------
|For the quarterly period ended March 31, 2002.
|OR                                            
|o                                              | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  to
.

Commission file number 1-8957

ALASKA AIRLINES, INC.(Exact name of registrant as specified in its charter)

|Alaska(State or other jurisdiction of incorporation or organization) |  | 92-0009235(I.R.S. Employer Identification No.)
|-------------------------------------------------------------------- |  | ----------------------------------------------

19300 Pacific Highway South, Seattle, Washington 98188(Address of principal executive offices)

Registrant's
telephone number, including area code:(206) 431-7079

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes ý No o

APPLICABLE
ONLY TO CORPORATE ISSUERS:

Indicate
the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

The
registrant has 500 common shares, par value $1.00, outstanding at March 31, 2002.

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1

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PART I. FINANCIAL STATEMENTS

ITEM 1. Financial Statements

BALANCE SHEETS (unaudited)  Alaska Airlines, Inc.

|                                               |  | December 31,
2001 |         | March 31,
2002
|---------------------------------------------- |  | ----------------- | ------- | --------------
|
|ASSETS                                         |  |                   |         |               
|Current Assets                                 |  |                   |         |               
|Cash and cash equivalents                      |  | $                 | 490.2   |               
|Marketable securities                          |  |                   | 170.4   |               
|Receivables from related companies             |  |                   | 71.2    |               
|Receivablesnet                                |  |                   | 67.0    |               
|Inventories and suppliesnet                   |  |                   | 37.8    |               
|Prepaid expenses and other assets              |  |                   | 68.1    |               
|                                               |  |                   |         |               
|Total Current Assets                           |  |                   | 904.7   |               
|                                               |  |                   |         |               
|Property and Equipment                         |  |                   |         |               
|Flight equipment                               |  |                   | 1,899.7 |               
|Other property and equipment                   |  |                   | 308.6   |               
|Deposits for future flight equipment           |  |                   | 87.0    |               
|                                               |  |                   |         |               
|                                               |  |                   | 2,295.3 |               
|Less accumulated depreciation and amortization |  |                   | 602.5   |               
|                                               |  |                   |         |               
|Total Property and EquipmentNet               |  |                   | 1,692.8 |               
|                                               |  |                   |         |               
|Intangible Assets                              |  |                   | 12.5    |               
|                                               |  |                   |         |               
|Other Assets                                   |  |                   | 131.7   |               
|                                               |  |                   |         |               
|Total Assets                                   |  | $                 | 2,741.7 |               
|                                               |  |                   |         |               

See
accompanying notes to financial statements.

2

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BALANCE SHEETS (unaudited)  Alaska Airlines, Inc.

|                                                                |                                                           | December 31,
2001 |         | March 31,
2002
|--------------------------------------------------------------- | --------------------------------------------------------- | ----------------- | ------- | --------------
|
|LIABILITIES AND SHAREHOLDER'S EQUITY                            |                                                           |                   |         |               
|Current Liabilities                                             |                                                           |                   |         |               
|Accounts payable                                                |                                                           | $                 | 96.1    |               
|Payables to related companies                                   |                                                           |                   | 4.4     |               
|Accrued aircraft rent                                           |                                                           |                   | 81.7    |               
|Accrued wages, vacation and payroll taxes                       |                                                           |                   | 67.1    |               
|Other accrued liabilities                                       |                                                           |                   | 188.2   |               
|Air traffic liability                                           |                                                           |                   | 219.5   |               
|Current portion of long-term debt and capital lease obligations |                                                           |                   | 43.2    |               
|                                                                |                                                           |                   |         |               
|Total Current Liabilities                                       |                                                           |                   | 700.2   |               
|                                                                |                                                           |                   |         |               
|Long-Term Debt and Capital Lease Obligations                    |                                                           |                   | 863.3   |               
|                                                                |                                                           |                   |         |               
|Other Liabilities and Credits                                   |                                                           |                   |         |               
|Deferred income taxes                                           |                                                           |                   | 150.5   |               
|Deferred revenue                                                |                                                           |                   | 165.8   |               
|Other liabilities                                               |                                                           |                   | 171.5   |               
|                                                                |                                                           |                   |         |               
|                                                                |                                                           |                   | 487.8   |               
|                                                                |                                                           |                   |         |               
|Shareholder's Equity                                            |                                                           |                   |         |               
|Common stock, $1 par value                                      |                                                           |                   |         |               
|                                                                | Authorized: 1,000 shares
Issued: 2001 and 2002500 shares |                   |         |              
|                                                                | Capital in excess of par value                            |                   |         | 324.8         
|Accumulated other comprehensive income (loss)                   |                                                           |                   | (3.1    | )             
|Retained earnings                                               |                                                           |                   | 368.7   |               
|                                                                |                                                           |                   |         |               
|                                                                |                                                           |                   | 690.4   |               
|                                                                |                                                           |                   |         |               
|Total Liabilities and Shareholder's Equity                      |                                                           | $                 | 2,741.7 |               
|                                                                |                                                           |                   |         |               

See
accompanying notes to financial statements.

3

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STATEMENTS OF INCOME (unaudited)  Alaska Airlines, Inc.

|                               |  | Three Months Ended March 31 |      
|------------------------------ |  | --------------------------- | -----
|
|
|Operating Revenues             |  |                             |      
|Passenger                      |  | $                           | 385.1
|Freight and mail               |  |                             | 18.3 
|Othernet                      |  |                             | 14.7 
|                               |  |                             |      
|Total Operating Revenues       |  |                             | 418.1
|                               |  |                             |      
|Operating Expenses             |  |                             |      
|Wages and benefits             |  |                             | 155.3
|Contracted services            |  |                             | 17.9 
|Aircraft fuel                  |  |                             | 74.0 
|Aircraft maintenance           |  |                             | 31.1 
|Aircraft rent                  |  |                             | 35.3 
|Food and beverage service      |  |                             | 13.2 
|Commissions                    |  |                             | 15.9 
|Other selling expenses         |  |                             | 26.0 
|Depreciation and amortization  |  |                             | 23.1 
|Loss on sale of assets         |  |                             | 0.9  
|Landing fees and other rentals |  |                             | 21.5 
|Other                          |  |                             | 36.4 
|                               |  |                             |      
|Total Operating Expenses       |  |                             | 450.6
|                               |  |                             |      
|Operating Loss                 |  |                             | (32.5
|                               |  |                             |      
|Nonoperating Income (Expense)  |  |                             |      
|Interest income                |  |                             | 9.5  
|Interest expense               |  |                             | (12.1
|Interest capitalized           |  |                             | 2.6  
|Othernet                      |  |                             | (1.2 
|                               |  |                             |      
|                               |  |                             | (1.2 
|                               |  |                             |      
|Loss before income tax         |  |                             | (33.7
|Income tax credit              |  |                             | (12.1
|                               |  |                             |      
|Net Loss                       |  | $                           | (21.6
|                               |  |                             |      

See
accompanying notes to financial statements.

4

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STATEMENT OF SHAREHOLDER'S EQUITY (unaudited)  Alaska Airlines, Inc.

|                                                          |                              | Common
Stock |   | Capital in
Excess of
Par Value |   | Accumulated
Other
Comprehensive
Income (Loss) |  | Retained
Earnings |      | Total |  
|--------------------------------------------------------- | ---------------------------- | ------------ | - | ------------------------------ | - | --------------------------------------------- |  | ----------------- | ---- | ----- | -
|
|Balances at December 31, 2001                             |                              | $            |  |                                | $ | 324.8                                         |  | $                 | (3.1 | )     | $
|Net loss for the three months ended March 31, 2002        |                              |              |   |                                |   |                                               |  |                   |      |       |  
|Other comprehensive income (loss) related to fuel hedges: |                              |              |   |                                |   |                                               |  |                   |      |       |  
|                                                          | Change in fair value         |              |   |                                |   |                                               |  |                   |      | 16.4  |  
|                                                          | Reclassification to earnings |              |   |                                |   |                                               |  |                   |      | (2.5  | )
|                                                          | Income tax effect            |              |   |                                |   |                                               |  |                   |      | (5.2  | )
|                                                          |                              |              |   |                                |   |                                               |  |                   |      |       |  
|                                                          |                              |              |   |                                |   |                                               |  |                   | 8.7  |       |  
|                                                          |                              |              |   |                                |   |                                               |  |                   |      |       |  
|Total comprehensive income (loss)                         |                              |              |   |                                |   |                                               |  |                   |      |       |  
|                                                          |                              |              |   |                                |   |                                               |  |                   |      |       |  
|Balances at March 31, 2002                                |                              | $            |  |                                | $ | 324.8                                         |  | $                 | 5.6  |       | $
|                                                          |                              |              |   |                                |   |                                               |  |                   |      |       |  

See
accompanying notes to financial statements.

5

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STATEMENTS OF CASH FLOWS (unaudited)  Alaska Airlines, Inc.

|                                                                                          |                                                                   | Three Months Ended March 31 |      
|----------------------------------------------------------------------------------------- | ----------------------------------------------------------------- | --------------------------- | -----
|
|
|Cash flows from operating activities:                                                     |                                                                   |                             |      
|Net loss                                                                                  |                                                                   | $                           | (21.6
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |                                                                   |                             |      
|                                                                                          | Depreciation and amortization                                     |                             |      
|                                                                                          | Amortization of airframe and engine overhauls                     |                             |      
|                                                                                          | Loss on sale of assets                                            |                             |      
|                                                                                          | Decrease in deferred income taxes                                 |                             |      
|                                                                                          | Increase in accounts receivable                                   |                             |      
|                                                                                          | Decrease in other current assets                                  |                             |      
|                                                                                          | Increase in air traffic liability                                 |                             |      
|                                                                                          | Increase (decrease) in other current liabilities                  |                             |      
|                                                                                          | Increase in deferred revenue and other-net                        |                             |      
|                                                                                          |                                                                   |                             |      
|Net cash provided by (used in) operating activities                                       |                                                                   |                             | 44.9 
|                                                                                          |                                                                   |                             |      
|Cash flows from investing activities:                                                     |                                                                   |                             |      
|Proceeds from disposition of assets                                                       |                                                                   |                             |     
|Purchases of marketable securities                                                        |                                                                   |                             | (79.6
|Sales and maturities of marketable securities                                             |                                                                   |                             | 133.4
|Property and equipment additions:                                                         |                                                                   |                             |      
|                                                                                          | Flight equipment, including purchase deposits                     |                             |      
|                                                                                          | Capitalized airframe and engine overhauls                         |                             |      
|                                                                                          | Aircraft modifications, rotable parts, and other flight equipment |                             |      
|                                                                                          | Other property and equipment                                      |                             |      
|Restricted deposits                                                                       |                                                                   |                             | (0.4 
|                                                                                          |                                                                   |                             |      
|Net cash used in investing activities                                                     |                                                                   |                             | (30.4
|                                                                                          |                                                                   |                             |      
|Cash flows from financing activities:                                                     |                                                                   |                             |      
|Proceeds from issuance of long-term debt                                                  |                                                                   |                             | 29.5 
|Long-term debt and capital lease payments                                                 |                                                                   |                             | (60.2
|                                                                                          |                                                                   |                             |      
|Net cash used in financing activities                                                     |                                                                   |                             | (30.7
|                                                                                          |                                                                   |                             |      
|Net change in cash and cash equivalents                                                   |                                                                   |                             | (16.2
|Cash and cash equivalents at beginning of period                                          |                                                                   |                             | 101.0
|                                                                                          |                                                                   |                             |      
|Cash and cash equivalents at end of period                                                |                                                                   | $                           | 84.8 
|                                                                                          |                                                                   |                             |      
|Supplemental disclosure of cash paid (refunded) during the period for:                    |                                                                   |                             |      
|                                                                                          | Interest                                                          |                             | $    
|                                                                                          | Income taxes                                                      |                             |      
|Noncash investing and financing activities                                                |                                                                   |                             | None 

See
accompanying notes to financial statements.

6

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NOTES TO FINANCIAL STATEMENTS (unaudited)  Alaska Airlines, Inc.

Note 1. Basis of Presentation and Significant Accounting policies

The accompanying unaudited financial statements of Alaska Airlines, Inc. (the Company or Alaska), should be read in conjunction with the financial
statements in the Company's annual report on Form 10-K for the year ended December 31, 2001. They include all adjustments that are, in the opinion of management, necessary
for a fair presentation of the results for the interim periods. The adjustments made were of a normal recurring nature. The Company is a wholly owned subsidiary of Alaska Air Group, Inc. (Air
Group) whose principal subsidiaries are Alaska Airlines, Inc. and Horizon Air Industries, Inc. Certain reclassifications have been made in the prior year's financial statements to
conform to the 2002 presentation.

Effective
January 1, 2002, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 142, "Goodwill and Other Intangible Assets". Under this Statement, the
Company's intangible assets are considered to have an indefinite life and will no longer be amortized but instead will be subject to periodic impairment testing. Additionally, we will be required to
apply a fair market value based assumption test to our goodwill at least annually. The impact of the adoption of SFAS No. 142 is expected to increase annual net income by $0.5 million
related to the discontinuance of amortization of existing goodwill. We are currently evaluating whether there will be additional impacts from the adoption of SFAS No. 142 on our financial
statements such as an impairment of existing goodwill amounts.

In
June 2001, the Financial Accounting Standards Board (FASB) issued SFAS No. 143, "Accounting for Asset Retirement Obligations" (effective for the Company on
January 1, 2003). This Statement addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset
retirement costs. The Company is in the process of evaluating the financial statement impact of SFAS No. 143.

In
August 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets." This Statement supersedes SFAS No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" and APB Opinion No. 30, "Reporting the Results of
OperationsReporting the Effects of Disposal of a Segment of Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions. " Adoption of this Statement, in the
fiscal year beginning January 1, 2002, did not have a material impact on the Company's financial statements.

Note 2. Other Assets

At December 31, 2001 and March 31, 2002, other assets included prepaid pension cost of $98.4 million and $97.5 million, respectively.

Note 3. Frequent Flyer Program (See Note 1 to Financial Statements at December 31, 2001)

Alaska's Mileage Plan liabilities are included under the following balance sheet captions.

December 31, 2001

March 31, 2002(In millions)Current Liabilities:Other accrued liabilities

$
67.3

$
66.8Other Liabilities and Credits:Deferred revenue


123.0


122.0Other liabilities


58.0


72.0Total

$
248.3

$
260.8


7

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Alaska Airlines Financial and Statistical Data

|                                   |  | Three Months Ended March 31 |       
|---------------------------------- |  | --------------------------- | ------
|
|Financial Data (in millions):      |  |                             |       
|Operating Revenues:                |  |                             |       
|Passenger                          |  | $                           | 385.1 
|Freight and mail                   |  |                             | 18.3  
|Othernet                          |  |                             | 14.7  
|                                   |  |                             |       
|Total Operating Revenues           |  |                             | 418.1 
|                                   |  |                             |       
|Operating Expenses:                |  |                             |       
|Wages and benefits                 |  |                             | 155.3 
|Contracted services                |  |                             | 17.9  
|Aircraft fuel                      |  |                             | 74.0  
|Aircraft maintenance               |  |                             | 31.1  
|Aircraft rent                      |  |                             | 35.3  
|Food and beverage service          |  |                             | 13.2  
|Commissions                        |  |                             | 15.9  
|Other selling expenses             |  |                             | 26.0  
|Depreciation and amortization      |  |                             | 23.1  
|Loss on sale of assets             |  |                             | 0.9   
|Landing fees and other rentals     |  |                             | 21.5  
|Other                              |  |                             | 36.4  
|                                   |  |                             |       
|Total Operating Expenses           |  |                             | 450.6 
|                                   |  |                             |       
|Operating Loss                     |  |                             | (32.5 
|                                   |  |                             |       
|Interest income                    |  |                             | 9.5   
|Interest expense                   |  |                             | (12.1 
|Interest capitalized               |  |                             | 2.6   
|Othernet                          |  |                             | (1.2  
|                                   |  |                             |       
|                                   |  |                             | (1.2  
|                                   |  |                             |       
|Loss Before Income Tax             |  | $                           | (33.7 
|                                   |  |                             |       
|Operating Statistics:              |  |                             |       
|Revenue passengers (000)           |  |                             | 3,198 
|RPMs (000,000)                     |  |                             | 2,895 
|ASMs (000,000)                     |  |                             | 4,428 
|Passenger load factor              |  |                             | 65.4  
|Breakeven load factor              |  |                             | 73.4  
|Yield per passenger mile           |  |                             | 13.30 
|Operating revenue per ASM          |  |                             | 9.44  
|Operating expenses per ASM         |  |                             | 10.18 
|Expense per ASM excluding fuel     |  |                             | 8.51  
|Fuel cost per gallon               |  |                             | 97.1  
|Fuel gallons (000,000)             |  |                             | 76.2  
|Average number of employees        |  |                             | 10,203
|Aircraft utilization (blk hrs/day) |  |                             | 11.0  
|Operating fleet at period-end      |  |                             | 96    

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NM
= Not Meaningful

8

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ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Information

This report may contain forward-looking statements that are based on the best information currently available to management. These forward-looking statements are
intended to be subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking
statements are indicated by phrases such as "will", "should", "the Company believes", "we expect" or any other language indicating a prediction of future events. There can be no assurance that actual
developments will be those anticipated by the Company. Actual results could differ materially from those projected as a result of a number of factors, some of which the Company cannot predict or
control. For a discussion of these factors, please see Item 1 of the Company's Annual Report on Form 10-K for the year ended December 31, 2001.

Results of Operations

First Quarter 2002 Compared with First Quarter 2001

Net loss for the first quarter of 2002 was $28.2 million compared with a loss of $21.6 million in 2001. The operating loss for the first quarter of
2002 was $41.8 million compared with an operating loss of $32.5 million for 2001. Financial and statistical data is shown on page eight. A discussion of this data follows.

Revenues

Capacity was down 4.9% in January but increased 3.1% in February and 4.5% in March. For the quarter, capacity increased 0.9% due to our service to new markets
(Seattle to Washington D.C., Los Angeles to Cancun and Los Angeles to Calgary), partially offset by reduced service in existing markets, especially the Pacific Northwest to Southern California and
Northern California. Traffic grew by 2.8%, and our passenger load factor increased 1.3 percentage points. The Canada and Mexico markets experienced the largest increases in load factor.
Passenger yields were down 5.5% due to a combination of fewer business passengers, a drop off in demand due to the September 11, 2001 terrorist attacks, and fare sales offered to stimulate
demand. Yields were down in virtually all major markets, with Mexico and Canada showing the largest decreases. The lower yield combined with the higher load factor resulted in a 3.1% decrease in
revenue per available seat mile (ASM). The higher traffic combined with the lower yield resulted in a 2.8% decrease in passenger revenue.

Freight
and mail revenues decreased 13.1% due to lower freight and mail volumes as a result of decreased business activity and increased security restrictions. Other-net
revenues increased 27.9%, largely due to increased revenue from the sale of miles in Alaska's frequent flyer program.

Expenses

For the quarter, total operating expenses were flat compared to 2001. Fuel expense decreased by $18.8 million, which was offset by increases in other
expense categories, primarily wages and benefits. Cost per ASM decreased by 0.9%. Cost per ASM excluding fuel increased by 4.1%. Explanations of significant year-over-year
changes in the components of operating expenses are as follows:



9

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Nonoperating Income (Expense)

Net nonoperating items were $2.1 million expense in 2002 compared to $1.2 million expense in 2001. Interest income decreased $4.5 million due
to lower interest rates, while interest expense (net of capitalized interest) was up $2.3 million due to new debt incurred in the past year and much lower levels of capitalization.
Other-net included a $2.5 million gain due to the increase in value of fuel hedging contracts in 2002 (compared with a $1.4 million loss on such contracts in 2001), a
$1.4 million insurance recovery and a $1.0 million gain on conversion of Equant N.V. shares (a telecommunications network company owned by many airlines).

Income Tax CreditAccounting standards require us to provide for income taxes each quarter based on our estimate of the
effective tax rate for the full year. The volatility of air fares and fuel prices and the seasonality of our business make it difficult to accurately forecast full-year pretax results. In
addition, a relatively small change in pretax results can cause a significant change in the effective tax rate due to the magnitude of nondeductible expenses, such as employee per diem costs. In
estimating the 35.8% tax rate for the first quarter of 2002, we considered a variety of factors, including the U.S. federal rate
of 35%, estimates of nondeductible expenses and state income taxes, and our forecast of pretax income for the full year. We evaluate this rate each quarter and make adjustments if necessary.

10

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Liquidity and Capital Resources

The table below presents the major indicators of financial condition and liquidity.

|                                                                                                  |  | December 31, 2001 |        | March 31, 2002 |   | Change |  
|------------------------------------------------------------------------------------------------- |  | ----------------- | ------ | -------------- | - | ------ | -
|
|Cash and marketable securities                                                                    |  | $                 | 660.6  |                | $ | 619.4  |  
|Working capital                                                                                   |  |                   | 204.5  |                |   | 210.6  |  
|Long-term debt and capital lease obligations                                                      |  |                   | 863.3  |                |   | 862.5  |  
|Shareholder's equity                                                                              |  |                   | 690.4  |                |   | 670.9  |  
|Debt-to-capital                                                                                   |  |                   | 56%:44 | %              |   | 56%:44 | %
|Debt-to-capital assuming aircraft operating leases are capitalized at seven times annualized rent |  |                   | 72%:28 | %              |   | 72%:28 | %

The
Company's cash and marketable securities portfolio decreased $41.2 million during the first three months of 2002. $49.4 million of the decrease is attributable to
payments for transportation taxes related to the fourth quarter 2001 which we were allowed to defer until this quarter under the Air Transportation Safety and System Stabilization Act, and
$33.4 million is from an increase in receivables from Horizon. Cash was also used for $20.7 million of capital expenditures, including the purchase of spare parts and airframe and engine
overhauls.

Shareholders'
equity decreased $19.5 million primarily due to the net loss of $28.2 million.

CommitmentsAs of March 31, 2002, the Company had firm orders for 8 aircraft requiring aggregate payments of
approximately $237 million, as set forth below. In addition, Alaska has options to acquire 28 more B737s. Alaska expects to finance the new planes with either leases, long-term debt
or internally generated cash.

|                    |  | Delivery PeriodFirm Orders
|------------------- |  | ---------------------------
|
|
|Boeing B737-700     |  |                            
|Boeing B737-900     |  |                            
|                    |  |                            
|Total               |  |                            
|                    |  |                            
|Payments (Millions) |  | $                          
|                    |  |                            

New Accounting StandardsIn June 2001, the Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards (SFAS) No. 143, "Accounting for Asset Retirement Obligations" (effective for the Company on January 1, 2003). This Statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The Company is in the process of evaluating the financial
statement impact of SFAS No. 143.

11

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PART II. OTHER INFORMATION

ITEM 1. Legal Proceedings

Flight 261 Litigation

Alaska is a defendant in a number of lawsuits relating to the loss of Flight 261 on January 31, 2000. Representatives of all 88 passengers and crew on
board have filed cases against Alaska, the Boeing Company, and others. The suits seek unspecified compensatory and punitive damages. In May 2001, the judge presiding over the majority of the
cases ruled that punitive damages are not available against Alaska. Alaska has settled a number of these cases and continues in its efforts to settle the remaining ones. Consistent with industry
standards, the Company maintains insurance against aircraft accidents.

Management
believes the ultimate disposition of this matter is not likely to materially affect the Company's financial position or results of operations. This forward-looking statement
is based on management's current understanding of the relevant law and facts; it is subject to various contingencies, including the potential costs and risks associated with litigation and the actions
of judges and juries.

The
Company is also a party to other ordinary routine litigation incidental to its business and with respect to which no material liability is expected.

ITEM 6. Exhibits and Reports on Form 8-K

12

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Signatures

Pursuant to the requirements of the Securities Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.

|ALASKA AIRLINES, INC.Registrant                                                                     |  | 
|--------------------------------------------------------------------------------------------------- |  | 
|Date: April 29, 2002                                                                                |  | 
|                                                                                                    |  | 
|/s/ Bradley D. TildenBradley D. Tilden Executive Vice President/Finance and Chief Financial Officer |  | 
|                                                                                                    |  | 
|/s/ Terri K. MaupinTerri K. Maupin Staff Vice President/Finance and Controller                      |  | 

13

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