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             EXHIBIT 10.18 TO ALASKA AIR GROUP, INC. 1999 FORM 10-K

                           CHANGE OF CONTROL AGREEMENT

         AGREEMENT by and between Alaska Airlines, Inc., an Alaska corporation
(the "Employer"), and < < FIRSTNAME > > < < MI > > < < LASTNAME > > (the
"Executive"), dated as of the 27th day of October, 1999.

         The Board of Directors (the "Board") of Alaska Air Group, Inc. ("Air
Group") has determined that it is in the best interests of Air Group and its
stockholders to ensure that Air Group and its subsidiaries, including the
Employer, will have the continued dedication of the Executive, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined in
Section 2). The Board believes that it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Employer currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
that ensure that the compensation and benefits expectations of the Executive
will be satisfied, are competitive with those of other corporations, and align
the Executive's interests with those of Air Group's stockholders. Therefore, in
order to accomplish these objectives, the Board has caused the Employer to
enter into this Agreement.

         NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1.       CERTAIN DEFINITIONS

         (a)  "Accrued Obligations" is defined in Section 6(a)(i).

         (b)  "affiliated company" means any company controlled by, controlling
or under common control with Air Group.

         (c)  "Annual Base Salary" is defined in Section 4(b)(i).

         (d)  "Annual Bonus" is defined in Section 4(b)(ii).

         (e)  "Business Combination" means (i) a reorganization, exchange of
securities, merger or consolidation involving Air Group or (ii) the sale or
other disposition of all or substantially all the assets of Air Group.

         (f)  The "Change of Control Period" means the period commencing on the
date hereof and ending on the third anniversary of the date that either the
Employer or Air Group gives notice to the Executive that the Change of Control
Period shall be terminated.

         (g)  "Cause" means basis for termination for reason of admission by
the Executive or substantiation by the Employer of:

              (i)      embezzlement, dishonesty or other fraud, conviction
                       of a felony or conspiracy against the Employer; or

              (ii)     if prior to a Change of Control, any willful or
                       intentional injury to either the Employer, its
                       property, or its employees in connection with the
                       business affairs of the Employer.


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         (h)  "Code" means the Internal Revenue Code of 1986, as amended.

         (i)  "Effective Date" means the first date during the Change of
Control Period on which a Change of Control occurs. Anything in this Agreement
to the contrary notwithstanding, if a Change of Control occurs and if the
Executive's employment with the Employer is terminated prior to the date on
which the Change of Control occurs, and if it is reasonably demonstrated by the
Executive that such termination of employment (i) was at the request of a third
party who has taken steps reasonably calculated to effect the Change of Control
or (ii) otherwise arose in connection with or anticipation of the Change of
Control, then for all purposes of this Agreement the "Effective Date" shall
mean the date immediately prior to the date of such termination of employment.

         (j)  "Employment Period" is defined in Section 3.

         (k)  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

         (l)  "Good Reason" means the occurrence of one or more of the
following events:

              (i)      the reduction in the Executive's annual base salary
                       or the reduction in the value of other bonus payments
                       or equity awards that Executive is eligible to
                       receive under the Employer's plans;

              (ii)     the material diminution or reduction without the
                       Executive's consent of the Executive's title,
                       authority, duties, responsibilities or perquisites;

              (iii)    the Employer requiring Executive without the
                       Executive's consent to be based at any locations
                       other than the principal location of Executive's
                       employment immediately prior to a Change of Control;
                       or

              (iv)     any breach by the Employer of any other material
                       provision of this Agreement.

         (m)  "Incentive Plan" means Air Group's Management Incentive Plan.

         (n)           "Incumbent Director" means a member of the Board who has
              been either (i) nominated by a majority of the directors of Air
              Group then in office or (ii) appointed by directors so
              nominated, but excluding, for this purpose, any such
              individual whose initial assumption of office occurs as a
              result of either an actual or threatened election contest (as
              such terms are used in Rule 14a-11 of Regulation 14A
              promulgated under the Exchange Act) or other actual or
              threatened solicitation of proxies or consents by or on behalf
              of a Person other than the Board.

        (o)            "Notice of Termination" is defined in Section 5(a).

        (p)   "Person" means any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d) of the Exchange Act).

        (q)   "Recent Average Bonus" is defined in Section 4(b)(ii).

        (r)   "Retirement Plan" means the Employer's funded pension plan or any
successor plan thereto.

        (s)   "Welfare Benefit Continuation" is defined in Section 6(b).


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2.       CHANGE OF CONTROL

         For the purpose of this Agreement, a "Change of Control" means the
occurrence of any of the following:

         (a)  the Board approves (or, if approval of the Board is not required
as a matter of law, the stockholders of Air Group approve):

              (i)      any consolidation or merger of Air Group in which Air
                       Group is not the continuing or surviving corporation
                       or pursuant to which shares of common stock of Air
                       Group would be converted into cash, securities or
                       other property, other than a merger of Air Group in
                       which the holders of common stock of Air Group
                       immediately prior to the merger have the same
                       proportionate ownership of common stock of the
                       surviving corporation immediately after the merger;

              (ii)     any sale, lease, exchange or other transfer (in one
                       transaction or a series of related transactions) of
                       all, or substantially all, the assets of Air Group;
                       or

              (iii)    the adoption of any plan or proposal for the
                       liquidation or dissolution of Air Group;

         (b)  at any time during a period of twenty-four (24) months, fewer
than a majority of the members of the Board are Incumbent Directors. "Incumbent
Directors" means:

              (i)      individuals who constitute the Board at the beginning
                       of such period; and

              (ii)     individuals who were nominated or elected by all of,
                       or a committee composed entirely of, the individuals
                       described in (i); and

              (iii)    individuals who were nominated or elected by
                       individuals described in (ii).

         (c)  any Person shall, as a result of a tender or exchange offer,
              open market purchases, privately-negotiated purchases or
              otherwise, become the beneficial owner (within the meaning of
              Rule 13d-3 under the Exchange Act), directly or indirectly, of
              the then-outstanding securities of Air Group ordinarily (and
              apart from rights accruing under special circumstances) having
              the right to vote in the election of members of the Board
              ("Voting Securities" to be calculated as provided in paragraph
              (d) of Rule 13d-3 in the case of rights to acquire common
              stock of Air Group) representing 20% or more of the combined
              voting power of the then-outstanding Voting Securities.

         Unless the Board shall determine otherwise, a Change of Control shall
not be deemed to have occurred by reason of any corporate reorganization,
merger, consolidation, transfer of assets, liquidating distribution or other
transaction entered into solely by and between Air Group and any Affiliate
thereof, provided such transaction has been approved by at least two-thirds
(2/3) of the Incumbent Directors (as defined above) then in office and voting.

3.       EMPLOYMENT PERIOD

         The Employer hereby agrees to continue the Executive in its employ,
and the Executive hereby agrees to remain in the employ of the Employer, in
accordance with the terms and provisions of this Agreement, for the period
commencing on the Effective Date and ending on the third anniversary of such
date (the "Employment Period"), in an executive capacity, responsible for,
among other things, duties


                                      -3-

<PAGE>

associated with such capacity, and, subject to the general supervision of the
Board as required by the Delaware General Corporation Law, such other duties
and responsibilities as are not inconsistent with the express terms of this
Agreement. Such employment may be with the Employer, Air Group or any of its
principal operating subsidiaries, as appropriate to the management structure
developed by the Employer or Air Group. The Employer agrees that it will not
take any action, or make any demands on the Executive, that may be deemed to
arbitrarily, unreasonably or unnecessarily interfere with the performance of
the services to be rendered by the Executive hereunder.

         Prior to the Effective Date, Executive's employment with the Employer
is at will.

4.       TERMS OF EMPLOYMENT

         (a)  POSITION AND DUTIES.

              (i)  During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements), authority,
duties and responsibilities shall be in accordance with Section 3 and (B) the
Executive's services shall be performed within the metropolitan area in which
the Executive was situated immediately prior to the Effective Date, except for
required travel in the Employer business to the extent consistent with the
Executive's duties in Section 3.

              (ii)  During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours to
the business and affairs of the Employer and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive's reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period it shall not be a violation of
this Agreement for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions, or (C) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities as an employee of the Employer in accordance with
this Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the Effective
Date, the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Employer.

         (b)  COMPENSATION.

              (i)   BASE SALARY. During the Employment Period, the Executive
shall receive an annual base salary ("Annual Base Salary"), which shall be paid
in equal installments, at least equal to 12 times the highest monthly base
salary paid or payable to the Executive by the Employer in respect of the
12-month period immediately preceding the month in which the Effective Date
occurs. For purposes of this Agreement, Annual Base Salary shall not include
any payments by the Employer on the Executive's behalf pursuant to any
incentive, savings or retirement plans, any welfare benefit plans or any fringe
benefit plans, in each case, of the Employer or any affiliated company, of the
type identified in paragraphs (iii) through (vi) of this Section 4(b), or any
reimbursement of expenses by the Employer or any affiliated company in
accordance with paragraph (v) of this Section 4(b), but shall include vacation
pay in accordance with paragraph (viii) of this Section 4(b). During the
Employment Period, the Annual Base Salary shall be reviewed at least annually
and shall be increased at any time and from time to time as shall be
substantially consistent with increases in base salary generally awarded in the
ordinary course of business to other peer executives of the Employer and any
affiliated companies. Any increase in Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this Agreement.
Annual Base Salary


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shall not be reduced after any such increase, and the term Annual Base Salary
as utilized in this Agreement shall refer to Annual Base Salary as so increased.

              (ii)   ANNUAL BONUS. In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the Employment
Period, an annual bonus (the "Annual Bonus") in cash at least equal to the
greater of (A) the Executive's target annual bonus (annualized if such target
bonus is based on a period of less than 12 full months) in effect on the
Effective Date and (B) the average annualized (for any fiscal year consisting
of less than 12 full months or with respect to which the Executive has been
employed by the Employer for less than 12 full months) bonus paid or payable,
including by reason of any deferral, to the Executive by the Employer in
respect of the three fiscal years immediately preceding the fiscal year in
which the Effective Date occurs (the "Recent Average Bonus"). Each such Annual
Bonus shall be paid no later than the end of the third month of the fiscal year
next following the fiscal year for which the Annual Bonus is awarded, unless
the Executive shall elect to defer the receipt of such Annual Bonus.

              (iii)   INCENTIVE, SAVINGS AND RETIREMENT PLANS. During the
Employment Period, the Executive shall be entitled to participate in all
incentive, savings and retirement plans, practices, policies and programs
applicable generally to other peer executives of the Employer, but in no event
shall such plans, practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is
applicable), savings opportunities and retirement benefit opportunities, in
each case, that are less favorable, in the aggregate, than the most favorable
of those provided by the Employer for the Executive under such plans,
practices, policies and programs as in effect at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective Date to
other executives of the Employer.

              (iv)  WELFARE BENEFIT PLANS. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare benefit
plans, practices, policies and programs provided by the Employer (including,
without limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to other peer
executives of the Employer, but in no event shall such plans, practices,
policies and programs provide the Executive with benefits that are less
favorable, in the aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, those provided generally at any time after the Effective Date to
other peer executives of the Employer.

              (v)  EXPENSES. During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable employment
expenses incurred by the Executive in accordance with the most favorable
policies, practices and procedures of the Employer in effect for the Executive
at any time during the 90-day period immediately preceding the Effective Date
or, if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Employer.

              (vi)  FRINGE BENEFITS. During the Employment Period, the
Executive shall be entitled to fringe benefits in accordance with the most
favorable plans, practices, programs and policies of the Employer in effect for
the Executive at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect generally
at any time thereafter with respect to other peer executives of the Employer.

              (vii)  VACATION. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Employer as in effect for the Executive
at any time during the 90-day period immediately preceding the Effective Date
or, if


                                      -5-

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more favorable to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Employer.

5.       TERMINATION OF EMPLOYMENT

         (a)  TERMINATION. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period. The
Executive's employment may be terminated at any time during the Employment
Period for any reason by either the Executive or by the Employer, communicated
by a notice of termination to the other party hereto given in accordance with
Section 12(b) (a "Notice of Termination").

         (b)  DATE OF TERMINATION. "Date of Termination" means (i) if the
Executive's employment is terminated by the Employer or by the Executive, the
date of receipt of the Notice of Termination or any later date specified
therein, as the case may be, and (ii) if the Executive's employment is
terminated by reason of death, the date of death of the Executive.

6.       OBLIGATIONS OF THE EMPLOYER UPON TERMINATION

         If the Executive's employment is terminated during the Employment
Period by the Executive for Good Reason or by the Employer without Cause:

              (a)   the Employer shall pay to the Executive in a lump sum in
cash within 30 days after the Date of Termination the aggregate of the
following amounts:

                    (i)   A lump sum amount equal to all payments to which the
Executive would have been entitled during the Employment Period, but for the
termination, including, without limitation, the aggregate amounts of the
Executive's Annual Base Salary (calculated in accordance with Section 4(b)(i)
hereof) and the aggregate amounts of the Executive's Annual Bonus (calculated
in accordance with Section 4(b)(ii) hereof), payable in each case during the
Employment Period, less any amounts comprising any portion of Annual Base
Salary or Annual Bonus actually received by the Executive during the period
commencing on the Effective Date and ending on the Date of Termination.

                    (ii)  A separate lump sum supplemental retirement benefit
equal to the difference between (1) the actuarial equivalent (utilizing for
this purpose the actuarial assumptions utilized with respect to the Employer
defined benefit retirement plan during the 90-day period immediately preceding
the Effective Date) of the benefits payable under the Employer defined benefit
retirement plans, the 1995 Elected Officers' Supplementary Retirement Plan and
any similar plans providing benefits for the Executive that the Executive would
receive if the Executive's employment continued at the compensation level
provided for in Section 4(b) and for the remainder of the Employment. Assuming
for this purpose that all accrued benefits are fully vested and that benefit
accrual formulas are no less advantageous to the Executive than those in effect
during the 90-day period immediately preceding the Effective Date, and (2) the
actuarial equivalent (utilizing for this purpose the same assumptions as
outlined above) of the Executive's actual benefit paid (or payable), if any,
under the foregoing plans; and

              (b)   for the remainder of the Employment Period, or such longer
period as any plan, program, practice or policy may provide, the Employer shall
continue benefits to the Executive and/or the Executive's family at least equal
to those that would have been provided to them in accordance with the plans,
programs, practices and policies described in Sections 4(b)(iv) if the
Executive's employment had not been terminated in accordance with the most
favorable plans, practices, programs or policies of the Employer as in effect
and applicable generally to other executives and their families during the
90-day period immediately preceding the Effective Date or, if more favorable to
the Executive, as in effect generally at any


                                      -6-

<PAGE>

time thereafter with respect to other peer executives of the Employer and their
families; provided, however, that if the Executive becomes reemployed with
another employer and is eligible to receive medical or other welfare benefits
under another employer-provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such other plan
during such applicable period of eligibility (such continuation of such
benefits for the applicable period herein set forth shall be hereinafter
referred to as "Welfare Benefit Continuation"). For purposes of determining
eligibility of the Executive for retiree benefits pursuant to such plans,
practices, programs and policies, the Executive shall be considered to have
remained employed until the end of the Employment Period and to have retired on
the last day of such period; provided, however, that the Executive shall be
entitled to the more favorable of the retiree benefits in effect on the Date of
Termination or the retiree benefits in effect on the date that would have been
the last date of the Employment Period if the Executive had remained employed;

              (c)   to the extent not theretofore paid or provided, the
Employer shall timely pay or provide to the Executive and/or the Executive's
family any other amounts or benefits required to be paid or provided or which
the Executive and/or the Executive's family is eligible to receive pursuant to
this Agreement and under any plan, program, policy or practice or contract or
agreement of the Employer as in effect and applicable generally to other peer
executives and their families during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as in effect
generally thereafter with respect to other peer executives of the Employer and
their families (such other amounts and benefits shall be hereinafter referred
to as the "Other Benefits").

7.       NONEXCLUSIVITY OF RIGHTS

         Nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any plan, program, policy or practice
provided by the Employer and for which the Executive may qualify, nor shall
anything herein limit or otherwise affect such rights as the Executive may have
under any contract or agreement with the Employer. Amounts that are vested
benefits or that the Executive is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with the Employer
or any of its affiliated companies at or subsequent to the Date of Termination
shall be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.

8.       FULL SETTLEMENT; RESOLUTION OF DISPUTES

         (a)  The Employer obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action that the Employer may have against the Executive or others. In
no event shall the Executive be obligated to seek other employment or take any
other action by way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement, and, except as provided in Section
6(b), such amounts shall not be reduced whether or not the Executive obtains
other employment. The Employer agrees to pay promptly upon invoice, to the full
extent permitted by law, all legal fees and expenses that the Executive may
incur as a result of any contest (regardless of the outcome thereof) by the
Employer, the Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the Executive
about the amount of any payment pursuant to this Agreement).

         (b)  If there shall be any dispute between the Employer and the
Executive (i) in the event of any termination of the Executive's employment by
the Employer, whether such termination was in connection with or in
anticipation of a Change of Control so as to trigger the Effective Date under
Section 1(i), then, unless and until there is a final, nonappealable judgment
by a court of competent jurisdiction declaring that such termination was in
connection with or in anticipation of a Change of Control, the Employer shall
pay all


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<PAGE>

amounts, and provide all benefits, to the Executive and/or the Executive's
family or other beneficiaries, as the case may be, that the Employer would be
required to pay or provide pursuant to Section 6 as though such termination
were in connection with or in anticipation of a Change of Control; provided,
however, that the Employer shall not be required to pay any disputed amounts
pursuant to this Section 8(b) except upon receipt of an undertaking by or on
behalf of the Executive to repay all such amounts to which the Executive is
ultimately adjudged by such court not to be entitled.

9.       CERTAIN ADJUSTMENTS

         (a)  In the event that the Executive becomes entitled to the payments
or other benefits described in Section 6 hereof and the Executive becomes
subject to the tax imposed by Section 4999 of the Code or any successor
provision (the "Excise Tax") as a result of such payments and benefits and any
other payments or benefits from the Employer required to be taken into account
under Code Section 280G(b)(2) (collectively, "Parachute Payments"), the
Employer shall pay to Executive an additional amount (the "Make-Whole Payment")
equal to the sum of (i) the Excise Tax payable to the Executive prior to the
Make-Whole Payment and (ii) the Federal, state and local income tax and Excise
Tax (including any interest or penalties thereon) payable upon all payments
made under subparagraphs (i) and (ii) of this Section 9(a).

         (b)  All determinations required to be made under this Section 9,
including whether the Executive has received a Parachute Payment, shall be made
by Arthur Andersen LLP (the "Accounting Firm") which shall provide detailed
supporting calculations to both the Employer and the Executive within 15
business days of the receipt of notice from the Executive that the Executive
has received a payment under Section 6, or such earlier time as is requested by
the Employer. In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting the Change of Control,
the Executive shall appoint another nationally recognized accounting firm to
make the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). All fees and expenses of the
Accounting Firm shall be borne solely by the Employer. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with a written opinion that failure to report the Excise Tax on the
Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty. As promptly as practicable
following such determination, the Employer shall pay to or distribute for the
benefit of the Executive such payments as are then due to the Executive under
this Agreement. Any determination by the Accounting Firm shall be binding upon
the Employer and Executive.

10.      CONFIDENTIAL INFORMATION

         The Executive shall hold in a fiduciary capacity for the benefit of
the Employer all secret or confidential information, knowledge or data relating
to the Employer or any of its affiliated companies, and their respective
businesses, that shall have been obtained by the Executive during the
Executive's employment by the Employer or any of its affiliated companies and
that shall not be or become public knowledge (other than by acts by the
Executive or representatives of the Executive in violation of this Agreement).
After termination of the Executive's employment with the Employer, the
Executive shall not, without the prior written consent of the Employer or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Employer and those
designated by it. In no event shall an asserted violation of the provisions of
this Section 10 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.

11.      SUCCESSORS

         (a)  This Agreement is personal to the Executive and without the prior
written consent of the Employer shall not be assignable by the Executive
otherwise than by will or the laws of descent and


                                      -8-

<PAGE>

distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal representatives.

         (b)  This Agreement shall inure to the benefit of and be binding on
the Employer and its successors and assigns.

         (c)  The Employer will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all the business and/or assets of the Employer to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Employer would be required to perform it if no such
succession had taken place. As used in this Agreement, Employer shall mean the
Employer as hereinbefore defined and any successor to its business and/or
assets as aforesaid that assumes and agrees to perform this Agreement by
operation of law, or otherwise.

12.      MISCELLANEOUS

         (a)  This Agreement shall be governed by and construed in accordance
with the laws of the state of Washington, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect. This Agreement may not be amended or
modified otherwise than by a written agreement executed by the parties hereto
or their respective successors and legal representatives.

         (b)  All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:

         If to the Executive:

                  -----------------------------
                  -----------------------------
                  -----------------------------
                  -----------------------------

         If to the Employer:

                  Alaska Airlines, Inc.
                  P.O. Box 68947
                  Seattle, WA  98168
                  Attention:  Corporate Secretary

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.

         (c)  The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.

         (d)  The Employer may withhold from any amounts payable under this
Agreement such federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.

         (e)  The Executive's or the Employer's failure to insist on strict
compliance with any provision hereof or any other provision of this Agreement
or the failure to assert any right the Executive or the


                                      -9-

<PAGE>

Employer may have hereunder, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement.

         (f)  The Executive and the Employer acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Employer, the employment of the Executive by the Employer is "at will"
and, prior to the Effective Date, may be terminated by either the Executive or
the Employer at any time. Moreover, if prior to the Effective Date, the
Executive's employment with the Employer terminates, then the Executive shall
have no further rights under this Agreement.

         (g)  This Agreement may be executed in counterparts, each of which
counterparts shall be deemed an original, but all of which together shall
constitute one and the same instrument.

         IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to authorization from the Board, the Employer has caused
this Agreement to be executed in its name and on its behalf, all as of the day
and year first above written.

                                  ALASKA AIRLINES, INC.


                                  By ___________________________________________
                                  John F. Kelly
                                  Chairman and Chief Executive Officer



                                  ______________________________________________
                                  < < FirstName > > < < MI > > < < LastName > >




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