BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Joint Application of Delta Air Lines, Inc. et al.

under 49 U.S.C. § 4130-8 and 4130-9 For Approval of and Antitrust Immunity for Alliance Agreements DOT-OST-2009-0155

ANSWER OF ALASKA AIRLINES INC. AND HORIZON AIR INDUSTRIES, INC. d/b/a HORIZON AIR

Communications with respect to this document should be addressed to:

Kyle B. Levine, Esq.Associate General CounselCommercial Law and Litigation Alaska Airlines, Inc. 19300 International Boulevard Seattle, Washington 98188 Marshall S. Sinick, Esq. Edward W. Sauer, Esq. Squire Sanders and Dempsey, LLP 1201 Pennsylvania Ave., NW Washington, DC 20004-0407 202-626-6600 msinick@ssd.com esauer@ssd.com

Counsel to Alaska Airlines, Inc. and Horizon Air Industries, Inc. d/b/a Horizon Air

Megan Lawrence, Esq. Managing Director, Government Affairs & Community Relations Alaska Airlines, Inc. 19300 International Boulevard Seattle, Washington 98188

Dated: October 22, 2010BEFORE THE U.S. DEPARTMENT OF TRANSPORTATION WASHINGTON, D.C.

Joint Application of Delta Air Lines, Inc. et al.

under 49 U.S.C. § 4130-8 and 4130-9 For Approval of and Antitrust Immunity for Alliance Agreements DOT-OST-2009-0155

ANSWER OF ALASKA AIRLINES INC. AND HORIZON AIR INDUSTRIES, INC. d/b/a HORIZON AIR

Alaska Airlines, Inc. (“Alaska”) and its a ffiliate Horizon Air Industries, Inc. d/b/a

Horizon Air (“Horizon”) 1 respectfully answer in support of Delta et al. res ponse explaining why

the Department should reconsider its Show Cause Order 2010-9-4 and grant antitrust immunity

to Delta’s U.S.-South Pacific alliance. 2

The basis for Alaska and Horizon’s support of Delta et al. enhanced U.S.-South Pacific

alliance is the corollary importa nce of Alaska and Horizon’s code sharing and marketing alliance

with Delta on the West Coast and, in particular, the feed traffi c both carriers exchange at the

LAX gateway. Alaska is mindful that the De partment in its Show Cause Order questioned

whether the overall public benefi ts flowing from the Delta-Sout h Pacific alliance would be

enhanced by the exchange of West Coast feed traffic between Alaska and Delta (Show Cause

Order, 2010-9-4, p. 8). In a word, the answer is yes. 3

1 Common airline names are used throughout.

2 Delta et al. filed an enhanced alliance agreement with their September 10, 2010 response to the Department’s Show Cause Order. We refer to that pending alliance agreement as the enhanced agreement.

3 Alaska, Horizon and Delta also enjoy reciprocal frequent flyer program and lounge-sharing agreements which further add to the conveniences available to the Alaska/Horizon and Delta feed traffic.Alaska and Horizon have a significant presen ce in West Coast markets. Alaska and

Horizon presently serve 29 West Coast cities. At LAX, Alaska and Horizon operate 288 weekly

flights, including new service to major West Coast and Mexico business centers. In the 12

months ended March 2010, Alaska and Horiz on enplaned 1.57 million passengers at LAX.

When Alaska and Horizon’s presence is combined with the new South Pa cific markets Delta et

al. will be serving under their enhanced South Paci fic alliance, the increase in international citypairs and in the volume of exchange traffic will n ecessarily generate greater benefits to a larger

number of passengers originatin g at or destined for cities on Alaska’s and Horizon’s route

systems.

C ONCLUSION
To be sure, the enhanced opportunity Alaska and Horizon would have to convenience

passengers traveling between the South Pacific and cities on Alaska’s and Horizon’s systems

only reflects a small portion of the overall public be nefits contemplated by Delta’s enhanced

South Pacific alliance, but that increment is nonetheless credible and realistic. Alaska and

Horizon would ask that the Department consider their West Coast exchange traffic benefits in

evaluating the enhanced alliance agreement – and fu rther ask that the Department confer antitrust

immunity as Delta et al. have requested.

Respectfully submitted,

___________________________________ Marshall S. Sinick, Esq. Squire Sanders and Dempsey, LLP 1201 Pennsylvania Ave., NW Washington, DC 20004-0407 202-626-6600 Counsel to Alaska Airlines, Inc. and Horizon Air Industries, Inc. d/b/a Horizon Air

Dated: October 22, 2010CERTIFICATE OF SERVICE

I hereby certify that copies of the foregoing An swer of Alaska Airlines, Inc. and Horizon Air Industries, Inc. d/b/a Horizon Air has th is day been served by electronic mail on the following:

sascha.vanderbellen@delta.com anita.mosner@hklaw.com carl.nelson@aa.com dan.weiss@coair.com jhill@dlalaw.com benjamin.slocum@usairways.com howard_kass@usairways.com jeffrey.manley@united.com steve.morrissey@united.com hkamen@coair.com bob.goldner@dot.gov christa.fornarotto@dot.gov christopher.mandel@dot.gov peter.irvine@dot.gov susan.kurland@dot.gov susan.mcdermott@dot.gov robert.rivkin@dot.gov todd.homan@dot.gov Jeremy.Parkinson@infrastructure.gov.au UrsKR@state.gov info@airlineinfo.com

Marshall S. Sinick, Esq.

Dated October 22, 2010