# EDGAR Filing Document

**Accession Number:** 0000766421
**File Stem:** 0000766421-25-000036
**Filing Date:** 2025-8
**Character Count:** 325685
**Document Hash:** 7dc2f7ff4cf116e0ee6f9903fca92f60
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000766421-25-000036.hdr.sgml**: 20250807

**ACCESSION NUMBER**: 0000766421-25-000036

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 83

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250807

**DATE AS OF CHANGE**: 20250807

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** ALASKA AIR GROUP, INC.
- **CENTRAL INDEX KEY:** 0000766421
- **STANDARD INDUSTRIAL CLASSIFICATION:** AIR TRANSPORTATION, SCHEDULED [4512]
- **ORGANIZATION NAME:** 01 Energy & Transportation
- **EIN:** 911292054
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-08957
- **FILM NUMBER:** 251195037

**BUSINESS ADDRESS:**
- **STREET 1:** 19300 INTERNATIONAL BOULEVARD
- **CITY:** SEATTLE
- **STATE:** WA
- **ZIP:** 98188
- **BUSINESS PHONE:** 206-392-5040

**MAIL ADDRESS:**
- **STREET 1:** 19300 INTERNATIONAL BOULEVARD
- **CITY:** SEATTLE
- **STATE:** WA
- **ZIP:** 98188

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** ALASKA AIR GROUP INC
- **DATE OF NAME CHANGE:** 19920703

?xml version='1.0' encoding='ASCII'? alk-20250630

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, DC 20549**

**FORM 10-Q** 

☒&nbsp;&nbsp;&nbsp;&nbsp;**QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the quarterly period ended June 30, 2025

OR

☐&nbsp;&nbsp;&nbsp;&nbsp;**TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

For the transition period from &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

**Commission File Number 1-8957** 

**ALASKA AIR GROUP, INC.**

---

| | |
|:---|:---|
| **Delaware** | **91-1292054** |
| (State of Incorporation) | (I.R.S. Employer Identification No.) |

---

---

| | | | |
|:---|:---|:---|:---|
| **19300 International Boulevard,** | **Seattle,** | **WA** | **98188** |

---

---

| | | |
|:---|:---|:---|
| **Telephone:** | **(206)** | **392-5040** |

---

---

| | | |
|:---|:---|:---|
| **Securities registered pursuant to Section 12(b) of the Act:** | **Securities registered pursuant to Section 12(b) of the Act:** | **Securities registered pursuant to Section 12(b) of the Act:** |
| **Title of each class** | **Ticker Symbol** | **Name of each exchange on which registered** |
| Common stock, $0.01 par value | ALK | New York Stock Exchange |

---

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange

Act.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| Large accelerated filer | ☒ | Accelerated filer | ☐ | Non-accelerated filer <br>(Do not check if a smaller reporting company) | ☐ | Smaller reporting company | ☐ | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by checkmark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): Yes ☐ No ☒

The registrant has 115,310,451 common shares, par value $0.01, outstanding at July 31, 2025.

This document is also available on our website at https://investor.alaskaair.com.

------

**ALASKA AIR GROUP, INC.**

**FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2025** 

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| <u>[PART I.](#ic139f58a4045487980242257eb71dad7_10)</u> | <u>[FINANCIAL INFORMATION](#ic139f58a4045487980242257eb71dad7_10)</u> | <u>[4](#ic139f58a4045487980242257eb71dad7_10)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[ITEM 1.](#ic139f58a4045487980242257eb71dad7_13)</u> | <u>[CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](#ic139f58a4045487980242257eb71dad7_13)</u> | <u>[4](#ic139f58a4045487980242257eb71dad7_13)</u> |
| | <u>[NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS](#ic139f58a4045487980242257eb71dad7_31)</u> | <u>[10](#ic139f58a4045487980242257eb71dad7_31)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[ITEM 2.](#ic139f58a4045487980242257eb71dad7_70)</u> | <u>[MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#ic139f58a4045487980242257eb71dad7_70)</u> | <u>[27](#ic139f58a4045487980242257eb71dad7_70)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[ITEM 3.](#ic139f58a4045487980242257eb71dad7_100)</u> | <u>[QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK](#ic139f58a4045487980242257eb71dad7_100)</u> | <u>[46](#ic139f58a4045487980242257eb71dad7_100)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[ITEM 4.](#ic139f58a4045487980242257eb71dad7_103)</u> | <u>[CONTROLS AND PROCEDURES](#ic139f58a4045487980242257eb71dad7_103)</u> | <u>[47](#ic139f58a4045487980242257eb71dad7_103)</u> |
| <u>[PART II.](#ic139f58a4045487980242257eb71dad7_106)</u> | <u>[OTHER INFORMATION](#ic139f58a4045487980242257eb71dad7_106)</u> | <u>[48](#ic139f58a4045487980242257eb71dad7_106)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[ITEM 1.](#ic139f58a4045487980242257eb71dad7_109)</u> | <u>[LEGAL PROCEEDINGS](#ic139f58a4045487980242257eb71dad7_109)</u> | <u>[48](#ic139f58a4045487980242257eb71dad7_109)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[ITEM 1A.](#ic139f58a4045487980242257eb71dad7_112)</u> | <u>[RISK FACTORS](#ic139f58a4045487980242257eb71dad7_112)</u> | <u>[48](#ic139f58a4045487980242257eb71dad7_112)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[ITEM 2.](#ic139f58a4045487980242257eb71dad7_115)</u> | <u>[UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](#ic139f58a4045487980242257eb71dad7_115)</u> | <u>[48](#ic139f58a4045487980242257eb71dad7_115)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[ITEM 3.](#ic139f58a4045487980242257eb71dad7_118)</u> | <u>[DEFAULTS UPON SENIOR SECURITIES](#ic139f58a4045487980242257eb71dad7_118)</u> | <u>[48](#ic139f58a4045487980242257eb71dad7_118)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[ITEM 4.](#ic139f58a4045487980242257eb71dad7_121)</u> | <u>[MINE SAFETY DISCLOSURES](#ic139f58a4045487980242257eb71dad7_121)</u> | <u>[48](#ic139f58a4045487980242257eb71dad7_121)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[ITEM 5.](#ic139f58a4045487980242257eb71dad7_124)</u> | <u>[OTHER INFORMATION](#ic139f58a4045487980242257eb71dad7_124)</u> | <u>[48](#ic139f58a4045487980242257eb71dad7_124)</u> |
| &nbsp;&nbsp;&nbsp;&nbsp;<u>[ITEM 6.](#ic139f58a4045487980242257eb71dad7_127)</u> | <u>[EXHIBITS](#ic139f58a4045487980242257eb71dad7_127)</u> | <u>[48](#ic139f58a4045487980242257eb71dad7_127)</u> |
| | <u>[SIGNATURES](#ic139f58a4045487980242257eb71dad7_130)</u> | <u>[50](#ic139f58a4045487980242257eb71dad7_130)</u> |

---

**As used in this Form 10-Q, the terms "Air Group," the "Company," "our," "we," and "us" refer to Alaska Air Group, Inc. and its subsidiaries, unless the context indicates otherwise. Alaska Airlines, Inc., Hawaiian Holdings, Inc., and Horizon Air Industries, Inc. are referred to as "Alaska," "Hawaiian," and "Horizon" and together as our "airlines."**

------

**CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS**

**Cautionary Note Regarding Forward-Looking Statements** 

In addition to historical information, this Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of 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. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from historical experience or the Company's present expectations.

You should not place undue reliance on our forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control. Our forward-looking statements are based on the information currently available to us and speak only as of the date on which this report was filed with the SEC. Other than as required by law, we expressly disclaim any obligation to issue any updates or revisions to our forward-looking statements, even if subsequent events cause our expectations to change regarding the matters discussed in those statements. For a discussion of risks and uncertainties that may cause our forward-looking statements to differ materially, see Item 1A. "Risk Factors" within the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Some of these risks include competition, labor costs, relations, and availability, general economic conditions, increases in operating costs including fuel, uncertainties regarding the ability to successfully integrate the operations of the recently completed acquisition of Hawaiian Holdings, Inc. and the ability to realize anticipated cost savings, synergies, or growth from the acquisition, inability to meet cost reduction and other strategic goals, seasonal fluctuations in demand and financial results, supply chain risks, events that negatively impact aviation safety and security, cybersecurity risks, and changes in laws and regulations that impact our business. Please consider our forward-looking statements in light of those risks as you read this report.

------

**PART I** 

**ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**

**ALASKA AIR GROUP, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS *(unaudited)***

---

| | | |
|:---|:---|:---|
| ***(in millions)*** | **June 30, 2025** | **December 31, 2024** |
| **ASSETS** | | |
| **Current Assets** | | |
| Cash and cash equivalents | $**750** | $1201 |
| Restricted cash | **28** | 29 |
| Marketable securities | **1374** | 1274 |
| &nbsp;&nbsp;Total cash, restricted cash, and marketable securities | **2152** | 2504 |
| Receivables - net | **737** | 558 |
| Inventories and supplies - net | **218** | 199 |
| Prepaid expenses | **264** | 307 |
| Other current assets | **136** | 192 |
| **Total Current Assets** | **3507** | 3760 |
| **Property and Equipment** |  |  |
| Aircraft and other flight equipment | **13056** | 12273 |
| Other property and equipment | **2267** | 2173 |
| Deposits for future flight equipment | **621** | 883 |
|  | **15944** | 15329 |
| Less accumulated depreciation and amortization | **(4729)** | (4548) |
| **Total Property and Equipment - Net** | **11215** | 10781 |
| **Other Assets** |  |  |
| Operating lease assets | **1279** | 1296 |
| Goodwill | **2724** | 2724 |
| Intangible assets - net | **844** | 873 |
| Other noncurrent assets | **316** | 334 |
| **Total Other Assets** | **5163** | 5227 |
| **Total Assets** | $**19885** | $19768 |

---

------

**CONDENSED CONSOLIDATED BALANCE SHEETS *(unaudited)***

---

| | | |
|:---|:---|:---|
| ***(in millions, except share amounts)*** | **June 30, 2025** | **December 31, 2024** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** | | |
| **Current Liabilities** | | |
| Accounts payable | $**240** | $186 |
| Accrued wages, vacation and payroll taxes | **697** | 1001 |
| Air traffic liability | **2127** | 1712 |
| Other accrued liabilities | **1096** | 997 |
| Deferred revenue | **1824** | 1592 |
| Current portion of long-term debt | **500** | 442 |
| Current portion of operating lease liabilities | **217** | 207 |
| Current portion of finance lease liabilities | **8** | 8 |
| **Total Current Liabilities** | **6709** | 6145 |
| **Noncurrent Liabilities** |  |  |
| Long-term debt, net of current portion | **4448** | 4491 |
| Operating lease liabilities, net of current portion | **1157** | 1198 |
| Finance lease liabilities, net of current portion | **43** | 47 |
| Deferred income taxes | **938** | 934 |
| Deferred revenue | **1648** | 1664 |
| Obligation for pension and post-retirement medical benefits | **452** | 460 |
| Other liabilities | **548** | 457 |
| **Total Noncurrent Liabilities** | **9234** | 9251 |
| **Commitments and Contingencies (Note 7)** |  |  |
| **Shareholders' Equity** |  |  |
| &nbsp;&nbsp;Preferred stock, $0.01 par value, Authorized: 5,000,000 shares, none issued or outstanding | **—** |  |
| &nbsp;&nbsp;Common stock, $0.01 par value, Authorized: 400,000,000 shares, Issued: 2025 - 144,093,405 shares; 2024 - 141,449,174 shares, Outstanding: 2025 - 115,276,005 shares; 2024 - 123,119,199 shares | **1** | 1 |
| &nbsp;&nbsp;&nbsp;Capital in excess of par value | **899** | 811 |
| &nbsp;&nbsp;Treasury stock (common), at cost: 2025 - 28,817,400 shares; 2024 - 18,329,975 shares | **(1666)** | (1131) |
| Accumulated other comprehensive loss | **(228)** | (239) |
| Retained earnings | **4936** | 4930 |
| **Total Shareholders' Equity** | **3942** | 4372 |
| **Total Liabilities and Shareholders' Equity** | $**19885** | $19768 |

---

------

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS *(unaudited)***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | &nbsp;&nbsp;&nbsp;**Six Months Ended June 30,** | &nbsp;&nbsp;&nbsp;**Six Months Ended June 30,** |
| ***(in millions, except per share amounts)*** | **2025** | **2024** | **2025** | **2024** |
| **Operating Revenue** |  |  |  |  |
| Passenger revenue | $**3355** | $2651 | $**6163** | $4655 |
| Loyalty program other revenue | **210** | 174 | **417** | 338 |
| Cargo and other revenue | **139** | 72 | **261** | 136 |
| **Total Operating Revenue** | **3704** | 2897 | **6841** | 5129 |
| **Operating Expenses** |  |  |  |  |
| Wages and benefits | **1165** | 782 | **2292** | 1586 |
| Variable incentive pay | **61** | 49 | **123** | 93 |
| Aircraft fuel, including hedging gains and losses | **700** | 615 | **1381** | 1180 |
| Aircraft maintenance | **240** | 129 | **460** | 251 |
| Aircraft rent | **64** | 46 | **126** | 93 |
| Landing fees and other rentals | **278** | 173 | **520** | 338 |
| Contracted services | **146** | 106 | **291** | 203 |
| Selling expenses | **105** | 84 | **205** | 161 |
| Depreciation and amortization | **199** | 128 | **393** | 254 |
| Food and beverage service | **97** | 67 | **182** | 125 |
| Third-party regional carrier expense | **69** | 64 | **133** | 118 |
| Other | **247** | 186 | **508** | 391 |
| Special items - operating | **56** | 146 | **147** | 180 |
| **Total Operating Expenses** | **3427** | 2575 | **6761** | 4973 |
| **Operating Income** | **277** | 322 | **80** | 156 |
| **Non-operating Income (Expense)** |  |  |  |  |
| Interest income | **22** | 24 | **48** | 41 |
| Interest expense | **(66)** | (36) | **(132)** | (71) |
| Interest capitalized | **9** | 6 | **21** | 12 |
| Other - net | **(4)** |  | **(12)** |  |
| **Total Non-operating Expense** | **(39)** | (6) | **(75)** | (18) |
| **Income Before Income Tax** | **238** | 316 | **5** | 138 |
| Income tax expense (benefit) | **66** | 96 | **(1)** | 50 |
| **Net Income** | $**172** | $220 | $**6** | $88 |
| **Basic Earnings Per Share:** | $**1.45** | $1.74 | $**0.05** | $0.70 |
| **Diluted Earnings Per Share:** | $**1.42** | $1.71 | $**0.05** | $0.69 |
| Weighted Average Shares Outstanding used for computation: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | **118.847** | 126.337 | **120.979** | 126.153 |
| &nbsp;&nbsp;&nbsp;Diluted | **120.930** | 128.310 | **123.183** | 127.857 |

---

------

**CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS *(unaudited)***

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | &nbsp;&nbsp;&nbsp;**Six Months Ended June 30,** | &nbsp;&nbsp;&nbsp;**Six Months Ended June 30,** |
| ***(in millions)*** | **2025** | **2024** | **2025** | **2024** |
| **Net Income** | $**172** | $220 | $**6** | $88 |
| Other comprehensive income (loss), net of tax |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Marketable securities | **6** | 4 | **15** | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;Employee benefit plans | **2** | 3 | **4** | 6 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest rate derivative instruments | **(2)** |  | **(8)** | 1 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total other comprehensive income, net of tax | $**6** | $7 | $**11** | $12 |
| **Total Comprehensive Income, Net of Tax** | $**178** | $227 | $**17** | $100 |

---

------

**CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY *(unaudited)***

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| ***(in millions)*** | ***Common Stock Outstanding*** | **Common Stock** | **Capital in Excess of Par Value** | **Treasury Stock** | **Accumulated Other Comprehensive Loss** | **Retained Earnings** | **Total** |
| **Balance at December 31, 2024** | ***123.119*** | $**1** | $**811** | $**(1131)** | $**(239)** | $**4930** | $**4372** |
| Net loss | **—** |  |  |  |  | (166) | (166) |
| Other comprehensive income | **—** |  |  |  | 5 |  | 5 |
| Common stock repurchase | *(1.766)* |  |  | (107) |  |  | (107) |
| Stock-based compensation | *0.005* |  | 22 |  |  |  | 22 |
| CARES Act warrants exercised | *0.810* |  |  |  |  |  |  |
| Stock issued under stock plans | *0.717* |  | 11 |  |  |  | 11 |
| **Balance at March 31, 2025** | ***122.885*** | $**1** | $**844** | $**(1238)** | $**(234)** | $**4764** | $**4137** |
| Net income |  |  |  |  |  | 172 | 172 |
| Other comprehensive income |  |  |  |  | 6 |  | 6 |
| Common stock repurchase | *(8.721)* |  |  | (428) |  |  | (428) |
| Stock-based compensation | *0.009* |  | 17 |  |  |  | 17 |
| Stock issued for employee stock purchase plan | *1.023* |  | 39 |  |  |  | 39 |
| Stock issued under stock plans | *0.080* |  | (1) |  |  |  | (1) |
| **Balance at June 30, 2025** | ***115.276*** | $**1** | $**899** | $**(1666)** | $**(228)** | $**4936** | $**3942** |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| ***(in millions)*** | ***Common Stock Outstanding*** | **Common Stock** | **Capital in Excess of Par Value** | **Treasury Stock** | **Accumulated Other Comprehensive Loss** | **Retained Earnings** | **Total** |
| **Balance at December 31, 2023** | ***126.090*** | $**1** | $**695** | $**(819)** | $**(299)** | $**4535** | $**4113** |
| Net loss |  |  |  |  |  | (132) | (132) |
| Other comprehensive income |  |  |  |  | 5 |  | 5 |
| Common stock repurchase | *(0.561)* |  |  | (21) |  |  | (21) |
| Stock-based compensation | *—* |  | 15 |  |  |  | 15 |
| Stock issued under stock plans | *0.177* |  | (3) |  |  |  | (3) |
| **Balance at March 31, 2024** | ***125.706*** | $**1** | $**707** | $**(840)** | $**(294)** | $**4403** | $**3977** |
| Net income |  |  |  |  |  | 220 | 220 |
| Other comprehensive income |  |  |  |  | 7 |  | 7 |
| Common stock repurchase | *(0.663)* |  |  | (28) |  |  | (28) |
| Stock-based compensation | *0.013* |  | 13 |  |  |  | 13 |
| Stock issued for employee stock purchase plan | *1.401* |  | 37 |  |  |  | 37 |
| Stock issued under stock plans | *0.018* |  |  |  |  |  |  |
| **Balance at June 30, 2024** | ***126.475*** | $**1** | $**757** | $**(868)** | $**(287)** | $**4623** | $**4226** |

---

------

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS *(unaudited)***

---

| | | |
|:---|:---|:---|
| | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| ***(in millions)*** | **2025** | **2024** |
| **Cash Flows from Operating Activities:** |  |  |
| Net Income | $**6** | $88 |
| Adjustments to reconcile net income to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | **393** | 254 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation and other | **10** | 37 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash special items | **52** |  |
| Changes in certain assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Changes in deferred income taxes | **1** | 47 |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in accounts receivable | **(171)** | (55) |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in air traffic liability | **415** | 440 |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase in deferred revenue | **216** | 38 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other - net | **(87)** | 23 |
| **Net cash provided by operating activities** | **835** | 872 |
| **Cash Flows from Investing Activities:** |  |  |
| Property and equipment additions |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Aircraft and aircraft purchase deposits | **(523)** | (380) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other flight equipment | **(90)** | (63) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other property and equipment | **(128)** | (144) |
| Supplier proceeds | **—** | 162 |
| Purchases of marketable securities | **(844)** | (163) |
| Sales and maturities of marketable securities | **765** | 288 |
| Other investing activities | **73** | 165 |
| **Net cash used in investing activities** | **(747)** | (135) |
| **Cash Flows from Financing Activities:** |  |  |
| Proceeds from issuance of long-term debt, net of issuance costs | **168** | 279 |
| Long-term debt payments | **(236)** | (149) |
| Common stock repurchases | **(535)** | (49) |
| Other financing activities | **59** | 6 |
| **Net cash provided by (used in) financing activities** | **(544)** | 87 |
| Net (decrease) increase in cash and cash equivalents | **(456)** | 824 |
| Cash, cash equivalents, and restricted cash at beginning of period | **1257** | 308 |
| **Cash, cash equivalents, and restricted cash at end of the period** | $**801** | $1132 |
| **Supplemental disclosure:** |  |  |
| Cash paid during the period for: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest, net of amount capitalized | $**108** | $55 |
| Non-cash transactions: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets acquired through operating leases | $**74** | $34 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property and equipment acquired through the issuance of debt | $**69** | $68 |
| **Reconciliation of cash, cash equivalents, and restricted cash:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | $**750** | $1115 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | **28** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash included in Other noncurrent assets | **23** | 17 |
| **Total cash, cash equivalents, and restricted cash at end of the period** | $**801** | $1132 |

---

------

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS *(unaudited)***

**NOTE 1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Organization and basis of presentation***

The unaudited condensed consolidated financial statements include the accounts of Alaska Air Group (Air Group, or "the Company"), and its primary subsidiaries, Alaska Airlines, Inc. (Alaska), Horizon Air Industries, Inc. (Horizon), and, beginning September 18, 2024, Hawaiian Holdings, Inc. (Hawaiian). The unaudited condensed consolidated financial statements also include McGee Air Services (McGee), a ground services subsidiary of Alaska, and other immaterial business units. All intercompany balances and transactions have been eliminated. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") for interim financial information. Consistent with these requirements, this Form 10-Q does not include all the information required by GAAP for complete financial statements. It should be read in conjunction with the consolidated financial statements and accompanying notes in the Form 10-K for the year ended December 31, 2024. In the opinion of management, all adjustments have been made that are necessary to fairly present the Company's financial position as of June 30, 2025 and the results of operations for the three and six months ended June 30, 2025 and 2024. Such adjustments were of a normal recurring nature. Certain rows, columns, figures, or percentages may not recalculate due to rounding.

In preparing these statements, the Company is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities, as well as the reported amounts of revenue and expenses, including impairment charges. Due to seasonal variations in the demand for air travel, the volatility of aircraft fuel prices, changes in global economic conditions, changes in the competitive environment, and other factors, operating results for the three and six months ended June 30, 2025 are not necessarily indicative of operating results for the entire year.

**NOTE 2. ACQUISITION OF HAWAIIAN HOLDINGS, INC.**

On September 18, 2024, the Company completed its acquisition of Hawaiian Holdings, Inc. The Company paid shareholders $18.00 per share, or approximately $936 million in cash for 52 million outstanding voting shares of Hawaiian. An additional $41 million was paid in cash for change in control payments and settlement of accelerated and vested awards, resulting in total consideration of $977 million. The combination brings together two complementary networks and expands consumer choice across Hawai'i, the West Coast, and international destinations. Along with enhanced network utility, the combined carriers' diversified product offerings and focus on high quality service and operational performance enhance Air Group's competitive position.

***Fair values of the assets acquired and the liabilities assumed***

The transaction has been accounted for as a business combination using the acquisition method of accounting, which requires, among other things, that assets acquired and liabilities assumed be recognized on the balance sheet at their fair values as of the acquisition date. The fair values of the assets acquired and liabilities assumed were determined using a market basis, relief from royalty, or multi-period excess earnings approach. As of June 30, 2025, the determination of fair values of property and equipment, certain liabilities included in other accrued liabilities and other liabilities, goodwill, intangible assets, and deferred income taxes was substantially complete, but is still considered provisional. Management will evaluate estimates and assumptions utilized to calculate fair value as new information is received, and will adjust amounts recorded as necessary up to one year following transaction close. There were no fair value adjustments made in the three and six months ended June 30, 2025.

------

Provisional fair values of the assets acquired and the liabilities assumed as of the acquisition date, September 18, 2024, as of June 30, 2025 and December 31, 2024 were as follows:

---

| | |
|:---|:---|
|  ***(in millions)*** | **June 30, 2025 and** <br>**December 31, 2024** |
| Cash and cash equivalents | $286 |
| Restricted cash | 27 |
| Marketable securities | 674 |
| Receivables | 110 |
| Inventories and supplies | 75 |
| Prepaid expenses and other | 77 |
| Property and equipment | 1947 |
| Operating lease assets | 228 |
| Intangible assets | 799 |
| Goodwill | 781 |
| Other noncurrent assets | 97 |
| **Total assets** | 5101 |
| Accounts payable | 57 |
| Air traffic liability | 513 |
| Other accrued liabilities | 331 |
| Deferred revenue - current | 229 |
| Current portion of operating lease liabilities | 65 |
| Current portion of long-term debt and finance leases | 144 |
| Long-Term Debt, net of current portion | 1932 |
| Long-term operating lease liabilities, net of current portion | 234 |
| Deferred income taxes | 90 |
| Deferred revenue - noncurrent | 308 |
| Obligations for pension and post-retirement medical benefits | 153 |
| Other liabilities | 68 |
| **Total liabilities** | 4124 |
| **Total purchase price** | $977 |

---

***Merger-related costs***

The Company incurred pretax merger-related costs of $53 million and $30 million for the three months ended June 30, 2025 and 2024, respectively, and $93 million and $38 million, for the six months ended June 30, 2025 and 2024, respectively. These costs are presented within Special items - operating within the unaudited condensed consolidated statements of operations. Refer to Note 12 for further information on special items. The Company expects to incur additional merger-related costs in 2025.

***Pro forma impact of the acquisition***

The unaudited pro forma financial information presented in the table below represents a summary of the consolidated results of operations for the Company and Hawaiian as if the acquisition of Hawaiian had been consummated as of January 1, 2023. The pro forma results do not include any anticipated synergies, or other expected benefits of the acquisition. Accordingly, the unaudited pro forma financial information below is not necessarily indicative of either future results of operations or results that might have been achieved had the acquisition been consummated as of January 1, 2023.

The pro forma information includes adjustments for merger-related costs of $320 million assumed to have been incurred on January 1, 2023.

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| ***(in millions)*** | **2025 Pro Forma** | **2024 Pro Forma** | **2025 Pro Forma** | **2024 Pro Forma** |
| Revenue | $**3704** | $3629 | $**6841** | $6506 |
| Net income (loss) | **210** | 171 | **72** | (96) |

---

**NOTE 3. REVENUE**

Ticket revenue is recorded as Passenger revenue, and represents the primary source of the Company's revenue. Also included in Passenger revenue is passenger ancillary revenue such as bag fees, on-board food and beverage, and certain revenue from Alaska's Mileage Plan program and Hawaiian's HawaiianMiles program. Loyalty program other revenue includes brand and marketing revenue from the Alaska Airlines Visa Signature and Hawaiian Airlines World Elite Mastercard co-branded credit cards and other partners, and certain interline loyalty program revenue, net of commissions. Cargo and other revenue consists of freight and mail revenue, services provided to Amazon under the Air Transportation Services Agreement (the ATSA), and other ancillary revenue products such as lounge membership and certain commissions.

The level of detail within the Company's unaudited condensed consolidated statements of operations and in this note depict the nature, amount, timing, and uncertainty of revenue and how cash flows are affected by economic and other factors.

Certain prior period amounts in this note have been revised by an immaterial amount to reflect the appropriate classification of receivables.

**Passenger Revenue**

Passenger revenue recognized in the unaudited condensed consolidated statements of operations:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| ***(in millions)*** | **2025** | **2024** | **2025** | **2024** |
| Passenger ticket revenue, net of taxes and fees | $**2832** | $2226 | $**5184** | $3874 |
| Passenger ancillary revenue | **162** | 135 | **302** | 243 |
| Loyalty program passenger revenue | **361** | 290 | **677** | 538 |
| &nbsp;&nbsp;&nbsp;**Total Passenger revenue** | $**3355** | $2651 | $**6163** | $4655 |

---

Domestic passenger revenue includes operations in the U.S., including between the Hawaiian Islands (the Neighbor Island routes), and Canada. Latin America passenger revenue includes operations in Mexico, Costa Rica, Guatemala, Belize, and Bahamas. Pacific passenger revenue includes operations in the South Pacific, Australia, New Zealand, and Asia.

The table below presents the Company's passenger revenue by principal geographic region (as defined by the U.S. Department of Transportation):

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---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| ***(in millions)*** | **2025** | **2024** | **2025** | **2024** |
| Domestic | $**3061** | $2490 | $**5523** | $4295 |
| Latin America | **166** | 161 | **380** | 360 |
| Pacific | **128** |  | **260** |  |
| &nbsp;&nbsp;&nbsp;**Total Passenger revenue** | $**3355** | $2651 | $**6163** | $4655 |

---

**Loyalty Program Revenue**

Loyalty program revenue included in the unaudited condensed consolidated statements of operations:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| ***(in millions)*** | **2025** | **2024** | **2025** | **2024** |
| Loyalty program passenger revenue | $**361** | $290 | $**677** | $538 |
| Loyalty program other revenue | **210** | 174 | **417** | 338 |
| &nbsp;&nbsp;&nbsp;**Total Loyalty program revenue** | $**571** | $464 | $**1094** | $876 |

---

**Cargo and Other Revenue**

Cargo and other revenue included in the unaudited condensed consolidated statements of operations:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| ***(in millions)*** | **2025** | **2024** | **2025** | **2024** |
| Cargo revenue | $**67** | $36 | $**124** | $64 |
| Other revenue | **72** | 36 | **137** | 72 |
| &nbsp;&nbsp;&nbsp;**Total Cargo and other revenue** | $**139** | $72 | $**261** | $136 |

---

**Air Traffic Liability and Deferred Revenue**

***Passenger ticket and ancillary services liabilities***

The Company recognized Passenger revenue of $228 million and $150 million from the prior year-end air traffic liability balance for the three months ended June 30, 2025 and 2024, and $1.1 billion and $717 million from the prior year-end traffic liability balance for the six months ended June 30, 2025 and 2024.

***Loyalty program assets and liabilities***

The Company records a receivable for amounts due from affinity card partners and from other partners as mileage credits are sold until the payments are collected. The Company had $306 million of such receivables as of June 30, 2025 and $176 million as of December 31, 2024.

The table below presents a roll forward of the total loyalty program liability:

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| | | |
|:---|:---|:---|
| | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| ***(in millions)*** | **2025** | **2024** |
| **Total Deferred Revenue balance at January 1** | $**3256** | $2603 |
| Travel miles and companion certificate redemption - Passenger revenue | **(655)** | (508) |
| Miles redeemed on partner airlines - Loyalty program other revenue | **(119)** | (67) |
| Increase in liability for mileage credits issued | **990** | 613 |
| **Total Deferred Revenue balance at June 30** | $**3472** | $2641 |

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**NOTE 4. FAIR VALUE MEASUREMENTS**

In determining fair value, there is a three-level hierarchy based on the reliability of the inputs used.

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Level 1 refers to fair values based on quoted prices for identical instruments in active markets.

Level 2 refers to fair values estimated using significant other observable inputs such as similar instruments in active markets or quoted prices for identical or similar instrument in markets that are not active. Fair values for Level 2 instruments are determined using standard valuation models that incorporate inputs such as quoted prices for similar assets, interest rates, benchmark curves, credit ratings, and other observable inputs or market data.

Level 3 refers to fair values estimated using significant unobservable inputs for which there is little or no market data and that are significant to the fair value of the assets. Fair values for Level 3 instruments are determined using future cash flows and discount rates, which include information obtained from third-party valuation sources and other market sources, including recent offers from potential buyers.

***Fair value of financial instruments measured on a recurring basis***

As of June 30, 2025, cost basis and fair value for marketable securities were $1.4 billion. Differences in cost basis and fair value of marketable securities are primarily a result of changes in interest rates and general market conditions. The Company does not believe any unrealized losses are the result of credit quality based on its evaluation of industry and duration exposure, credit ratings of the securities, liquidity profiles, and other observable information as of June 30, 2025.

Fair values of financial instruments on the unaudited condensed consolidated balance sheets:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
| ***(in millions)*** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Assets** | | | | |
| Marketable securities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. government and agency securities | $**342** | $**—** | $**—** | $**342** |
| &nbsp;&nbsp;&nbsp;Equity mutual funds | **7** | **—** | **—** | **7** |
| &nbsp;&nbsp;&nbsp;Asset-backed securities | **—** | **194** | **3** | **197** |
| &nbsp;&nbsp;&nbsp;Mortgage-backed securities | **—** | **197** | **—** | **197** |
| &nbsp;&nbsp;&nbsp;Corporate notes and bonds | **—** | **615** | **—** | **615** |
| &nbsp;&nbsp;&nbsp;Municipal securities and other | **—** | **16** | **—** | **16** |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Marketable securities** | $**349** | $**1022** | $**3** | $**1374** |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| ***(in millions)*** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Assets** | | | | |
| Marketable securities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;U.S. government and agency securities | $292 | $— | $— | $292 |
| &nbsp;&nbsp;&nbsp;Equity mutual funds | 7 |  |  | 7 |
| &nbsp;&nbsp;&nbsp;Asset-backed securities |  | 127 | 7 | 134 |
| &nbsp;&nbsp;&nbsp;Mortgage-backed securities |  | 112 |  | 112 |
| &nbsp;&nbsp;&nbsp;Corporate notes and bonds |  | 696 | 2 | 698 |
| &nbsp;&nbsp;Municipal securities and other |  | 31 |  | 31 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total Marketable securities** | $299 | $966 | $9 | $1274 |

---

The fair value of derivative instruments, including fuel hedge contracts and interest rate swaps, was not material as of June 30, 2025 and December 31, 2024.

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***Activity and maturities for marketable securities***

Maturities for marketable securities:

---

| | | |
|:---|:---|:---|
| **June 30, 2025 *(in millions)*** | **Cost Basis** | **Fair Value** |
| Due in one year or less | $285 | $285 |
| Due after one year through five years | 933 | 933 |
| Due after five years through ten years | 144 | 144 |
| Due after ten years | 6 | 5 |
| No maturity date | 5 | 7 |
| &nbsp;&nbsp;&nbsp;**Total** | $1373 | $1374 |

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***Fair value of other financial instruments***

The Company uses the following methods and assumptions to determine the fair value of financial instruments that are not recognized at fair value as described below.

*Debt*: The estimated fair value of fixed-rate Enhanced Equipment Trust Certificate (EETC) debt and certain variable rate debt is Level 2, while the estimated fair value of $712 million of certain variable-rate and fixed-rate debt, including PSP notes payable and Japanese Yen denominated debt, is classified as Level 3.

Fixed-rate debt on the unaudited condensed consolidated balance sheets and the estimated fair value of long-term fixed-rate debt:

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| | | |
|:---|:---|:---|
| ***(in millions)*** | **June 30, 2025** | **December 31, 2024** |
| Fixed-rate debt | $**2868** | $2946 |
| Estimated fair value | $**2806** | $2844 |

---

***Assets and liabilities measured at fair value on a nonrecurring basis***

Certain assets and liabilities are recognized or disclosed at fair value on a nonrecurring basis, including property, plant and equipment, operating and finance lease assets, goodwill, and intangible assets. These assets are subject to fair valuation when there is evidence of impairment. No material impairments were recorded during the three and six months ended June 30, 2025.

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**NOTE 5. DEBT**

Debt obligations on the unaudited condensed consolidated balance sheets:

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| | | |
|:---|:---|:---|
| ***(in millions)*** | **June 30, 2025** | **December 31, 2024** |
| Fixed-rate notes payable due through 2037 | $**127** | $56 |
| Fixed-rate PSP notes payable due through 2031 | **629** | 688 |
| Fixed-rate EETCs payable due through 2027 | **801** | 864 |
| Fixed-rate Japanese Yen denominated notes payable due through 2031 | **61** | 88 |
| Variable-rate PSP notes payable due through 2030 | **61** |  |
| Variable-rate notes payable due through 2037 | **1316** | 1283 |
| Loyalty financing, variable-rate term loan facility due through 2031 | **746** | 750 |
| Loyalty financing, fixed-rate notes due through 2031 | **1250** | 1250 |
| Less debt issuance costs | **(43)** | (46) |
| &nbsp;&nbsp;&nbsp;**Total debt** | **4948** | 4933 |
| Less current portion | **500** | 442 |
| &nbsp;&nbsp;&nbsp;**Long-term debt, less current portion** | $**4448** | $4491 |
| Weighted-average fixed-interest rate | **4.0%** | 3.9% |
| Weighted-average variable-interest rate | **6.0%** | 6.3% |

---

In the second quarter, interest rates on certain PSP debt were adjusted from a fixed-rate to a variable-rate, in accordance with the terms of the loan agreement. Approximately $535 million of the Company's total variable-rate notes payable are effectively fixed via interest rate swaps at June 30, 2025, resulting in an effective weighted-average interest rate for the full debt portfolio of 4.8%.

During the six months ended June 30, 2025, the Company incurred debt of $237 million from multiple lenders and sources. New debt includes proceeds of $168 million, secured by aircraft. Additionally, $69 million was incurred as part of an agreement to finance certain E175 deliveries. Debt from the E175 financing is reflected as a non-cash transaction within the supplemental disclosures in the unaudited condensed consolidated statements of cash flows. During the six months ended June 30, 2025, the Company made debt payments of $236 million.

Subsequent to quarter end, the Company incurred additional debt of $154 million, secured by aircraft. Additionally, the Company, through a wholly-owned subsidiary, amended its variable rate term loan facility, secured by assets associated with Alaska's Mileage Plan program. The amendment provides for a repricing of the loans under the facility.

***Debt maturity***

At June 30, 2025, debt principal payments for the next five years and thereafter are as follows:

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| | |
|:---|:---|
| ***(in millions)*** | **Total** |
| Remainder of 2025 | $217 |
| 2026 | 520 |
| 2027 | 719 |
| 2028 | 241 |
| 2029 | 795 |
| Thereafter | 2525 |
| &nbsp;&nbsp;**Total Principal Payments**<sup>(a)</sup> | $5017 |

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(a) The Company recognized the long-term debt assumed in the Hawaiian acquisition at fair value as of the acquisition date. As a result, the amount in the unaudited condensed consolidated balance sheets will not equal the total balance of remaining principal payments presented in this table.

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***Bank lines of credit***

Alaska and Hawaiian have a combined revolving credit facility for $850 million, expiring in September 2029, which is secured by a combination of aircraft, slots, gates, routes, and other eligible assets. The facility has a variable interest rate based on SOFR plus a specified margin. As of June 30, 2025, the Company had no outstanding borrowing under this facility.

In June 2025, Alaska and Hawaiian entered into an agreement to renew and upsize a second credit facility with multiple lenders. This facility is for $106 million, expires in June 2027, and is secured by aircraft. Letters of credit have been secured against this facility.

***Covenants***

Certain debt agreements and credit facilities contain customary financial covenants, including compliance with certain debt service coverage ratios and minimum liquidity requirements. The Company and its subsidiaries were in compliance with these covenants as of June 30, 2025.

**NOTE 6. EMPLOYEE BENEFIT PLANS**

Net periodic benefit costs for qualified pension plans include the following:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| ***(in millions)*** | **2025** | **2024** | **2025** | **2024** |
| Service cost | $**7** | $7 | $**14** | $14 |
| &nbsp;&nbsp;&nbsp;**Pension expense included in Wages and benefits** | **7** | 7 | **14** | 14 |
| Interest cost | **32** | 27 | **65** | 54 |
| Expected return on assets | **(37)** | (32) | **(74)** | (64) |
| Recognized actuarial loss | **3** | 4 | **6** | 9 |
| &nbsp;&nbsp;&nbsp;**Pension expense included in Non-operating Income (Expense)** | $**(2)** | $(1) | $**(3)** | $(1) |

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**NOTE 7. COMMITMENTS AND CONTINGENCIES**

***Aircraft-related commitments***

Alaska and Hawaiian have contractual commitments for aircraft with Boeing. Horizon has contractual commitments for aircraft with Embraer. The amounts disclosed below reflect commitments for firm aircraft and engine orders. Option deliveries are excluded until exercise.

In the second quarter of 2025, twelve options were exercised for B737-10 aircraft, with contracted delivery dates in 2026 and 2027. Five options were added for B787-9 aircraft, with delivery dates in 2031 and 2032.

Boeing has communicated that certain B737 and B787-9 aircraft are expected to be delivered later than the contracted delivery timing. For Alaska, this includes certain B737-8 aircraft contracted for delivery in 2025 that have moved later in the contracted year or into 2026, and B737-10 aircraft contracted for delivery between 2025 and 2027 that have moved to between 2027 and 2029, pending certification of the aircraft type. For Hawaiian, this includes certain B787-9 aircraft contracted for delivery between 2025 and 2026 that have moved to between later in 2025 and 2027. Management expects that other Boeing aircraft deliveries could be delayed beyond the contractual delivery. The tables below reflect Boeing's communications and management's internal expectations.

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Details for contractual aircraft delivery commitments as of June 30, 2025:

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| | | |
|:---|:---|:---|
| | **Firm Orders** | **Options and Other Rights** |
| **Aircraft Type** | **2025-2029** | **2027-2032** |
| B737 | 75 | 88 |
| B787-9 | 8 | 5 |
| E175 | 3 |  |
| **Total** | 86 | 93 |

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***Capacity purchase agreement (CPA) commitments***

Alaska has obligations associated with its CPA with SkyWest. The amounts disclosed below consider certain assumptions regarding the level of flying performed by the carrier on behalf of Alaska and exclude lease costs associated with the CPA.

A summary of aircraft-related and capacity purchase agreement commitments as of June 30, 2025:

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| | | |
|:---|:---|:---|
| ***(in millions)*** | **Aircraft-Related Commitments** | **Capacity Purchase Agreements** |
| Remainder of 2025 | $451 | $102 |
| 2026 | 627 | 207 |
| 2027 | 2170 | 213 |
| 2028 | 1286 | 219 |
| 2029 |  | 224 |
| Thereafter |  | 283 |
| &nbsp;&nbsp;&nbsp;**Total** | $4534 | $1248 |

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***Contingencies***

The Company is a party to routine litigation matters incidental to its business and with respect to which no material liability is expected. Liabilities for litigation related contingencies are recorded when a loss is determined to be probable and estimable.

As part of the 2016 acquisition of Virgin America, Alaska assumed responsibility for the Virgin trademark license agreement with the Virgin Group. In 2019, pursuant to that agreement's venue provision, the Virgin Group sued Alaska in England, alleging that the agreement requires Alaska to pay $8 million per year as a minimum annual royalty through 2039, adjusted annually for inflation and irrespective of Alaska's actual use (or non-use) of the mark. Alaska stopped making royalty payments in 2019 after ending all use of the Virgin brand. On February 16, 2023, the commercial court issued a ruling adopting Virgin Group's interpretation of the license agreement. The Company appealed the decision. On June 11, 2024, the appellate court issued a final decision affirming the lower court ruling in favor of the Virgin Group. Alaska also commenced a separate claim for breach of the agreement against the Virgin Group that may affect the Company's total liability in the matter. Alaska holds an accrual for $61 million in Other accrued liabilities in the unaudited condensed consolidated balance sheets, representing the expenses associated with the trademark license agreement incurred through June 30, 2025, and management's current estimate of the amount due to the Virgin Group.

***Credit card agreements***

Alaska and Hawaiian have agreements with certain credit card companies to process the sale of tickets and other services. Under these agreements, there are material adverse change clauses that, if triggered, could result in the credit card companies holding back a reserve of up to 100% of the credit card receivable balance associated with that processor, which would result in a restriction of cash. For example, certain agreements require Alaska to maintain a reserve if Air Group's credit rating is downgraded to or below a rating specified by the agreement or if its cash and marketable securities balance fell below $500 million. The Company is not currently required to maintain any reserve under these agreements. If Air Group were unable to obtain a waiver of, or otherwise mitigate the increase in the restriction of cash, it could have a material impact on the Company's operations, business or financial condition.

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**NOTE 8. SHAREHOLDERS' EQUITY**

***Common stock repurchase***

In December 2024, the Board of Directors authorized a $1 billion share repurchase program. Under this program, the Company repurchased 10.5 million shares for $535 million during the six months ended June 30, 2025. As of June 30, 2025, the program has $465 million remaining. Under the previous share repurchase program, the Company repurchased 1.2 million shares for $49 million during the six months ended June 30, 2024.

***CARES Act warrant issuances***

As taxpayer protection required under the Payroll Support Program (PSP) under the CARES Act, the Company granted the U.S. government a total of 1,455,437 warrants to purchase ALK common stock in 2020 and 2021. An additional 427,080 warrants were issued in conjunction with a draw on the CARES Act Loan in 2020. The value of the warrants was estimated using a Black-Scholes option pricing model and was recorded in stockholders' equity at issuance. These warrants are non-voting, freely transferable, may be settled as net shares or in cash at the Company's option, and have a five-year term. In 2024, the warrants were sold at auction to a third party investor. The sale had no impact to the amount held on the Company's balance sheet.

In the first quarter of 2025, 1,660,705 of the warrants were exercised, with an exercise price of $31.61 for 1,355,206 warrants and $52.25 for 305,499 warrants, in a net share settlement for 809,768 shares of ALK common stock. As of June 30, 2025, there were 221,812 warrants outstanding, at an exercise price of $66.39.

**NOTE 9. EARNINGS PER SHARE**

Basic earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is calculated by dividing net income by the weighted average number of common shares outstanding, including the dilutive effect of outstanding share-based instruments such as employee stock awards and warrants.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| ***(in millions, except per share amounts)*** | **2025** | **2024** | **2025** | **2024** |
| Net income | $**172** | $220 | $**6** | $88 |
| Basic weighted average shares outstanding | **118.847** | 126.337 | **120.979** | 126.153 |
| Dilutive effect of employee stock awards | **2.083** | 1.627 | **2.204** | 1.421 |
| Dilutive effect of stock warrants | **—** | 0.346 | **—** | 0.283 |
| Diluted weighted average shares outstanding | **120.930** | 128.310 | **123.183** | 127.857 |
| Basic earnings per share | $**1.45** | $1.74 | $**0.05** | $0.70 |
| Diluted earnings per share | $**1.42** | $1.71 | $**0.05** | $0.69 |
| Antidilutive amounts excluded from calculation: |  |  |  |  |
| Employee stock awards | 1.2 | 1.1 | 1.1 | 1.9 |
| Stock warrants | 0.1 | 0.2 |  | 0.2 |

---

------

**NOTE 10. ACCUMULATED OTHER COMPREHENSIVE LOSS**

A roll forward of the amounts included in accumulated other comprehensive loss is shown below for the three and six months ended June 30, 2025 and 2024:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ***(in millions)*** | **Marketable Securities** | **Employee Benefit Plan** | **Interest Rate Derivatives** | **Tax Effect** | **Total** |
| **Balance at March 31, 2025** | $(9) | $(302) | $1 | $76 | $(234) |
| Change in value | 6 |  | (3) | (1) | 2 |
| Reclassifications into earnings | 2 | 3 |  | (1) | 4 |
| **Balance at June 30, 2025** | $**(1)** | $**(299)** | $**(2)** | $**74** | $**(228)** |
| **Balance at December 31, 2024** | $(21) | $(305) | $9 | $78 | $(239) |
| Change in value | 16 |  | (11) | (2) | 3 |
| Reclassifications into earnings | 4 | 6 |  | (2) | 8 |
| **Balance at June 30, 2025** | $**(1)** | $**(299)** | $**(2)** | $**74** | $**(228)** |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| ***(in millions)*** | **Marketable Securities** | **Employee Benefit Plan** | **Interest Rate Derivatives** | **Tax Effect** | **Total** |
| **Balance at March 31, 2024** | $(45) | $(354) | $9 | $96 | $(294) |
| Change in value | 6 |  |  |  | 6 |
| Reclassifications into earnings |  | 4 |  | (3) | 1 |
| **Balance at June 30, 2024** | $(39) | $(350) | $9 | $93 | $(287) |
| **Balance at December 31, 2023** | $(46) | $(358) | $8 | $97 | $(299) |
| Change in value | 7 |  | 1 |  | 8 |
| Reclassifications into earnings |  | 8 |  | (4) | 4 |
| **Balance at June 30, 2024** | $(39) | $(350) | $9 | $93 | $(287) |

---

------

**NOTE 11. OPERATING SEGMENT INFORMATION**

Air Group has three operating airlines – Alaska, Hawaiian, and Horizon. Each is regulated by the U.S. Department of Transportation's Federal Aviation Administration. Alaska has CPAs for regional capacity with Horizon and SkyWest.

Air Group's Chief Operating Decision Maker (CODM) is its President and CEO. In the third quarter of 2024, the CODM began to review financial results for Hawaiian to assess performance and make resource allocation decisions for Air Group. As a result, the Company determined Hawaiian was an operating and reportable segment.

Air Group's network and schedules are centrally managed for all its operating airlines and CPA flying. Managing the business in an integrated manner enables the Company to leverage its comprehensive network, route scheduling system, and fleet as a single business. The CODM makes resource allocation decisions to deliver optimized consolidated financial results, regardless of the profitability of an individual segment. Air Group intends to combine Alaska and Hawaiian under a single operating certificate in the near term. At that time, management anticipates the discrete information provided to the CODM will similarly be combined. Management is considering other changes to internal reporting that may impact the discrete information provided to the CODM to better align with the way the business is managed. These changes may have an impact on the Company's reportable segments once finalized.

The CODM reviews financial performance information as part of three reportable operating segments which are described above:

• **Alaska Airlines** - includes scheduled air transportation on Alaska's Boeing aircraft for passengers and cargo.

• **Hawaiian Airlines** - includes scheduled air transportation on Hawaiian's Boeing and Airbus aircraft for passengers and cargo.

**• Regional** - includes Horizon's and other third-party carriers' scheduled air transportation on E175 aircraft for passengers under CPAs. This segment includes the actual revenue and expenses associated with regional flying, as well as an allocation of corporate overhead incurred by Air Group on behalf of the regional operations.

The below tables present segment revenue and expenses for Air Group's reportable segments. Air Group's measure of segment profit or loss is pretax profit, which is used by the CODM to evaluate financial results. Additionally, reconciliations of the pretax profit of all reportable segments to Air Group's consolidated income before income tax are provided. Certain immaterial reclassifications have been made within segment operating expenses between the Alaska Airlines and Regional segments for the three and six months ended June 30, 2024. These reclassifications had no impact to consolidated results.

------

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** |
| ***(in millions)*** | **Alaska Airlines** | **Hawaiian Airlines** | **Regional** | **Reportable Segment Total** |
| **Segment operating revenue** | | | | |
| Passenger revenue | $2132 | $769 | $454 | $3355 |
| Loyalty program other revenue | 161 | 32 | 17 | 210 |
| Cargo and other revenue | 80 | 56 |  | 136 |
| **Total segment operating revenue** | 2373 | 857 | 471 | 3701 |
| *Reconciliation to Consolidated Operating Revenue:* |  |  |  |  |
| *Other revenue*<sup>(a)</sup> |  |  |  | *3* |
| *Consolidated Operating Revenue* |  |  |  | $*3704* |
| **Segment operating expenses** |  |  |  |  |
| Wages and benefits | 752 | 277 |  | 1029 |
| Variable incentive pay | 41 | 15 |  | 56 |
| Economic fuel | 437 | 171 | 93 | 701 |
| Aircraft maintenance | 136 | 81 |  | 217 |
| Aircraft rent | 21 | 16 |  | 37 |
| Landing fees and other rentals | 166 | 59 |  | 225 |
| Contracted services | 142 | 36 |  | 178 |
| Selling expenses | 67 | 29 |  | 96 |
| Depreciation and amortization | 124 | 60 |  | 184 |
| Food and beverage service | 60 | 29 |  | 89 |
| Other<sup>(b)</sup>  | 154 | 60 |  | 214 |
| Regional carrier expenses |  |  | 371 | 371 |
| **Total segment operating expenses** | 2100 | 833 | 464 | 3397 |
| **Segment non-operating income (expense)** |  |  |  |  |
| Interest income | 40 | 2 |  | 42 |
| Interest expense | (51) | (26) |  | (77) |
| Other<sup>(b)</sup> | 5 | 1 |  | 6 |
| **Total segment non-operating income (expense)** | (6) | (23) |  | (29) |
| **Segment pretax income** | $267 | $1 | $7 | $275 |
| *Reconciliation to Consolidated Income Before Income Tax:* |  |  |  |  |
| *Other profit*<sup>(a)</sup> |  |  |  | *20* |
| *Aircraft fuel mark-to-market adjustment* |  |  |  | *1* |
| *Losses on foreign debt* |  |  |  | *(2)* |
| *Special items - operating* |  |  |  | *(56)* |
| *Consolidated Income Before Income Tax* |  |  |  | $*238* |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** |
| ***(in millions)*** | **Alaska Airlines** | **Hawaiian Airlines** | **Regional** | **Reportable Segment Total** |
| **Segment operating revenue** | | | | |
| Passenger revenue | $2188 | $— | $463 | $2651 |
| Loyalty program other revenue | 160 |  | 14 | 174 |
| Cargo and other revenue | 69 |  |  | 69 |
| **Total segment operating revenue** | 2417 |  | 477 | 2894 |
| *Reconciliation to Consolidated Operating Revenue:* |  |  |  |  |
| *Other revenue*<sup>(a)</sup> |  |  |  | *3* |
| *Consolidated Operating Revenue* |  |  |  | $*2897* |
| **Segment operating expenses** |  |  |  |  |
| Wages and benefits | 663 |  |  | 663 |
| Variable incentive pay | 46 |  |  | 46 |
| Economic fuel | 520 |  | 100 | 620 |
| Aircraft maintenance | 113 |  |  | 113 |
| Aircraft rent | 19 |  |  | 19 |
| Landing fees and other rentals | 134 |  |  | 134 |
| Contracted services | 131 |  |  | 131 |
| Selling expenses | 73 |  |  | 73 |
| Depreciation and amortization | 113 |  |  | 113 |
| Food and beverage service | 59 |  |  | 59 |
| Other<sup>(b)</sup>  | 158 |  |  | 158 |
| Regional carrier expenses |  |  | 329 | 329 |
| **Total segment operating expenses** | 2029 |  | 429 | 2458 |
| **Segment non-operating income (expense)** |  |  |  |  |
| Interest income | 25 |  |  | 25 |
| Interest expense | (26) |  |  | (26) |
| Other<sup>(b)</sup> | 7 |  |  | 7 |
| **Total segment non-operating income (expense)** | 6 |  |  | 6 |
| **Segment pretax income** | $394 | $— | $48 | $442 |
| *Reconciliation to Consolidated Income Before Income Tax:* |  |  |  |  |
| *Other profit*<sup>(a)</sup> |  |  |  | *15* |
| *Aircraft fuel mark-to-market adjustment* |  |  |  | *5* |
| *Special items - operating* |  |  |  | *(146)* |
| *Consolidated Income Before Income Tax* |  |  |  | $*316* |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** |
| ***(in millions)*** | **Alaska Airlines** | **Hawaiian Airlines** | **Regional** | **Reportable Segment Total** |
| **Segment operating revenue** | | | | |
| Passenger revenue | $3889 | $1422 | $852 | $6163 |
| Loyalty program other revenue | 313 | 71 | 33 | 417 |
| Cargo and other revenue | 145 | 111 |  | 256 |
| **Total segment operating revenue** | 4347 | 1604 | 885 | 6836 |
| *Reconciliation to Consolidated Operating Revenue:* |  |  |  |  |
| *Other revenue*<sup>(a)</sup> |  |  |  | *5* |
| *Consolidated Operating Revenue* |  |  |  | $*6841* |
| **Segment operating expenses** |  |  |  |  |
| Wages and benefits | 1473 | 554 |  | 2027 |
| Variable incentive pay | 84 | 28 |  | 112 |
| Economic fuel | 856 | 345 | 184 | 1385 |
| Aircraft maintenance | 259 | 156 |  | 415 |
| Aircraft rent | 42 | 31 |  | 73 |
| Landing fees and other rentals | 308 | 114 |  | 422 |
| Contracted services | 276 | 72 |  | 348 |
| Selling expenses | 129 | 59 |  | 188 |
| Depreciation and amortization | 246 | 118 |  | 364 |
| Food and beverage service | 115 | 52 |  | 167 |
| Other<sup>(b)</sup>  | 327 | 118 |  | 445 |
| Regional carrier expenses |  |  | 716 | 716 |
| **Total segment operating expenses** | 4115 | 1647 | 900 | 6662 |
| **Segment non-operating income (expense)** |  |  |  |  |
| Interest income | 83 | 5 |  | 88 |
| Interest expense | (103) | (52) |  | (155) |
| Other<sup>(b)</sup> | 12 | 3 |  | 15 |
| **Total segment non-operating income (expense)** | (8) | (44) |  | (52) |
| **Segment pretax income (loss)** | $224 | $(87) | $(15) | $122 |
| *Reconciliation to Consolidated Income Before Income Tax:* |  |  |  |  |
| *Other profit*<sup>(a)</sup> |  |  |  | *33* |
| *Aircraft fuel mark-to-market adjustment* |  |  |  | *4* |
| *Losses on foreign debt* |  |  |  | *(7)* |
| *Special items - operating* |  |  |  | *(147)* |
| *Consolidated Income Before Income Tax* |  |  |  | $*5* |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** |
| ***(in millions)*** | **Alaska Airlines** | **Hawaiian Airlines** | **Regional** | **Reportable Segment Total** |
| **Segment operating revenue** | | | | |
| Passenger revenue | $3817 | $— | $838 | $4655 |
| Loyalty program other revenue | 309 |  | 29 | 338 |
| Cargo and other revenue | 131 |  |  | 131 |
| **Total segment operating revenue** | 4257 |  | 867 | 5124 |
| *Reconciliation to Consolidated Operating Revenue:* |  |  |  |  |
| *Other revenue*<sup>(a)</sup> |  |  |  | *5* |
| *Consolidated Operating Revenue* |  |  |  | $*5129* |
| **Segment operating expenses** |  |  |  |  |
| Wages and benefits | 1346 |  |  | 1346 |
| Variable incentive pay | 83 |  |  | 83 |
| Economic fuel | 1005 |  | 193 | 1198 |
| Aircraft maintenance | 220 |  |  | 220 |
| Aircraft rent | 39 |  |  | 39 |
| Landing fees and other rentals | 262 |  |  | 262 |
| Contracted services | 251 |  |  | 251 |
| Selling expenses | 141 |  |  | 141 |
| Depreciation and amortization | 225 |  |  | 225 |
| Food and beverage service | 112 |  |  | 112 |
| Other<sup>(b)</sup>  | 335 |  |  | 335 |
| Regional carrier expenses |  |  | 637 | 637 |
| **Total segment operating expenses** | 4019 |  | 830 | 4849 |
| **Segment non-operating income (expense)** |  |  |  |  |
| Interest income | 43 |  |  | 43 |
| Interest expense | (51) |  |  | (51) |
| Other<sup>(b)</sup> | 11 |  |  | 11 |
| **Total segment non-operating income (expense)** | 3 |  |  | 3 |
| **Segment pretax income** | $241 | $— | $37 | $278 |
| *Reconciliation to Consolidated Income Before Income Tax:* |  |  |  |  |
| *Other profit*<sup>(a)</sup> |  |  |  | *22* |
| *Aircraft fuel mark-to-market adjustment* |  |  |  | *18* |
| *Special items - operating* |  |  |  | *(180)* |
| *Consolidated Income Before Income Tax* |  |  |  | $*138* |

---

(a) Revenue and profit or loss from segments below the quantitative thresholds as well as other immaterial business units, including Air Group parent company activity, Horizon Air operations, McGee Air Services, consolidating entries and intercompany eliminations.

(b) Includes miscellaneous personnel, software, and services costs, as well as other non-operating activity.

------

Total capital expenditures were as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| ***(in millions)*** | **2025** | **2024** | **2025** | **2024** |
| Alaska Airlines | $**330** | $529 | $**422** | $581 |
| Hawaiian Airlines | **165** |  | **309** |  |
| Other<sup>(a)</sup> | **54** | 24 | **79** | 74 |
| &nbsp;&nbsp;&nbsp;**Consolidated** | $**549** | $553 | $**810** | $655 |

---

Total assets were as follows<sup>(b)</sup>:

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| | | |
|:---|:---|:---|
| ***(in millions)*** | **June 30, 2025** | **December 31, 2024** |
| Alaska Airlines | $**24460** | $24664 |
| Hawaiian Airlines | **4725** | 4423 |
| Consolidating & Other | **(9300)** | (9319) |
| &nbsp;&nbsp;&nbsp;**Consolidated** | $**19885** | $19768 |

---

(a) Primarily consists of Horizon Air capital expenditures, including non-cash expenditures for debt financing of certain E175 deliveries of $46 million and $69 million in the three and six months ended June 30, 2025 and $23 million and $68 million in the three and six months ended June 30, 2024.

(b) No assets are allocated to the Regional segment as it represents only revenue and expenses associated with regional flying. The related assets associated with regional flying are allocated to other segments.

**NOTE 12. SPECIAL ITEMS**

The Company has classified certain operating activity as special items due to its unusual or infrequently occurring nature. Disclosing information about these items separately may assist with comparable year over year analysis and allow stakeholders to better understand Air Group's results of operations.

*Integration costs:* Integration costs were associated with the acquisition of Hawaiian Airlines and consist of employee-related, technology, and other merger costs.

*Labor and other:* Labor and other costs in 2025 were primarily for changes to Alaska flight attendants' sick leave benefits pursuant to a new collective bargaining agreement ratified in the first quarter of 2025. Costs in 2024 were associated with new labor agreements, the retirement of Alaska's Airbus and Horizon's Q400 aircraft, and certain litigation items.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| ***(in millions)*** | **2025** | **2024** | **2025** | **2024** |
| **Operating Expenses** |  |  |  |  |
| Integration costs | $**53** | $30 | $**93** | $38 |
| Labor and other | **3** | 116 | **54** | 142 |
| **Special items - operating** | $**56** | $146 | $**147** | $180 |

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**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

**OVERVIEW**

The following Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to help the reader understand our company and the present business environment. MD&A is provided as a supplement to – and should be read in conjunction with – our unaudited condensed consolidated financial statements and the accompanying notes. All statements in the following discussion that are not statements of historical information or descriptions of current accounting policy are forward-looking statements. Please consider our forward-looking statements in light of the risks referred to in this report's introductory cautionary note and the risks mentioned in Item 1A. "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2024. This overview summarizes the MD&A, which includes the following sections:

• *Second Quarter Review* - highlights from the second quarter of 2025 outlining some of the major events that occurred during the period, as well as forward-looking statements.

• *Results of Operations* - an in-depth analysis of our financial and operational results for the three and six months ended June 30, 2025.

• *Liquidity and Capital Resources* - an overview of our financial position, analysis of cash flows, and relevant material cash commitments.

• *GAAP to Non-GAAP Reconciliations and Operating Statistics* - reconciliations of reported non-GAAP financial measures to their most directly comparable financial measures reported on a GAAP basis, as well as operating statistics we use to measure operating performance.

Dollar amounts in the MD&A are generally rounded to the nearest million. As a result, a manual recalculation of certain figures using these rounded amounts may not agree directly to our actual figures presented in the tables below.

***Items affecting comparability***

As Hawaiian Holdings, Inc. was acquired by Air Group on September 18, 2024, its financial results were not reflected in reported figures in the periods preceding the acquisition date. Due to the size of the two companies prior to the acquisition, the reported results for 2025 and 2024 are not comparable. To assist with the discussion of 2025 and 2024 results on a comparable basis and provide more meaningful discussion, certain supplemental unaudited pro forma income statement information is provided for the three and six months ended June 30, 2024. Pro forma historical results were included with the Form 8-K filed on January 22, 2025. This information does not purport to reflect what our financial and operational results would have been had the acquisition been consummated at the beginning of the periods presented.

***Cybersecurity incident***

As previously disclosed in a Current Report on Form 8-K filed on June 27, 2025, on June 23, 2025, Hawaiian Airlines identified a cybersecurity incident affecting certain information technology systems. Upon identifying this incident, we followed our response protocols and immediately took steps to safeguard our network by disconnecting impacted Hawaiian systems and applications. Hawaiian's flights were not interrupted and continued to operate safely throughout our response. We have engaged the relevant authorities and experts to assist in our investigation and ongoing remediation efforts.

Based on information currently available, we do not believe the incident had, or is expected to have, a material impact on Hawaiian's business, results of operations, or financial condition. Subsequent to quarter end, access for all systems has been restored. The investigation remains active and therefore we are unable to determine the full impact of the incident at this time.

For a discussion of our risk factors associated with cybersecurity threats, please refer to Part I Item 1A. "Risk Factors" within our Form 10-K for the year ended December 31, 2024.

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**SECOND QUARTER REVIEW**

***Overview***

We reported income before income tax under GAAP for the second quarter of 2025 of $238 million, compared to $316 million for the second quarter of 2024. On a pro forma basis, the pretax income for the second quarter of 2024 was $237 million. Refer below for a more detailed discussion of the items impacting these results.

***Labor update***

In the second quarter, Hawaiian flight attendants, represented by the Association of Flight Attendants (AFA), ratified a three-year extension of their existing Collective Bargaining Agreement (CBA). Horizon technicians, represented by the Aircraft Mechanics Fraternal Association (AMFA) ratified a four-year CBA.

Subsequent to quarter-end, McGee Air Services reached a tentative agreement with employees represented by the International Association of Machinists and Aerospace Workers (IAM) for a new five-year agreement. Voting is expected to take place mid-August.

Alaska and Hawaiian are working towards joint collective bargaining agreements (JCBA) for workgroups represented by common unions. Alaska and Hawaiian have Transition and Process Agreements for certain workgroups which define the process for negotiating JCBAs and set forth interim agreements until a JCBA is reached.

***Outlook***

We have seen a recent improvement in traffic, yield, and revenue intake for both Alaska and Hawaiian Airlines' bookings. In line with evolving changes to the demand environment and our continued delivery on synergy and commercial initiative commitments, on a pro forma basis we expect full year 2025 capacity to be up 2% year-over-year, with unit revenue flat to up low single digits and unit cost up mid single digits.

Irregular operations resulting from an IT outage in July are expected to have a modest impact on third quarter performance. On a pro forma basis, we expect third quarter capacity to decrease by 1%, with unit revenues flat to up low single digits and unit costs up mid to high single digits. Our costs remain in line with our expectations, and reflect strategic investments as well as elevated real estate costs, maintenance costs, and new labor agreements.

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**RESULTS OF OPERATIONS**

**COMPARISON OF THREE MONTHS ENDED JUNE 30, 2025 TO PRO FORMA THREE MONTHS ENDED JUNE 30, 2024** 

**PRO FORMA OPERATING STATISTICS**

Below are operating statistics presented on a pro forma basis, which assumes Hawaiian is included in both 2024 and 2025.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
| | **2025** | **2024 As Reported** | **2024 Hawaiian Airlines** | **2024 Pro forma** | **% Change** |
| **Consolidated Operating Statistics:** |  |  |  |  |  |
| Revenue passengers (000) | **15234** | 11888 | 2788 | 14676 | 3.8% |
| RPMs (000000) "traffic" | **20179** | 15309 | 4519 | 19828 | 1.8% |
| ASMs (000000) "capacity" | **24058** | 18196 | 5230 | 23426 | 2.7% |
| Load factor | **83.9%** | 84.1% | 86.4% | 84.6% | (0.7) pts |
| Yield | **16.62¢** | 17.32¢ | 14.68¢ | 16.72¢ | (0.6)% |
| PRASM | **13.94¢** | 14.57¢ | 12.70¢ | 14.15¢ | (1.5)% |
| RASM | **15.39¢** | 15.92¢ | 13.99¢ | 15.49¢ | (0.6)% |
| CASMex | **10.90¢** | 9.89¢ | 11.50¢ | 10.23¢ | 6.5% |
| Economic fuel cost per gallon | **$2.39** | $2.84 | $2.74 | $2.81 | (14.9)% |
| Fuel gallons (000000) | **293** | 219 | 68 | 287 | 2.1% |
| Departures (000) | **139.6** | 112.4 | 20.5 | 132.9 | 5.0% |
| Average full-time equivalent employees (FTEs) | **31299** | 23368 | 6712 | 30080 | 4.1% |

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**PRO FORMA OPERATING REVENUE**

On a pro forma basis, total operating revenue increased $75 million or 2%. The changes, including the reconciliation of the impact of Hawaiian on the combined results, are summarized in the following table:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Change** | **Change** |
| ***(in millions)*** | **2025** | **2024 As Reported** | **2024 Hawaiian Airlines**<sup>(a)</sup> | **2024 Pro forma** | **$ Change** | **% Change** |
| Passenger revenue | $**3355** | $2651 | $664 | $3315 | $40 | 1% |
| Loyalty program other revenue | **210** | 174 | 29 | 203 | 7 | 3% |
| Cargo and other revenue | **139** | 72 | 39 | 111 | 28 | 25% |
| **Total Operating Revenue** | $**3704** | $2897 | $732 | $3629 | $75 | 2% |

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(a) As provided on Form 8-K filed with the SEC on January 22, 2025, including certain immaterial reclassification and policy adjustments.

The table below presents total operating revenue by principal geographic region (as defined by the U.S. Department of Transportation) and the percentage of change of certain operational results on a pro forma basis for the three months ended June 30, 2025.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30, 2025** | **% Change vs. Pro forma Prior Year** | **% Change vs. Pro forma Prior Year** | **% Change vs. Pro forma Prior Year** | **% Change vs. Pro forma Prior Year** | **% Change vs. Pro forma Prior Year** |
| ***(in millions)*** | **Total Operating Revenue** | **Passenger Revenue** | **RPMs** | **ASMs** | **Yield** | **PRASM** |
| Domestic | $**3371** | 1% | 1% | 2% | —% | (1)% |
| Latin America | **184** | 3% | 5% | 8% | (2)% | (4)% |
| Pacific | **149** | 3% | 6% | 11% | (2)% | (6)% |
| &nbsp;&nbsp;**Total** | $**3704** | 1% | 2% | 3% | (1)% | (1)% |

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***Passenger revenue***

On a pro forma basis, Passenger revenue increased $40 million, or 1%, on a 2% increase in traffic, partially offset by a 1% decrease in yield as a result of macroeconomic uncertainty. Hawaiian passenger revenue has improved meaningfully, driven by the combination of the Alaska and Hawaiian networks, as well as synergy and commercial initiatives announced in 2024. Increased premium revenue and loyalty program award redemptions on our airlines have also contributed to improved results.

***Loyalty program other revenue***

On a pro forma basis, Loyalty program other revenue increased $7 million, or 3%, due to higher commission revenue from bank card and third party partners driven by increased consumer spend.

***Cargo and other revenue***

On a pro forma basis, Cargo and other revenue increased $28 million, or 25%, driven by operations from one of Alaska's B737-800F aircraft that was out of service in the second quarter of 2024 and seven additional A330-300F aircraft in Hawaiian's cargo fleet, utilized under the ATSA with Amazon, since the second quarter of 2024.

**PRO FORMA OPERATING EXPENSES**

On a pro forma basis, total operating expenses increased $54 million, or 2%. The changes, including the reconciliation of the impact of Hawaiian on the combined results, are summarized below. We believe it is useful to summarize operating expenses as follows, which is consistent with the way expenses are reported internally and evaluated by management:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Change** | **Change** |
| ***(in millions)*** | **2025** | **2024 As Reported** | **2024 Hawaiian Airlines**<sup>(a)</sup> | **2024 Pro forma** | **$ Change** | **% Change** |
| Aircraft fuel, including hedging gains and losses | $**700** | $615 | $186 | $801 | $(101) | (13)% |
| Non-fuel operating expenses, excluding special items | **2671** | 1814 | 606 | 2420 | 251 | 10% |
| Special items - operating | **56** | 146 | 6 | 152 | (96) | (63)% |
| **Total Operating Expenses** | $**3427** | $2575 | $798 | $3373 | $54 | 2% |

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(a) As provided on Form 8-K filed with the SEC on January 22, 2025, including certain immaterial reclassification and policy adjustments and the impact of purchase accounting.

***Fuel expense***

Aircraft fuel expense includes raw fuel expense plus the effect of mark-to-market adjustments to our fuel hedge portfolio as the value of that portfolio increases and decreases. Our aircraft fuel expense can be volatile because it includes these gains or losses in the value of the underlying instrument as crude oil prices increase or decrease. Raw fuel expense is defined as the price that we generally pay at the airport, or the "into-plane" price, including taxes and fees. Raw fuel prices are impacted by world oil prices and refining costs, which can vary by region in the U.S. Raw fuel expense approximates cash paid to suppliers and does not reflect the effect of our fuel hedges.

Alaska and Hawaiian used to actively hedge fuel using crude oil call options. With call options, we are hedged against volatile crude oil price increases and, during a period of decline in crude oil prices, we only forfeit cash previously paid for hedge premiums. Alaska's fuel hedge program was suspended in 2023 and all remaining positions were settled in the first quarter of 2025. Hawaiian's fuel hedge program was suspended in the first quarter of 2025. Its open positions, based in Brent crude oil, will settle by the end of the third quarter of 2025. The open positions hedge approximately 5% of Hawaiian's expected third-quarter fuel consumption at a weighted-average crude oil price per barrel of $91, with an average premium cost per barrel of $2.

We evaluate economic fuel expense, which we define as raw fuel expense adjusted for the cash we receive from hedge counterparties for hedges that settle during the period and for the premium expense that we paid for those contracts. A key difference between aircraft fuel expense and economic fuel expense is the timing of gain or loss recognition on our hedge portfolio. Economic fuel expense includes gains and losses only when they are realized for those contracts that were settled during the period based on their original contract terms. We believe this is the best measure of the effect that fuel prices are currently having on our business as it most closely approximates the net cash outflow associated with purchasing fuel for our

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operations. Accordingly, many industry analysts evaluate our results using this measure, and it is the basis for most internal management reporting and incentive pay plans.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
| | **2025** | **2025** | **2024 Pro forma** | **2024 Pro forma** |
| ***(in millions, except for per gallon amounts)*** | **Dollars** | **Cost/Gal** | **Dollars** | **Cost/Gal** |
| Raw or "into-plane" fuel cost | $**700** | $2.39 | $794 | $2.77 |
| Losses on settled hedges | **1** |  | 12 | 0.04 |
| **Economic fuel expense** | **701** | 2.39 | 806 | 2.81 |
| Mark-to-market fuel hedge adjustments | **(1)** |  | (5) | (0.02) |
| **Aircraft fuel, including hedging gains and losses** | $**700** | $2.39 | $801 | $2.79 |
| Fuel gallons |  | 293 |  | 287 |

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On a pro forma basis, aircraft fuel expense decreased $101 million, or 13%. Raw fuel expense decreased by 12%, primarily driven by lower per gallon costs on crude oil. Decreases were partially offset by higher fuel consumption consistent with increased capacity.

Losses recognized for hedges that settled during the second quarter were $1 million in 2025, compared to losses of $12 million in 2024. These amounts represent cash paid for premium expense, offset by any cash received from those hedges at settlement.

***Non-fuel expense***

The table below summarizes our operating expense line items, excluding fuel and other special items, on a pro forma basis. Generally, increases to these expenses are driven by capacity increases and growth of the Company's operations. Significant or unusual changes compared to 2024 on a pro forma basis are more fully described below.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Change** | **Change** |
| ***(in millions)*** | **2025** | **2024 As Reported** | **2024 Hawaiian Airlines**<sup>(a)</sup> | **2024 Pro forma** | **$ Change** | **% Change** |
| Wages and benefits | $**1165** | $782 | $260 | $1042 | $123 | 12% |
| Variable incentive pay | **61** | 49 | 5 | 54 | 7 | 13% |
| Aircraft maintenance | **240** | 129 | 75 | 204 | 36 | 18% |
| Aircraft rent | **64** | 46 | 15 | 61 | 3 | 5% |
| Landing fees and rentals | **278** | 173 | 49 | 222 | 56 | 25% |
| Contracted services | **146** | 106 | 33 | 139 | 7 | 5% |
| Selling expenses | **105** | 84 | 31 | 115 | (10) | (9)% |
| Depreciation and amortization | **199** | 128 | 55 | 183 | 16 | 9% |
| Food and beverage service | **97** | 67 | 23 | 90 | 7 | 8% |
| Third-party regional carrier expense | **69** | 64 |  | 64 | 5 | 8% |
| Other | **247** | 186 | 60 | 246 | 1 | —% |
| **Total non-fuel operating expenses, excluding special items** | $**2671** | $1814 | $606 | $2420 | $251 | 10% |

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(a) As provided on Form 8-K filed with the SEC on January 22, 2025, including certain immaterial reclassification and policy adjustments.

***Wages and benefits***

The primary components of wages and benefits, including a reconciliation of 2024 on a pro forma basis, are shown in the following table:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Change** | **Change** |
| ***(in millions)*** | **2025** | **2024 As Reported** | **2024 Hawaiian Airlines** | **2024 Pro forma** | **$ Change** | **% Change** |
| Wages | $**888** | $592 | $203 | $795 | $93 | 12% |
| Pension - Defined benefit plans | **7** | 7 | 3 | 10 | (3) | (30)% |
| Defined contribution plans | **85** | 57 | 20 | 77 | 8 | 10% |
| Medical and other benefits | **124** | 82 | 22 | 104 | 20 | 19% |
| Payroll taxes | **61** | 44 | 12 | 56 | 5 | 9% |
| **Total Wages and benefits** | $**1165** | $782 | $260 | $1042 | $123 | 12% |

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On a pro forma basis, wages and benefits increased by $123 million, or 12%, driven by increased headcount and higher wage rates across multiple labor groups since the second quarter of 2024.

Medical and other benefits expense increased $20 million, or 19%, driven by higher value claims and increased obligations under Alaska's pilots long-term disability plan.

***Aircraft maintenance***

On a pro forma basis, aircraft maintenance increased $36 million, or 18%, driven by increased utilization of aircraft resulting in increased heavy checks and engine events since the second quarter of 2024. Higher rates on engine maintenance also contributed to the increase.

***Landing fees and rentals***

On a pro forma basis, landing fees and other rentals increased $56 million, or 25%, driven primarily by nonrecurring favorable settlements received from certain airports in 2024. Increased terminal rents driven by higher rates and growth throughout the combined network, as well as increased volume of departures and landed weight also contributed to the increase.

***Selling expenses***

On a pro forma basis, selling expenses decreased $10 million, or 9%, primarily driven by improved rates on credit card vendor rebates. Lower marketing costs also contributed to this decrease.

***Depreciation and amortization***

On a pro forma basis, depreciation and amortization increased $16 million, or 9%, primarily due to the addition of 19 owned aircraft to our airlines' fleets since the second quarter of 2024. Incremental depreciation on ground service and other equipment also contributed to the increase.

***Other***

On a pro forma basis, other expenses were flat. Higher professional services and software costs were offset by a gain on sale of four B737-900 aircraft.

***Special items - operating***

On a pro forma basis, special items decreased $96 million, or 63%, driven by nonrecurring costs in 2024 associated with Alaska flight attendant retroactive pay, the retirement of Alaska's Airbus and Horizon Q400 aircraft, and certain litigation matters. Increased integration costs associated with the acquisition of Hawaiian Airlines partially offset this decrease. Refer to Note 12 to the unaudited condensed consolidated financial statements for details.

**Additional Segment Information**

Refer to Note 11 to the unaudited condensed consolidated financial statements for a detailed description of each segment and a reconciliation of segment results to consolidated Air Group results. Below is a summary of each segment's results for the second quarter of 2025.

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***Alaska Airlines***

Alaska Airlines reported a pretax profit, excluding special items and other adjustments, of $267 million in the second quarter of 2025, compared to a profit of $394 million in the same period in 2024. The $127 million decrease was primarily driven by $154 million in increased non-fuel operating expenses, due largely to higher wages and increased variable costs, and $44 million in reduced revenue, due to a weaker yield environment. Lower fuel costs of $83 million, driven by lower per gallon costs, partially offset the decrease in profit.

***Hawaiian Airlines***

Hawaiian Airlines reported a pretax profit, excluding special items and other adjustments, of $1 million in the second quarter of 2025, compared to a loss on a pro forma basis of $83 million in the same period in 2024. The $84 million increase was primarily driven by $125 million in increased revenue, driven by higher traffic and yield due to the optimization of Hawaiian assets in Air Group's combined network, as well as continued recovery following the 2023 Maui wildfires. Lower fuel costs of $15 million, driven by lower per gallon costs, also contributed to the improvement. These amounts were partially offset by increased non-fuel operating expenses of $50 million associated with increased capacity.

***Regional***

Regional reported a pretax profit, excluding special items and other adjustments, of $7 million in the second quarter of 2025, compared to a profit of $48 million in the same period in 2024. The $41 million decrease was primarily due to $42 million in increased non-fuel operating expenses associated with increased capacity, and $6 million in reduced revenue due to a weaker yield environment. Lower fuel costs of $7 million, driven by lower per gallon costs, partially offset the decrease in profit.

**COMPARISON OF SIX MONTHS ENDED JUNE 30, 2025 TO PRO FORMA SIX MONTHS ENDED JUNE 30, 2024** 

**PRO FORMA OPERATING STATISTICS**

Below are operating statistics presented on a pro forma basis, which assumes Hawaiian is included in both 2024 and 2025.

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| | **2025** | **2024 As Reported** | **2024 Hawaiian Airlines** | **2024 Pro forma** | **% Change** |
| **Consolidated Operating Statistics:** |  |  |  |  |  |
| Revenue passengers (000) | **28393** | 21662 | 5409 | 27071 | 4.9% |
| RPMs (000000) "traffic" | **37436** | 27833 | 8592 | 36425 | 2.8% |
| ASMs (000000) "capacity" | **45277** | 33575 | 10280 | 43855 | 3.2% |
| Load factor | **82.7%** | 82.9% | 83.6% | 83.1% | (0.4) pts |
| Yield | **16.46¢** | 16.73¢ | 14.49¢ | 16.20¢ | 1.6% |
| PRASM | **13.61¢** | 13.86¢ | 12.11¢ | 13.45¢ | 1.2% |
| RASM | **15.11¢** | 15.28¢ | 13.39¢ | 14.84¢ | 1.8% |
| CASMex | **11.36¢** | 10.67¢ | 11.65¢ | 10.89¢ | 4.3% |
| Economic fuel cost per gallon | **$2.49** | $2.95 | $2.79 | $2.88 | (13.4)% |
| Fuel gallons (000000) | **556** | 406 | 136 | 542 | 2.6% |
| Departures (000) | **263.5** | 208.1 | 40.8 | 248.9 | 5.9% |
| Average full-time equivalent employees (FTEs) | **30536** | 23190 | 6708 | 29898 | 2.1% |

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**PRO FORMA OPERATING REVENUE**

On a pro forma basis, total operating revenue increased $335 million or 5%. The changes, including the reconciliation of the impact of Hawaiian on the combined results, are summarized in the following table:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Change** | **Change** |
| ***(in millions)*** | **2025** | **2024 As Reported** | **2024 Hawaiian Airlines**<sup>(a)</sup> | **2024 Pro forma** | **$ Change** | **% Change** |
| Passenger revenue | $**6163** | $4655 | $1245 | $5900 | $263 | 4% |
| Loyalty program other revenue | **417** | 338 | 58 | 396 | 21 | 5% |
| Cargo and other revenue | **261** | 136 | 74 | 210 | 51 | 24% |
| **Total Operating Revenue** | $**6841** | $5129 | $1377 | $6506 | $335 | 5% |

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(a) Pro forma six months ended June 30, 2024 can be calculated by adding the three months ended March 31, 2024 and June 30, 2024 as provided on Form 8-K filed with the SEC on January 22, 2025, including certain immaterial reclassification and policy adjustments.

The table below presents total operating revenue by principal geographic region (as defined by the U.S. Department of Transportation) and the percentage of change of certain operational results on a pro forma basis for the six months ended June 30, 2025.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30, 2025** | **% Change vs. Pro forma Prior Year** | **% Change vs. Pro forma Prior Year** | **% Change vs. Pro forma Prior Year** | **% Change vs. Pro forma Prior Year** | **% Change vs. Pro forma Prior Year** |
| ***(in millions)*** | **Total Operating Revenue** | **Passenger Revenue** | **RPMs** | **ASMs** | **Yield** | **PRASM** |
| Domestic | $**6114** | 5% | 3% | 3% | 2% | 1% |
| Latin America | **425** | 6% | 1% | 2% | 4% | 3% |
| Pacific | **302** | 2% | 3% | 2% | (1)% | —% |
| &nbsp;&nbsp;**Total** | $**6841** | 4% | 3% | 3% | 2% | 1% |

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***Passenger revenue***

On a pro forma basis, Passenger revenue increased $263 million, or 4%, as traffic increased by 3% and yield grew by 2%. Hawaiian passenger revenue has improved meaningfully, driven by the combination of the Alaska and Hawaiian networks, as well as synergy and commercial initiatives announced in 2024. Increased premium revenue and loyalty program award redemption on our airlines contributed to higher yield. Additionally, prior year results were negatively impacted by $150 million due to the B737-9 grounding in the first quarter of 2024.

***Loyalty program other revenue***

On a pro forma basis, Loyalty program other revenue increased $21 million, or 5%, due to higher commission revenue from bank card and third party partners driven by increased consumer spend. Incremental credit card acquisitions of the Alaska Airlines Visa Signature and Hawaiian Airlines World Elite Mastercard co-branded credit cards also contributed to the increase.

***Cargo and other revenue***

On a pro forma basis, Cargo and other revenue increased $51 million, or 24%, driven by operations from one of Alaska's B737-800F aircraft that was out of service in the second quarter of 2024 and seven additional A330-300F aircraft in Hawaiian's cargo fleet, utilized under the ATSA with Amazon, since the second quarter of 2024.

**PRO FORMA OPERATING EXPENSES**

On a pro forma basis, total operating expenses increased $186 million, or 3%. The changes, including the reconciliation of the impact of Hawaiian on the combined results, are summarized below. We believe it is useful to summarize operating expenses as follows, which is consistent with the way expenses are reported internally and evaluated by management:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Change** | **Change** |
| ***(in millions)*** | **2025** | **2024 As Reported** | **2024 Hawaiian Airlines**<sup>(a)</sup> | **2024 Pro forma** | **$ Change** | **% Change** |
| Aircraft fuel, including hedging gains and losses | $**1381** | $1180 | $380 | $1560 | $(179) | (11)% |
| Non-fuel operating expenses, excluding special items | **5233** | 3613 | 1208 | 4821 | 412 | 9% |
| Special items - operating | **147** | 180 | 14 | 194 | (47) | (24)% |
| **Total Operating Expenses** | $**6761** | $4973 | $1602 | $6575 | $186 | 3% |

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(a) Pro forma six months ended June 30, 2024 can be calculated by adding the three months ended March 31, 2024 and June 30, 2024 as provided on Form 8-K filed with the SEC on January 22, 2025, including certain immaterial reclassification and policy adjustments.

***Fuel expense***

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| | **2025** | **2025** | **2024 Pro forma** | **2024 Pro forma** |
| ***(in millions, except for per gallon amounts)*** | **Dollars** | **Cost/Gal** | **Dollars** | **Cost/Gal** |
| Raw or "into-plane" fuel cost | $**1381** | $2.48 | $1553 | $2.87 |
| Losses on settled hedges | **4** | 0.01 | 27 | 0.05 |
| **Economic fuel expense** | **1385** | 2.49 | 1580 | 2.92 |
| Mark-to-market fuel hedge adjustments | **(4)** | (0.01) | (20) | (0.04) |
| **Aircraft fuel, including hedging gains and losses** | $**1381** | $2.48 | $1560 | $2.88 |
| Fuel gallons |  | 556 |  | 542 |

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On a pro forma basis, aircraft fuel expense decreased $179 million, or 11%. Raw fuel expense decreased by 11%, driven by lower per gallon costs on crude oil and lower refining margins associated with the conversion of crude oil to jet fuel. Decreases were partially offset by higher fuel consumption consistent with increased capacity.

Losses recognized for hedges that settled during the six months ended were $4 million in 2025, compared to losses of $27 million in 2024. These amounts represent cash paid for premium expense, offset by any cash received from those hedges at settlement.

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***Non-fuel expense***

The table below summarizes our operating expense line items, excluding fuel and other special items, on a pro forma basis. Generally, increases to these expenses are driven by capacity increases and growth of the Company's operations. Significant or unusual changes compared to 2024 on a pro forma basis are more fully described below.

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Change** | **Change** |
| ***(in millions)*** | **2025** | **2024 As Reported** | **2024 Hawaiian Airlines**<sup>(a)</sup> | **2024 Pro forma** | **$ Change** | **% Change** |
| Wages and benefits | $**2292** | $1586 | $517 | $2103 | $189 | 9% |
| Variable incentive pay | **123** | 93 | 10 | 103 | 20 | 19% |
| Aircraft maintenance | **460** | 251 | 151 | 402 | 58 | 14% |
| Aircraft rent | **126** | 93 | 30 | 123 | 3 | 2% |
| Landing fees and rentals | **520** | 338 | 96 | 434 | 86 | 20% |
| Contracted services | **291** | 203 | 65 | 268 | 23 | 9% |
| Selling expenses | **205** | 161 | 61 | 222 | (17) | (8)% |
| Depreciation and amortization | **393** | 254 | 108 | 362 | 31 | 9% |
| Food and beverage service | **182** | 125 | 45 | 170 | 12 | 7% |
| Third-party regional carrier expense | **133** | 118 |  | 118 | 15 | 13% |
| Other | **508** | 391 | 125 | 516 | (8) | (2)% |
| **Total non-fuel operating expenses, excluding special items** | $**5233** | $3613 | $1208 | $4821 | $412 | 9% |

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(a) Pro forma six months ended June 30, 2024 can be calculated by adding the three months ended March 31, 2024 and June 30, 2024 as provided on Form 8-K filed with the SEC on January 22, 2025, including certain immaterial reclassification and policy adjustments.

***Wages and benefits***

The primary components of wages and benefits, including a reconciliation of 2024 on a pro forma basis, are shown in the following table:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Change** | **Change** |
| ***(in millions)*** | **2025** | **2024 As Reported** | **2024 Hawaiian Airlines** | **2024 Pro forma** | **$ Change** | **% Change** |
| Wages | $**1735** | $1201 | $385 | $1586 | $149 | 9% |
| Pension - Defined benefit plans | **14** | 14 | 6 | 20 | (6) | (30)% |
| Defined contribution plans | **171** | 118 | 41 | 159 | 12 | 8% |
| Medical and other benefits | **246** | 165 | 54 | 219 | 27 | 12% |
| Payroll taxes | **126** | 88 | 31 | 119 | 7 | 6% |
| **Total Wages and benefits** | $**2292** | $1586 | $517 | $2103 | $189 | 9% |

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On a pro forma basis, wages and benefits increased by $189 million, or 9%, driven by increased headcount and higher wage rates across multiple labor groups since the second quarter of 2024. Increases were partially offset by nonrecurring wages from irregular operations following the B737-9 grounding in the first quarter of 2024.

Medical and other benefits expense increased $27 million, or 12%, driven by an increase in the cost of medical services and higher obligations under our pilots long-term disability plan.

***Variable incentive pay***

On a pro forma basis, variable incentive pay increased $20 million, or 19%, due to the inclusion of Hawaiian employees in the Company's Performance-Based Pay program in 2025, as well as an increased wage base.

***Aircraft maintenance***

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On a pro forma basis, aircraft maintenance increased $58 million, or 14%, driven by increased utilization of aircraft resulting in increased heavy checks and engine events since the second quarter of 2024. Higher rates on engine maintenance and additional materials on cabin refresh projects also contributed to the increase.

***Landing fees and other rentals***

On a pro forma basis, landing fees and other rentals increased $86 million, or 20%, driven primarily by nonrecurring favorable settlements received from certain airports in 2024. Increased terminal rents driven by higher rates and growth throughout the combined network, as well as increased volume of departures and landed weight also contributed to the increase.

***Contracted services***

On a pro forma basis, contracted services increased $23 million, or 9%, driven by higher rates charged by vendors as well as increased passengers throughout our combined network.

***Selling expenses***

On a pro forma basis, selling expenses decreased $17 million, or 8%, primarily driven by improved rates on credit card vendor rebates. Lower marketing costs also contributed to this decrease.

***Depreciation and amortization***

On a pro forma basis, depreciation and amortization increased $31 million, or 9%, primarily due to the addition of 19 owned aircraft to our airlines' fleets since the second quarter of 2024. Incremental depreciation on ground service and other equipment also contributed to the increase.

***Third-party regional carrier expense***

Third-party regional carrier expense, which represents payments made to SkyWest under the CPA with Alaska, increased $15 million, or 13%, driven by incremental departures and block hours operated by SkyWest.

***Other***

On a pro forma basis, other expense decreased $8 million, or 2%, primarily due to the gain on sale of four B737-900 aircraft in the second quarter of 2025, as well as nonrecurring passenger remuneration and crew hotel costs due to the B737-9 grounding in the first quarter of 2024. Higher professional services and software costs partially offset this decrease.

***Special items - operating***

On a pro forma basis, special items decreased $47 million, or 24%, driven by nonrecurring costs in 2024 associated with Alaska flight attendant retroactive pay, the retirement of Alaska's Airbus and Horizon Q400 aircraft, and certain litigation matters. Contractual changes to Alaska flight attendants' sick leave benefits in the first quarter of 2025 and increased integration costs associated with the acquisition of Hawaiian Airlines partially offset this decrease. Refer to Note 12 to the consolidated financial statements for details.

**Additional Segment Information**

Refer to Note 11 to the unaudited condensed consolidated financial statements for a detailed description of each segment and a reconciliation of segment results to consolidated Air Group results. Below is a summary of each segment's results for the six months ended June 30, 2025.

***Alaska Airlines***

Alaska Airlines reported a pretax profit, excluding special items and other adjustments, of $224 million in the first six months of 2025, compared to a profit of $241 million in the same period in 2024. The $17 million decrease was primarily driven by $245 million in increased non-fuel operating expenses, due largely to higher wages and increased variable costs. Increased revenue of $90 million, driven by higher yield, and lower fuel costs of $149 million, driven by lower per gallon costs, partially

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offset the decrease in profit. Prior year results were negatively impacted by $150 million due to the B737-9 grounding in the first quarter of 2024.

***Hawaiian Airlines***

Hawaiian Airlines reported a pretax loss, excluding special items and other adjustments, of $87 million in the first six months of 2025, compared to a loss on a pro forma basis of $256 million in the same period in 2024. The $169 million increase was driven by $227 million in increased revenue, driven by higher traffic and yield due to the optimization of Hawaiian assets in Air Group's combined network, as well as continued recovery following the 2023 Maui wildfires. Lower fuel costs of $35 million, driven by lower per gallon costs, also contributed to the improvement. These amounts were partially offset by increased non-fuel operating expenses of $80 million associated with increased capacity.

***Regional***

Regional reported a pretax loss, excluding special items and other adjustments, of $15 million in the first six months of 2025, compared to a profit of $37 million in the same period in 2024. The $52 million decrease was primarily due to $79 million in increased non-fuel operating expenses associated with increased capacity. It was partially offset by $18 million in increased revenue as incremental traffic mitigated the impact of a weaker yield environment, and lower fuel costs of $9 million, driven by lower per gallon costs.

**LIQUIDITY AND CAPITAL RESOURCES**

As of June 30, 2025, we had cash and marketable securities of $2.2 billion. Our airlines have 115 unencumbered aircraft, which can be financed if necessary, and an $850 million bank line-of-credit facility with no outstanding borrowings. We expect our current cash and marketable securities balance, combined with our available sources of liquidity, to be sufficient to fund our liquidity needs for the next 12 months. We expect to meet our liquidity needs for the foreseeable future using cash flows from our operations, our available sources of liquidity, and future financing arrangements. We discuss our sources and uses of cash in more detail below.

In June 2025, Alaska entered into an agreement with a third-party to sell its 12 B737-900 aircraft. Four of the aircraft were sold to the third party in the second quarter. The Company received proceeds of approximately $53 million and recognized a gain of approximately $25 million. The gain was classified within Other operating expenses in the consolidated statements of operations. As of June 30, 2025, five of the remaining aircraft had been removed from operating service and were classified as held for sale within Other current assets in the consolidated balance sheet. The final three aircraft will be removed from operating service in the third quarter and all sales are expected to be completed in 2025.

***Operating cash flows***

Cash provided by operating activities was $835 million during the first six months of 2025. Advance ticket sales and our co-branded credit card agreements are the primary sources of our operating cash flow. Our primary use of operating cash flow is for operating expenses, including payments for employee wages and benefits, aircraft fuel, payments to suppliers for goods and services, payments to lessors and airport authorities for leased aircraft, rents, and landing fees, and interest expense for our debt obligations. Additionally, we paid more than $300 million to employees in recognition of their 2024 Performance-Based Pay program achievements.

***Investing cash flows***

Capital expenditures to acquire aircraft, flight equipment, and other property and equipment are the primary purpose of our investing cash flow. We plan to incur approximately $1.4 billion to $1.6 billion in capital expenditures for 2025. We discuss our aircraft-related commitments in more detail below.

Cash used in investing activities was $747 million during the first six months of 2025. Property and equipment expenditures were $741 million, driven by the addition of new aircraft as well as other equipment purchases. Net purchases of marketable securities were $79 million in 2025. These amounts were partially offset by other investing cash inflows of $73 million, including proceeds from the sale of four B737-900 aircraft.

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***Financing cash flows***

Cash provided by new financing arrangements is the primary source of our financing cash flow. Our primary uses of financing cash flow are payments of our debt and finance lease obligations, as well as share repurchases. Refer to Note 5 to the unaudited condensed consolidated financial statements for a detailed discussion of our debt balances, including a schedule outlining the time period of future payments.

Cash used in financing activities was $544 million during the first six months of 2025. Cash used for share repurchases was $535 million, and debt payments were $236 million. These outflows were partially offset by proceeds from new financing arrangements, net of debt issuance costs, of $168 million.

***Indicators of financial condition and liquidity***

The Company's liquidity target is between 15% and 25% of the trailing twelve months' revenue. This percentage was elevated as of December 31, 2024 as it did not include a full year of Hawaiian revenue, but has returned to normal levels as of June 30, 2025.

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

---

| | | | |
|:---|:---|:---|:---|
| ***(in millions)*** | **June 30, 2025** | **December 31, 2024** | **Change** |
| Cash, marketable securities, and unused lines of credit<sup>(a)</sup> | $**2974** | $3325 | (11)% |
| Trailing twelve months' revenue<sup>(b)</sup> | $**13447** | $11735 | 15% |
| Liquidity as a percentage of trailing twelve months' revenue | **22%** | 28% | (6) pts |
| Long-term debt, net of current portion | $**4448** | $4491 | (1)% |
| Shareholders' equity | $**3942** | $4372 | (10)% |

---

(a) Excludes restricted cash of $28 million as of June 30, 2025 and $29 million as of December 31, 2024.

(b) Trailing twelve months' revenue as of June 30, 2025 can be reconciled using the most recent four quarters as filed with the SEC.

---

| | | | |
|:---|:---|:---|:---|
| **Debt-to-capitalization, including leases** | | | |
| ***(in millions)*** |<br>**June 30, 2025** |<br>**December 31, 2024** |<br>**Change** |
| Long-term debt, net of current portion | $**4448** | $4491 | (1)% |
| Capitalized operating leases | **1374** | 1405 | (2)% |
| Capitalized finance leases | **51** | 55 | (7)% |
| Adjusted debt, net of current portion of long-term debt | $**5873** | $5951 | (1)% |
| Shareholders' equity | **3942** | 4372 | (10)% |
| Total invested capital | $**9815** | $10323 | (5)% |
| **Debt-to-capitalization ratio, including leases** | **60%** | 58% | 2 pts |

---

------

***Material cash commitments***

We have various contractual obligations that require material future outlays of cash. These obligations include the purchase of aircraft and other flight equipment, payments for Alaska's CPA with SkyWest, debt service payments, lease payments for aircraft and other property and equipment, costs for aircraft and engine maintenance, sponsorship and license agreements, and other miscellaneous agreements for services associated with operating and marketing our airlines. We also anticipate we may have material cash outlays associated with new technologies for the future of the business. Currently, Alaska and Hawaiian have agreements to purchase sustainable aviation fuel (SAF) to be delivered in the coming years. These agreements are dependent on suppliers' ability to obtain all required governmental and regulatory approvals, achieve commercial operation, and produce sufficient quantities of SAF. We expect to satisfy these obligations using cash flows from our operations, our available sources of liquidity, and future financing arrangements.

Within the notes accompanying our unaudited condensed consolidated financial statements, refer to Note 5 for discussion of scheduled debt obligations and Note 7 for discussion of aircraft-related purchase commitments and CPA obligations.

As of June 30, 2025, Alaska had firm orders to purchase 75 B737 aircraft with deliveries expected between 2025 and 2029. Hawaiian had firm orders to purchase 8 B787-9 aircraft with deliveries expected between 2025 and 2027. Horizon had firm orders to purchase 3 E175 aircraft with deliveries expected in 2026.

Boeing has communicated that certain B737 and B787-9 aircraft are expected to be delivered later than the contracted delivery timing. For Alaska, this includes certain B737-8 aircraft contracted for delivery in 2025 that have moved later in the contracted year or into 2026, and B737-10 aircraft contracted for delivery between 2025 and 2027 that have moved to between 2027 and 2029, pending certification of the aircraft type. For Hawaiian, this includes certain B787-9 aircraft contracted for delivery between 2025 and 2026 that have moved to between later in 2025 and 2027. Management expects that other Boeing aircraft deliveries could be delayed beyond the contractual delivery. The tables below reflect Boeing's communications and management's internal expectations.

------

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Actual Fleet** | **Anticipated Fleet Activity** | **Anticipated Fleet Activity** | **Anticipated Fleet Activity** | **Anticipated Fleet Activity** | **Anticipated Fleet Activity** | **Anticipated Fleet Activity** |
| **Aircraft** | **June 30, 2025** | **2025 Changes** | **Dec 31, 2025** | **2026 Changes** | **Dec 31, 2026** | **2027 Changes** | **Dec 31, 2027** |
| **Alaska Airlines Fleet:** | | | | | | | |
| B737-700 Freighters | 3 |  | 3 |  | 3 |  | 3 |
| B737-800 Freighters | 2 |  | 2 |  | 2 |  | 2 |
| B737-700 | 11 |  | 11 |  | 11 |  | 11 |
| B737-800 | 59 |  | 59 |  | 59 |  | 59 |
| B737-900 | 3 | (3) |  |  |  |  |  |
| B737-900ER | 79 |  | 79 |  | 79 |  | 79 |
| B737-8 | 8 | 6 | 14 | 6 | 20 |  | 20 |
| B737-9 | 80 |  | 80 |  | 80 |  | 80 |
| B737-10 |  |  |  |  |  | 36 | 36 |
| &nbsp;&nbsp;**Total Alaska Airlines Fleet** | **245** | **3** | **248** | **6** | **254** | **36** | **290** |
| **Hawaiian Airlines Fleet:** |  |  |  |  |  |  |  |
| A330-300 Freighters<sup>(a)</sup> | 10 |  | 10 |  | 10 |  | 10 |
| A330-200 | 24 |  | 24 |  | 24 |  | 24 |
| A321neo | 18 |  | 18 |  | 18 |  | 18 |
| B717-200 | 19 |  | 19 |  | 19 |  | 19 |
| B787-9 | 4 | 1 | 5 | 2 | 7 | 3 | 10 |
| &nbsp;&nbsp;**Total Hawaiian Airlines Fleet** | **75** | **1** | **76** | **2** | **78** | **3** | **81** |
| **Regional Fleet:** |  |  |  |  |  |  |  |
| E175 operated by Horizon | 47 |  | 47 | 3 | 50 |  | 50 |
| E175 operated by third party | 42 | 1 | 43 |  | 43 |  | 43 |
| &nbsp;&nbsp;&nbsp;**Total Regional Fleet** | **89** | **1** | **90** | **3** | **93** | **—** | **93** |
| **Total Air Group Fleet** | **409** | **5** | **414** | **11** | **425** | **39** | **464** |

---

(a) A330-300 freighter aircraft to be utilized under the ATSA with Amazon.

**GAAP TO NON-GAAP RECONCILIATIONS AND OPERATING STATISTICS**

We are providing reconciliations of reported non-GAAP financial measures to their most directly comparable financial measures reported on a GAAP basis. We believe that consideration of these non-GAAP financial measures may be important to investors for the following reasons:

**•** By excluding certain costs from our unit metrics, we believe that we have better visibility into the results of operations. Our industry is highly competitive and is characterized by high fixed costs, so even a small reduction in non-fuel operating costs can result in a significant improvement in operating results. We believe that all U.S. carriers are similarly impacted by changes in jet fuel costs over the long run, so it is important for management and investors to understand the impact of company-specific cost drivers which are more controllable by management. We adjust for expenses related directly to our freighter aircraft operations, including those costs incurred under the ATSA with Amazon, to allow for better comparability to other carriers that do not operate freighter aircraft. We also exclude certain special charges as they are unusual or nonrecurring in nature and adjusting for these expenses allows management and investors to better understand our cost performance.

**•** CASMex is one of the most important measures used by management and by the Air Group Board of Directors in assessing cost performance. CASMex is also a measure commonly used by industry analysts, and we believe it is the basis by which they have historically compared our airline to others in the industry. The measure is also the subject of frequent questions from investors.

**•** Adjusted pretax income is an important metric for the employee incentive plan, which covers the majority of Air Group employees.

------

**•** Disclosure of the individual impact of certain noted items provides investors the ability to measure and monitor performance both with and without these special items. We believe that disclosing the impact of these items as noted above is important because it provides information on significant items that are not necessarily indicative of future performance. Industry analysts and investors consistently measure our performance without these items for better comparability between periods and among other airlines.

• Although we disclose our unit revenue, we do not, nor are we able to, evaluate unit revenue excluding the impact that changes in fuel costs have had on ticket prices. Fuel expense represents a large percentage of our total operating expenses. Fluctuations in fuel prices often drive changes in unit revenue in the mid-to-long term. Although we believe it is useful to evaluate non-fuel unit costs for the reasons noted above, we would caution readers of these financial statements not to place undue reliance on unit costs excluding fuel as a measure or predictor of future profitability because of the significant impact of fuel costs on our business.

Although we are presenting these non-GAAP amounts for the reasons above, investors and other readers should not consider them a substitute for GAAP figures.

**GAAP TO NON-GAAP RECONCILIATIONS (unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| ***(in millions)*** | **2025** | **2024** | **2025** | **2024** |
| Income before income tax | $**238** | $316 | $**5** | $138 |
| Adjusted for: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mark-to-market fuel hedge adjustment | **(1)** | (5) | **(4)** | (18) |
| &nbsp;&nbsp;&nbsp;&nbsp;Losses on foreign debt | **2** |  | **7** |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Special items - operating | **56** | 146 | **147** | 180 |
| **Adjusted income before income tax** | $**295** | $457 | $**155** | $300 |
| Pretax margin | **6.4%** | 10.9% | **0.1%** | 2.7% |
| Adjusted pretax margin | **8.0%** | 15.8% | **2.3%** | 5.8% |

---

------

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** |
| | **2025** | **2025** | **2024** | **2024** |
| ***(in millions, except per share amounts)*** | **Dollars** | **Per Share** | **Dollars** | **Per Share** |
| Net income | $**172** | $**1.42** | $220 | $1.71 |
| Adjusted for: |  |  |  |  |
| &nbsp;&nbsp;Mark-to-market fuel hedge adjustments | **(1)** | **(0.01)** | (5) | (0.04) |
| &nbsp;&nbsp;Losses on foreign debt | **2** | **0.02** |  |  |
| &nbsp;&nbsp;Special items - operating | **56** | **0.46** | 146 | 1.14 |
| &nbsp;&nbsp;Income tax effect of adjustments above | **(14)** | **(0.11)** | (34) | (0.26) |
| **Adjusted net income** | $**215** | $**1.78** | $327 | $2.55 |
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2025** | **2024** | **2024** |
| ***(in millions, except per share amounts)*** | **Dollars** | **Per Share** | **Dollars** | **Per Share** |
| Net income | $**6** | $**0.05** | $88 | $0.69 |
| Adjusted for: |  |  |  |  |
| &nbsp;&nbsp;Mark-to-market fuel hedge adjustments | **(4)** | **(0.03)** | (18) | (0.14) |
| &nbsp;&nbsp;Losses on foreign debt | **7** | **0.05** |  |  |
| &nbsp;&nbsp;Special items - operating | **147** | **1.19** | 180 | 1.41 |
| &nbsp;&nbsp;Income tax effect of adjustments above | **(36)** | **(0.29)** | (39) | (0.31) |
| **Adjusted net income** | $**120** | $**0.97** | $211 | $1.65 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| ***(in millions, except unit metrics)*** | **2025** | **2025** | **2024** | **2024** | **2025** | **2025** | **2024** | **2024** |
| Total operating expenses | $**3427** |  | $2575 |  | $**6761** |  | $4973 |  |
| Less the following components: |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Aircraft fuel, including hedging gains and losses | **700** |  | 615 |  | **1381** |  | 1180 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Freighter costs | **48** |  | 13 |  | **89** |  | 28 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Special items - operating | **56** |  | 146 |  | **147** |  | 180 |  |
| **Total operating expenses, excluding fuel, freighter costs, and special items** | $**2623** |  | $1801 |  | $**5144** |  | $3585 |  |
| ASMs | **24058** |  | 18196 |  | **45277** |  | 33575 |  |
| CASMex | **10.90** | **¢** | 9.89 | ¢ | **11.36** | **¢** | 10.67 | ¢ |

---

------

**OPERATING STATISTICS (unaudited)**

Below are operating statistics we use to measure operating performance. Figures for the three and six months ended June 30, 2024 are as previously reported and do not include Hawaiian operations.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| | **2025** | **2024** | **Change** | **2025** | **2024** | **Change** |
| **Consolidated Operating Statistics**<sup>(a)</sup>**:** |  |  |  |  |  |  |
| Revenue passengers (000) | **15234** | 11888 | 28.1% | **28393** | 21662 | 31.1% |
| RPMs (000000) "traffic" | **20179** | 15309 | 31.8% | **37436** | 27833 | 34.5% |
| ASMs (000000) "capacity" | **24058** | 18196 | 32.2% | **45277** | 33575 | 34.9% |
| Load factor | **83.9%** | 84.1% | (0.2) pts | **82.7%** | 82.9% | (0.2) pts |
| Yield | **16.62¢** | 17.32¢ | (4.0)% | **16.46¢** | 16.73¢ | (1.6)% |
| PRASM | **13.94¢** | 14.57¢ | (4.3)% | **13.61¢** | 13.86¢ | (1.8)% |
| RASM | **15.39¢** | 15.92¢ | (3.3)% | **15.11¢** | 15.28¢ | (1.1)% |
| CASMex | **10.90¢** | 9.89¢ | 10.2% | **11.36¢** | 10.67¢ | 6.5% |
| Economic fuel cost per gallon<sup>(b)(c)</sup> | **$2.39** | $2.84 | (15.8)% | **$2.49** | $2.95 | (15.6)% |
| Fuel gallons (000000)<sup>(c)</sup> | **293** | 219 | 33.8% | **556** | 406 | 36.9% |
| ASMs per gallon | **82.0** | 83.1 | (1.3)% | **81.5** | 82.7 | (1.5)% |
| Departures (000) | **139.6** | 112.4 | 24.2% | **263.5** | 208.1 | 26.6% |
| Average full-time equivalent employees (FTEs) | **31299** | 23368 | 33.9% | **30536** | 23190 | 31.7% |
| Operating fleet<sup>(d)</sup> | **409** | 326 | 83 a/c | **409** | 326 | 83 a/c |
| **Alaska Airlines Operating Statistics:** |  |  |  |  |  |  |
| RPMs (000000) "traffic" | **13735** | 14001 | (1.9)% | **25458** | 25423 | 0.1% |
| ASMs (000000) "capacity" | **16449** | 16624 | (1.1)% | **30794** | 30660 | 0.4% |
| Economic fuel cost per gallon | **$2.39** | $2.80 | (14.6)% | **$2.49** | $2.92 | (14.7)% |
| **Hawaiian Airlines Operating Statistics:** |  |  |  |  |  |  |
| RPMs (000000) "traffic" | **5034** |  | n/a | **9341** |  | n/a |
| ASMs (000000) "capacity" | **5901** |  | n/a | **11267** |  | n/a |
| Economic fuel cost per gallon<sup>(c)</sup> | **$2.29** |  | n/a | **$2.39** |  | n/a |
| **Regional Operating Statistics:**<sup>(e)</sup> |  |  |  |  |  |  |
| RPMs (000000) "traffic" | **1410** | 1308 | 7.8% | **2637** | 2410 | 9.4% |
| ASMs (000000) "capacity" | **1708** | 1572 | 8.7% | **3216** | 2915 | 10.3% |
| Economic fuel cost per gallon | **$2.58** | $3.02 | (14.6)% | **$2.68** | $3.13 | (14.4)% |

---

(a)Except for FTEs, data includes information related to third-party regional capacity purchase flying arrangements.

(b)See reconciliation of this non-GAAP measure to the most directly related GAAP measure in the accompanying pages.

(c)Excludes operations under the Air Transportation Services Agreement (ATSA) with Amazon.

(d)Includes aircraft owned and leased by Alaska, Hawaiian, and Horizon as well as aircraft operated by third-party regional carriers under capacity purchase agreements. Excludes all aircraft removed from operating service.

(e)Data presented includes information related to flights operated by Horizon and third-party carriers.

**CRITICAL ACCOUNTING ESTIMATES**

There have been no material changes to our critical accounting estimates during the three and six months ended June 30, 2025. For information regarding our critical accounting estimates, see Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2024.

------

**GLOSSARY OF TERMS**

**Aircraft Utilization** - block hours per day; this represents the average number of hours per day our aircraft are in transit

**Aircraft Stage Length** - represents the average miles flown per aircraft departure

**ASMs** - available seat miles, or "capacity"; represents total seats available across the fleet multiplied by the number of miles flown

**CASM** - operating costs per ASM; represents all operating expenses including fuel, freighter costs, and special items

**CASMex** - operating costs excluding fuel, freighter costs, and special items per ASM, or "unit cost"

**Debt-to-capitalization ratio** - represents adjusted debt (long-term debt plus capitalized operating and finance lease liabilities) divided by total equity plus adjusted debt

**Diluted Earnings per Share** - represents earnings per share (EPS) using fully diluted shares outstanding

**Diluted Shares** - represents the total number of shares that would be outstanding if all possible sources of conversion, such as stock options, were exercised

**Economic Fuel** - best estimate of the cash cost of fuel, net of the impact of our fuel-hedging program and excluding operations under the Air Transportation Service Agreement (ATSA) with Amazon

**Freighter Costs -** operating expenses directly attributable to the operation of Alaska's B737 freighter aircraft and Hawaiian's A330-300 freighter aircraft exclusively performing cargo missions

**Load Factor** - RPMs as a percentage of ASMs; represents the number of available seats that were filled with revenue passengers

**PRASM** - passenger revenue per ASM, or "passenger unit revenue"

**RASM** - operating revenue per ASMs, or "unit revenue"; operating revenue includes all passenger revenue, freight & mail, loyalty program revenue, and other ancillary revenue; represents the average total revenue for flying one seat one mile

**RPMs** - revenue passenger miles, or "traffic"; represents the number of seats that were filled with revenue passengers; one passenger traveling one mile is one RPM

**Yield** - passenger revenue per RPM; represents the average passenger revenue for flying one passenger one mile

------

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK**

There have been no material changes in market risk from the information provided in Item 7A. "Quantitative and Qualitative Disclosure About Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2024.

------

**ITEM 4. CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

As of June 30, 2025, an evaluation was performed under the supervision and with the participation of our management, including our chief executive officer and chief financial officer (collectively, our "certifying officers"), of the effectiveness of the design and operation of our disclosure controls and procedures. These disclosure controls and procedures are designed to ensure that the information required to be disclosed by us in our periodic reports filed with or submitted to the Securities and Exchange Commission (the SEC) is recorded, processed, summarized and reported within the time periods specified by the SEC's rules and forms, and includes, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to our management, including our certifying officers, as appropriate, to allow timely decisions regarding required disclosure. Our certifying officers concluded, based on their evaluation, that disclosure controls and procedures were effective as of June 30, 2025.

**Changes in Internal Control over Financial Reporting**

On September 18, 2024, we acquired Hawaiian Holdings, Inc. As of the date of this Quarterly Report on Form 10-Q, we are making progress in further integrating Hawaiian in our evaluation of internal controls over financial reporting for the combined company. As the integration continues and business processes evolve, management will continue to evaluate the existing internal controls over financial reporting for change.

On June 23, 2025, Hawaiian Airlines identified a cybersecurity incident affecting certain information technology systems. As a result of this cybersecurity incident, we performed certain alternative controls and procedures, and additional compensating controls, to support management's assessment that the financial and other information included within this report is materially accurate.

Except as noted above, there have been no changes in the Company's internal controls over financial reporting during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Our internal control over financial reporting is based on the 2013 framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO Framework).

------

**PART II**

**ITEM 1. LEGAL PROCEEDINGS**

See Note 7 to the unaudited condensed consolidated financial statements within Part I, Item 1 of this document for a discussion of the Company's ongoing legal proceedings.

**ITEM 1A. RISK FACTORS**

See Part I, Item 1A. "Risk Factors," in our 2024 Form 10-K for a detailed discussion of risk factors affecting Alaska Air Group.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS**

The below table provides certain information with respect to our purchases of shares of our common stock during the second quarter of 2025. The shares were purchased pursuant to a $1 billion repurchase plan authorized by the Board of Directors in December 2024.

---

| | | | |
|:---|:---|:---|:---|
| | **Total Number of<br>Shares Purchased** | **Average Price<br>Paid per Share** | **Maximum remaining**<br>**dollar value of shares**<br>**that can be purchased**<br>**under the plan** <br>***(in millions)*** |
| April 1, 2025 - April 30, 2025 | 2521296 | $44.02 |  |
| May 1, 2025 - May 31, 2025 | 4531750 | 50.99 |  |
| June 1, 2025 - June 30, 2025 | 1667963 | 51.05 |  |
| &nbsp;&nbsp;&nbsp;**Total** | 8721009 | $48.99 | $465 |

---

**ITEM 3. DEFAULTS UPON SENIOR SECURITIES**

None.

**ITEM 4. MINE SAFETY DISCLOSURES**

None.

**ITEM 5. OTHER INFORMATION**

During the three months ended June 30, 2025, no director or officer of Alaska Air Group adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement, as such terms are defined in Item 408(a) of Regulation S-K promulgated under the Securities Exchange Act of 1934.

**ITEM 6. EXHIBITS**

The following documents are filed as part of this report:

------

**EXHIBIT INDEX**

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Exhibit<br>Number** | **Exhibit<br>Description** | **Form** | **Date of First Filing** | **Exhibit Number** |
| 3.1 | <u>[Amended and Restated Certificate of Incorporation of Registrant](https://www.sec.gov/Archives/edgar/data/766421/000076642117000049/alk10-q22017ex31.htm)</u> | 10-Q | August 3, 2017 | 3.1 |
| 3.2 | <u>[Amended and Restated Bylaws of Registrant](https://www.sec.gov/Archives/edgar/data/766421/000076642115000054/alk8-kex32amendedandrestat.htm)</u> | 8-K | December 15, 2015 | 3.2 |
| 4.1† | <u>[Description of Capital Stock](ex41alaska-descriptionofca.htm)</u> | 10-Q |  |  |
| 10.1#† | <u>[Supplemental Agreement No. 27 to Purchase Agreement No. 3866 between](ex101supplementalagreement.htm)[T](ex101supplementalagreement.htm)[he Boeing Company and Alaska Airlines, Inc.](ex101supplementalagreement.htm)</u> | 10-Q |  |  |
| 10.2#† | <u>[Supplemental Agreement No. 7 to Purchase Agreement No. PA-04749 between](ex102supplementalagreement.htm)[T](ex102supplementalagreement.htm)[he Boeing Company and Hawaiian Airlines, Inc.](ex102supplementalagreement.htm)</u> | 10-Q |  |  |
| 10.3#† | <u>[Supplemental Agreement No. 8 to Purchase Agreement No. PA-04749 between](ex103supplementalagreement.htm)[T](ex103supplementalagreement.htm)[he Boeing Company and Hawaiian Airlines, Inc.](ex103supplementalagreement.htm)</u> | 10-Q |  |  |
| 10.4\*† | <u>[Alaska Air Group Performance Based Pay Plan, Amended and Restated May 8, 2025](ex104pbpplanamendedrestate.htm)</u> | 10-Q |  |  |
| 10.5\*† | <u>[Alaska Air Group Operational Performance Rewards Plan Description, adopted January 3, 2005; Amended May 5, 2025](ex105oprplandocument-amend.htm)</u> | 10-Q |  |  |
| 10.6\*† | <u>[Alaska Air Group, Inc. Employee Stock Purchase Plan, as Amended for the Offering Period Commencing November 1, 2025](ex106exb_alk-esppplandocum.htm)</u> | 10-Q |  |  |
| 10.7\*† | <u>[Alaska Air Group, Inc. 2016 Performance Incentive Plan, Form of Nonqualified Stock Option Agreement](ex107amendmenttoalaskaairn.htm)</u> | 10-Q |  |  |
| 10.8\*† | <u>[Alaska Air Group, Inc. 2016 Performance Incentive Plan, Amended May 8, 2025](ex108exa_alk-2016performan.htm)</u> | 10-Q |  |  |
| 31.1† | <u>[Certification of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](alk10-q22025ex311.htm)</u> | 10-Q |  |  |
| 31.2† | <u>[Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](alk10-q22025ex312.htm)</u> | 10-Q |  |  |
| 32.1† | <u>[Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](alk10-q22025ex321.htm)</u> | 10-Q |  |  |
| 32.2† | <u>[Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](alk10-q22025ex322.htm)</u> | 10-Q |  |  |
| 101.INS† | XBRL Instance Document - The instance document does not appear in the interactive data file because XBRL tags are embedded within the inline XBRL document. |  |  |  |
| 101.SCH† | XBRL Taxonomy Extension Schema Document |  |  |  |
| 101.CAL† | XBRL Taxonomy Extension Calculation Linkbase Document |  |  |  |
| 101.DEF† | XBRL Taxonomy Extension Definition Linkbase Document |  |  |  |
| 101.LAB† | XBRL Taxonomy Extension Label Linkbase Document |  |  |  |
| 101.PRE† | XBRL Taxonomy Extension Presentation Linkbase Document |  |  |  |
| 104† | Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. |  |  |  |
| † | Filed herewith | Filed herewith | Filed herewith | Filed herewith |
| \* | Indicates management contract or compensatory plan or arrangement. | Indicates management contract or compensatory plan or arrangement. | Indicates management contract or compensatory plan or arrangement. | Indicates management contract or compensatory plan or arrangement. |
| # | Certain portions of this document that constitute confidential information have been redacted in accordance with Regulation S-K Item 601(b)(10). | Certain portions of this document that constitute confidential information have been redacted in accordance with Regulation S-K Item 601(b)(10). | Certain portions of this document that constitute confidential information have been redacted in accordance with Regulation S-K Item 601(b)(10). | Certain portions of this document that constitute confidential information have been redacted in accordance with Regulation S-K Item 601(b)(10). |

---

------

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

---

| |
|:---|
| ALASKA AIR GROUP, INC. |
| /s/ EMILY HALVERSON |
| **Emily Halverson** |
| Vice President Finance, Controller, and Treasurer |
| August 7, 2025 |

---

## Exhibit 4.1

**DESCRIPTION OF CAPITAL STOCK**

*References to "we," "us" and "our" in this section refer to Alaska Air Group, Inc.*

**General**

The following is a summary of the rights of our common stock and preferred stock and of certain provisions of our amended and restated certificate of incorporation (as amended, our "certificate of incorporation"), our amended and restated bylaws (our "bylaws"), and certain provisions of applicable law. The following description is only a summary and does not purport to be complete and is qualified by reference to our certificate of incorporation and our bylaws, which are filed as exhibits to our Quarterly Report on Form 10-Q for the quarter ended June 30, 2025.

**Authorized Capitalization**

Our authorized capital stock consists of 405,000,000 shares, all with a par value of $0.01 per share, of which:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 400,000,000 shares are designated as common stock; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 5,000,000 shares are designated as preferred stock.

**Common Stock**

As of July 31, 2025, 144,127,851 shares of our common stock were issued, and 115,310,451 shares of our common stock were outstanding. As of July 31, 2025, there were also 2,885,340 shares of common stock subject to outstanding stock options, restricted stock units, performance share units and deferred stock units under our equity incentive plans.

*Voting*

The holders of our common stock are entitled to one vote per share on all matters to be voted on by our stockholders. Our bylaws provide that, except as otherwise provided, the affirmative vote of the holders of a majority of the stock present in person or represented by proxy and entitled to vote on the subject matter shall be the act of stockholders. For the election of directors, our bylaws provide that each director is elected by a majority of the votes cast with respect to the director's election at any meeting of stockholders for the election of directors at which a quorum is present; provided that if, as of the tenth day preceding the date the notice of the meeting of stockholders is first sent to stockholders, the number of nominees for director exceeds the number of directors to be elected, directors will instead be elected by a plurality of shares represented in person or by proxy at the meeting and entitled to vote on the election of directors. Stockholders are not entitled to cumulate their votes at any election of directors.

*Dividends*

Subject to preferences that may be applicable to any then outstanding preferred stock, holders of common stock are entitled to receive dividends, if any, as may be declared from time to time by our board of directors out of legally available funds.

*Liquidation*

In the event of our liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all of our debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then outstanding shares of preferred stock.

*Rights and Preferences*

Holders of common stock have no preemptive, conversion, subscription or other rights, and there are no redemption or sinking fund provisions applicable to the common stock. The rights, preferences and privileges of the holders of common stock are subject to and may be adversely affected by, the rights of the holders of shares of any series of preferred stock that we may designate in the future.

*Fully Paid and Nonassessable*

All of our outstanding shares of common stock are fully paid and nonassessable.

------

*Foreign Ownership Limitation*

&nbsp;&nbsp;&nbsp;&nbsp;To facilitate our compliance with applicable U.S. federal law, our certificate of incorporation provides that at no time shall any person who does not meet the definition of "a citizen of the United States," as such term is defined in Section 40102(a)(15) of Title 49 of the United States Code, in any similar legislation of the United States enacted in substitution or replacement therefor, and as interpreted by the U.S. Department of Transportation, its predecessor and any successor agency (each, a "non-U.S. citizen"), individually or in the aggregate, own (beneficially or of record) and/or control more than 24.9% of the aggregate voting stock or such other maximum percentage imposed by applicable federal law (the "voting cap amount"). In the event a non-U.S. citizen owns and/or controls more than the voting cap amount, the voting rights of all shares owned (beneficially or of record) and/or controlled by such person exceeding the voting cap amount will automatically be suspended in reverse chronological order based upon the date of registration in our foreign stock record, starting with the most recent registration and moving backwards in time. Such suspension of voting rights shall apply to such shares of voting stock until such time as the aggregate voting rights of non-U.S. citizens (as reflected in the foreign stock record) falls below the voting cap amount.

**Preferred Stock**

Our board of directors has the authority, without further action by our stockholders, to designate and issue up to 5,000,000 shares of preferred stock in one or more series. Our board of directors may also designate the rights, preferences and privileges of each such series of preferred stock, any or all of which may be greater than or senior to those of our common stock. Though the actual effect of any issuance of preferred stock on the rights of the holders of common stock will not be known until our board of directors determines the specific rights of the holders of preferred stock, the potential effects of such an issuance include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• diluting the voting power of the holders of common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reducing the likelihood that holders of common stock will receive dividend payments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reducing the likelihood that holders of common stock will receive payments in the event of our sale, liquidation, dissolution, or winding up; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• delaying, deterring or preventing a change-in-control or other corporate takeover.

**AntiTakeover Effects of Delaware Law and Our Certificate of Incorporation and Bylaws**

Certain provisions of Delaware law and our certificate of incorporation and bylaws contain provisions that could have the effect of delaying, deferring or discouraging another party from acquiring control of us. These provisions, which are summarized below, are expected to discourage certain types of coercive takeover practices and inadequate takeover bids. These provisions are also designed in part to encourage anyone seeking to acquire control of us to negotiate with our board of directors. We believe that the advantages gained by protecting our ability to negotiate with any unsolicited and potentially unfriendly acquirer outweigh the disadvantages of discouraging such proposals, including those priced above the then-current market value of our common stock, because, among other reasons, the negotiation of such proposals could improve their terms.

*Certificate of Incorporation and Bylaws*

Among other things, our certificate of incorporation and/or bylaws include provisions that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• authorize our board of directors to issue, without further action by our stockholders (subject to applicable shareholder approval requirements of the New York Stock Exchange), shares of our common stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• authorize our board of directors to issue, without further action by our stockholders, up to 5,000,000 shares of undesignated preferred stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide that non-U.S. citizens shall at no time own (beneficially or of record) and/or control more than the voting cap amount and that such stock owned and/or controlled in excess of the voting cap amount will be subject to automatic suspension of voting rights in reverse chronological order based upon the date of registration in our foreign stock record;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• require that any action to be taken by our stockholders be effected at a duly called annual or special meeting or by the unanimous written consent of our stockholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• specify that special meetings of our stockholders can be called only by (1) our chair of the board of directors, (2) our board of directors acting pursuant to a resolution adopted by a majority of our board of directors or (3) our board of directors upon written request to our secretary of one or more holders of

------

not less than 10% of our outstanding capital stock entitled to vote on the matter or matters to be brought before the proposed special meeting;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• establish an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• establish a process to allow an eligible stockholder or group of up to 20 eligible stockholders, owning 3% or more of our outstanding common stock continuously for at least three years, to include in our proxy materials for an annual meeting of stockholders their own nominee or nominees for director constituting 20% of our board of directors (rounded down to the nearest whole number, but not less than two); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum.

*Exclusive Forum*

Under the provisions of our bylaws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware, or, if such court does not have subject matter jurisdiction thereof, the federal district court of the State of Delaware, will be the sole and exclusive forum for: (i) any derivative action or proceeding brought on behalf of us; (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee or stockholder to us or our stockholders; (iii) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law (the "DGCL"), the certificate of incorporation or the bylaws as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware; or (iv) any action asserting a claim governed by the internal affairs doctrine.

This exclusive forum provision is intended to apply to claims arising under Delaware state law and would not apply to claims brought pursuant to the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, or any other claim for which the federal courts have exclusive jurisdiction. The exclusive forum provision in our bylaws will not relieve us of our duties to comply with the federal securities laws and the rules and regulations thereunder, and our stockholders will not be deemed to have waived our compliance with these laws, rules and regulations.

*Delaware AntiTakeover Statute*

We are subject to the provisions of Section 203 of the DGCL regulating corporate takeovers. In general, Section 203 prohibits a publicly-held Delaware corporation from engaging, under certain circumstances, in a business combination with an interested stockholder for a period of three years following the date the person became an interested stockholder, unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction that resulted in the stockholder becoming an interested stockholder;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, but not for determining the outstanding voting stock owned by the interested stockholder, (1) shares owned by persons who are directors and also officers, and (2) shares owned by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• at or subsequent to the date of the transaction, the business combination is approved by the board of directors of the corporation and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least 66-2/3% of the outstanding voting stock that is not owned by the interested stockholder.

Generally, a business combination includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. An interested stockholder is a person who, together with affiliates and associates, owns or, within three years prior to the determination of interested stockholder status, did own 15% or more of a corporation's outstanding voting stock. We expect the existence of this provision to have an anti-takeover effect with respect to transactions our board of directors does not approve in advance. We also anticipate that Section 203 may discourage business combinations or other attempts that might result in the payment of a premium over the market price for the shares of common stock held by our stockholders.

The provisions of Delaware law and our certificate of incorporation and bylaws could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our common stock that often result from actual or rumored takeover attempts.

------

These provisions may also have the effect of preventing changes in our management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.

**Transfer Agent and Registrar**

The transfer agent and registrar for our common stock is Computershare.

**Listing**

Our common stock is listed on the New York Stock Exchange under the symbol "ALK".

## Exhibit 10.1

**CERTAIN CONFIDENTIAL PORTIONS HAVE BEEN REDACTED FROM THIS EXHIBIT BECAUSE THEY ARE BOTH (i) NOT MATERIAL AND (ii) IS THE TYPE THAT THE COMPANY TREATS AS PRIVATE OR CONFIDENTIAL. INFORMATION THAT HAS BEEN OMITTED HAD BEEN IDENTIFIED IN THIS DOCUMENT WITH A PLACEHOLDER IDENTIFIED BY THE MARK "[\*\*\*]".**

Supplemental Agreement No. 27 to

Purchase Agreement No. 3866 between

The Boeing Company and

Alaska Airlines, Inc.

Relating to Boeing Models 737-8, 737-9, and 737-10 Aircraft

THIS SUPPLEMENTAL AGREEMENT NO. 27 (**SA-27**), entered into as of

June <u>02</u>, 2025, is by and between THE BOEING COMPANY (**Boeing**) and ALASKA AIRLINES, INC. (**Customer**) (Boeing and Customer collectively, **Parties**). All capitalized terms used but not defined herein shall have the same meaning as in the Purchase Agreement.

WHEREAS, the Parties hereto entered into Purchase Agreement No. 3866 dated October 10, 2012 (as amended and supplemented, **Purchase Agreement**) relating to, among other things, Boeing model 737-8 aircraft (**737-8 Aircraft**), Boeing model 737-9 aircraft (**737-9 Aircraft**) and Boeing model 737-10 aircraft (**737-10 Aircraft**), (collectively, **Aircraft**);

WHEREAS, Customer has provided notice to Boeing to exercise a total of [\*\*\*] with scheduled delivery months described below [\*\*\*]; and

WHEREAS, Customer has earned the ability and elects to convert [\*\*\*] in the scheduled delivery months described below [\*\*\*];

NOW THEREFORE, in consideration of the mutual covenants herein contained, the Parties agree to amend the Purchase Agreement as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.<u>**Table of Contents**</u>

**BOEING PROPRIETARY**<br>

P.A. 3866

ASA

------

The "**Table of Contents**" in the Purchase Agreement is hereby deleted in its entirety and replaced with the revised **Table of Contents**, attached hereto and incorporated into the Purchase Agreement, to reflect the changes made in this SA-27.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<u>2. Tables and Supplemental Exhibits.</u>

The Tables and Supplemental Exhibits in the Purchase Agreement are amended as set forth, to incorporate and reflect the changes made in this SA-27.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 Table [\*\*\*] is hereby deleted in its entirety and replaced with a new Table [\*\*\*] attached hereto that is incorporated into the Purchase Agreement to reflect [\*\*\*] in this SA-27.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 Supplemental Exhibit [\*\*\*] in the Purchase Agreement, entitled [\*\*\*] is hereby deleted in its entirety and replaced with the revised Supplemental Exhibit [\*\*\*], attached hereto and incorporated into the Purchase Agreement to reflect [\*\*\*] in this SA-27.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.<u>Letter Agreement.</u>

&nbsp;&nbsp;&nbsp;&nbsp;3.1 Letter Agreement [\*\*\*] titled [\*\*\*] (including attachments thereto) is hereby deleted in its entirety and replaced with a revised Letter Agreement [\*\*\*] (including attachments thereto), attached hereto, to reflect [\*\*\*] in this SA-27.

&nbsp;&nbsp;&nbsp;&nbsp;3.2 Letter Agreement [\*\*\*] titled [\*\*\*] is hereby deleted in its entirety and replaced with a revised Letter Agreement [\*\*\*], attached hereto, to reflect [\*\*\*] in this SA-27.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.<u>Miscellaneous.</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 [\*\*\*]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 [\*\*\*]

EXECUTED IN DUPLICATE as of the day and year first written above and below.

---

| | |
|:---|:---|
| THE BOEING COMPANY | THE BOEING COMPANY |
| By | |
| Its | Attorney-In-Fact |
| ACCEPTED AND AGREED TO this | ACCEPTED AND AGREED TO this |
| Date: | Date: |
| ALASKA AIRLINES, INC. | ALASKA AIRLINES, INC. |
| By | |
| Its | SVP Fleet, Revenue Products and Real Estate |

---

**BOEING PROPRIETARY**<br>

P.A. 3866

ASA

## Exhibit 10.2

**CERTAIN CONFIDENTIAL PORTIONS HAVE BEEN REDACTED FROM THIS EXHIBIT BECAUSE THEY ARE BOTH (i) NOT MATERIAL AND (ii) IS THE TYPE THAT THE COMPANY TREATS AS PRIVATE OR CONFIDENTIAL. INFORMATION THAT HAS BEEN OMITTED HAD BEEN IDENTIFIED IN THIS DOCUMENT WITH A PLACEHOLDER IDENTIFIED BY THE MARK "[\*\*\*]".**

Supplemental Agreement No. 7 ("SA-7") To

Purchase Agreement No. PA- 04749 Between

The Boeing Company

And

Hawaiian Airlines, Inc.

Relating to Boeing Model 787 Aircraft

THIS SUPPLEMENTAL AGREEMENT NO. 7 (**SA-7**), entered into as of

May <u>20</u>, 2024, is by and between THE BOEING COMPANY (**Boeing**) and HAWAIIAN AIRLINES, INC. (**Customer**);

WHEREAS, Boeing and Customer entered into Purchase Agreement No. PA-04749 dated July 18, 2018, (as amended, supplemented or modified from time to time prior to the date hereof, the ***Purchase Agreement***) relating to Boeing Model 787 aircraft (***Aircraft***); and

WHEREAS, Boeing and Customer agree to incorporate into the Purchase Agreement an amendment to the [\*\*\*];

NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties agree to amend the Purchase Agreement as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**<u>**Table of Contents**</u>**

The attached "**Table of Contents**" of the Purchase Agreement deletes and replaces its antecedent "**Table of Contents**" to reflect the changes made by this SA-7.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.Table 1 (Aircraft Information Table).

&nbsp;&nbsp;&nbsp;&nbsp;The attached Table 1 to Purchase Agreement No. PA-04749 (denoted with an "SA-7") deletes and replaces its antecedent "Table 1 to Purchase Agreement No. PA-04749" to reflect [\*\*\*].

**BOEING PROPRIETARY**<br>

P.A. 04749

HA

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.**3. &nbsp;&nbsp;&nbsp;&nbsp;**<u>Effect on Purchase Agreement.</u>**

Except as expressly set forth herein, all terms and provisions contained in the Purchase Agreement shall remain in full force and effect. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and supersedes all previous proposals, and agreements, understandings, commitments or representations whatsoever, oral or written, and may be changed only in writing signed by authorized representatives of the parties.

The Purchase Agreement will be deemed to be supplemented to the extent herein provided as of the date hereof and as so supplemented will continue in full force and effect.

AGREED AND ACCEPTED on the day and year written above.

---

| | |
|:---|:---|
| THE BOEING COMPANY | THE BOEING COMPANY |
| By | |
| Its | Attorney-In-Fact |
| ACCEPTED AND AGREED TO this | ACCEPTED AND AGREED TO this |
| Date: | Date: |
| HAWAIIAN AIRLINES, INC. | HAWAIIAN AIRLINES, INC. |
| By | |
| Its | SVP Fleet, Revenue Products and Real Estate |

---

**BOEING PROPRIETARY**<br>

P.A. 04749

HA

## Exhibit 10.3

**CERTAIN CONFIDENTIAL PORTIONS HAVE BEEN REDACTED FROM THIS EXHIBIT BECAUSE THEY ARE BOTH (i) NOT MATERIAL AND (ii) IS THE TYPE THAT THE COMPANY TREATS AS PRIVATE OR CONFIDENTIAL. INFORMATION THAT HAS BEEN OMITTED HAD BEEN IDENTIFIED IN THIS DOCUMENT WITH A PLACEHOLDER IDENTIFIED BY THE MARK "[\*\*\*]".**

Supplemental Agreement No. 8 ("SA-8") To

Purchase Agreement No. PA- 04749 Between

The Boeing Company

And

Hawaiian Airlines, Inc.

Relating to Boeing Model 787 Aircraft

THIS SUPPLEMENTAL AGREEMENT NO. 8 (**SA-8**), entered into as of

April <u>11</u>, 2025, is by and between THE BOEING COMPANY (**Boeing**) and HAWAIIAN AIRLINES, INC. (**Customer**);

WHEREAS, Boeing and Customer entered into Purchase Agreement No. PA-04749 dated July 18, 2018, (as amended, supplemented or modified from time to time prior to the date hereof, the ***Purchase Agreement***) relating to Boeing Model 787 aircraft (***Aircraft***); and

WHEREAS, Boeing and Customer agree to add to the Purchase Agreement [\*\*\*] for Boeing model 787-9 aircraft;

NOW THEREFORE, in consideration of the mutual covenants herein contained, the parties agree to amend the Purchase Agreement as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**<u>**Table of Contents**</u>**

The attached "**Table of Contents**" of the Purchase Agreement deletes and replaces its antecedent "**Table of Contents**" to reflect the changes made by this SA-8.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**<u>Letter Agreements.</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 Letter Agreement No. [\*\*\*] titled [\*\*\*] attached hereto, is hereby added and incorporated into the Purchase Agreement which reflects [\*\*\*] for Boeing model 787-9 aircraft.

**BOEING PROPRIETARY**<br>

P.A. 04749

HA

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 Letter Agreement No. [\*\*\*] titled [\*\*\*] is hereby deleted in its entirety and replaced with a revised Letter Agreement No. [\*\*\*], attached hereto, which reflects additional terms related to [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 Letter Agreement No. [\*\*\*] titled [\*\*\*] is hereby deleted in its entirety and replaced with revised Letter Agreement No. [\*\*\*], attached hereto, which reflects [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5 Letter Agreement No. [\*\*\*] titled [\*\*\*] is hereby deleted in its entirety and replaced with a revised Letter Agreement No. [\*\*\*], attached hereto, which reflects additional factors related to [\*\*\*].

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.**3. &nbsp;&nbsp;&nbsp;&nbsp;**<u>Effect on Purchase Agreement.</u>**

Except as expressly set forth herein, all terms and provisions contained in the Purchase Agreement shall remain in full force and effect. This SA-8 contains the entire agreement between the parties with respect to Boeing model 787-9 aircraft and supersedes all previous proposals, and agreements, understandings, commitments or representations whatsoever, oral or written, and may be changed only in writing signed by authorized representatives of the parties.

The Purchase Agreement will be deemed to be supplemented to the extent herein provided as of the date hereof and as so supplemented will continue in full force and effect.

AGREED AND ACCEPTED on the day and year written above.

---

| | |
|:---|:---|
| THE BOEING COMPANY | THE BOEING COMPANY |
| By | |
| Its | Attorney-In-Fact |
| ACCEPTED AND AGREED TO this | ACCEPTED AND AGREED TO this |
| Date: | Date: |
| HAWAIIAN AIRLINES, INC. | HAWAIIAN AIRLINES, INC. |
| By | |
| Its | SVP Fleet, Revenue Products and Real Estate |

---

**BOEING PROPRIETARY**<br>

P.A. 04749

HA

## Exhibit 10.4

**ALASKA AIR GROUP PERFORMANCE BASED PAY PLAN**

**(Amended and Restated May 8, 2025)**

The Board of Directors (the "Board") of Alaska Air Group, Inc. (the "Company") has adopted the Performance Based Pay Plan (the "Plan") to reward eligible employees of its wholly-owned airline subsidiaries (each, a "Subsidiary"). The Board has delegated authority to the Compensation and Leadership Development Committee (the "Committee") to administer the Plan. The Performance Based Pay Award ("Award") of each eligible Plan Participant will depend upon the degree to which the Company and the Subsidiaries achieve the applicable performance goals and, if applicable, an award modifier, set by the Committee for each calendar year (a "Plan Year") and upon the discretion of the Committee as explained below.

This Amended and Restated Plan is effective beginning with the 2025 Plan Year and each year thereafter until amended, restated or terminated, pursuant to Paragraph 8. For the terms of Awards granted for any earlier Plan Year, refer to the version of the Plan in effect for the applicable Plan Year.

**1.&nbsp;&nbsp;&nbsp;&nbsp;ELIGIBILITY**

Eligibility to participate in the Plan during a Plan Year is limited to all regular, temporary variable time and temporary pool U.S. and Canadian employees, and Mexico management employees, of the Subsidiaries ("Eligible Employees") who:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) &nbsp;&nbsp;&nbsp;&nbsp;are employed by a Subsidiary on December 31 of the Plan Year for which the Award is being paid, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;were employed by a Subsidiary for less than the full Plan Year because their employment before December 31 of the Plan Year due to retirement, disability or death.

For the sake of clarity, "Eligible Employees" shall not include temporary employees (other than variable time and temporary pool employees) or Mexico non-management employees of the Subsidiaries, or any employees of McGee Air Services, Inc.

Employees who are on temporary medical leave, military leave, furlough, or company-approved leave of absence as of December 31 of the Plan Year are Eligible Employees under the Plan.

Unless otherwise provided in a separate agreement, an individual whose employment with a Subsidiary ends prior to December 31 of the Plan Year for any reason not set forth above, for example, resignation or termination (with or without cause), is ineligible for any Award under this Plan. In addition, an employee whose employment is terminated for cause (including employees who would have been terminated for cause had they not resigned before the employer's investigation into potentially terminable misconduct concluded), as determined by such employee's Subsidiary, shall forfeit any Award under this Plan, regardless of employment status on the last day of the Plan Year.

Notwithstanding the foregoing, contract employees or independent contractors as classified by a Subsidiary, shall not be Eligible Employees, regardless of whether an agency or court subsequently re-classifies such individuals as employees of a Subsidiary.

An Eligible Employee who meets all the requirements for an Award is a "Plan Participant" for such Plan Year. Participation in the Plan does not guarantee that any Award will be paid if applicable performance goals specified for the Plan Year are not achieved for the year.

**2.&nbsp;&nbsp;&nbsp;&nbsp;CALCULATION OF THE AWARD**

The size of the Award earned for a Plan Year will depend upon the extent to which the performance goals and, if applicable, an award modifier has been achieved during that Plan Year, and upon the discretion of the Committee. Separate performance weighting has been established for each performance goal.

&nbsp;&nbsp;&nbsp;&nbsp;A Plan Participant's Award is determined by the following formula: Eligible Earnings X Participation Rate X Payout Award Percentage.

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&nbsp;&nbsp;&nbsp;&nbsp;"Eligible Earnings" means the aggregate wages or salary paid during the Plan Year to the Plan Participant for services performed for a Subsidiary, ***including*** cash received for vacation payouts in connection with the Plan Participant's transfer of employment from one Subsidiary to another, or in connection with the employee's retirement, death or disability; amounts that the Plan Participant could have received in cash had the Plan Participant not elected to contribute the amount to an employee benefit plan maintained by the Company or a Subsidiary, and any other voluntary payment the Plan Participant made which reduced his/her cash compensation (such as the Plan Participant's voluntary contribution to an Internal Revenue Code ("Code") Section 401(k) Plan, Code Section 125 medical account, dependent day care spending account, or charitable gift), but ***excluding*** commissions, back-pay awards, bonuses (including any payment received under this Plan), and all other forms of incentive or other supplemental pay, employee benefits paid by the employer (such as employer contributions to a Code Section 401(k) Plan), worker's compensation payments, disability payments, cash and non-cash fringe benefits and perquisites (such as per diems, auto expense reimbursement, relocation reimbursement or travel reimbursement).

&nbsp;&nbsp;&nbsp;&nbsp;"Participation Rate" shall mean the percentage value or range communicated to each Eligible Employee or class of Eligible Employee.

&nbsp;&nbsp;&nbsp;&nbsp;"Payout Award Percentage" means the sum of the weighted payout of each performance goal, calculated in the manner specified by Paragraph 3, herein. Awards shall be paid in cash only.

All calculations will be performed by the Company's internal auditors and will be subject to approval by the Committee. Once approved by the Committee, such calculations shall be conclusively presumed to be accurate.

**3.&nbsp;&nbsp;&nbsp;&nbsp;PERFORMANCE WEIGHTING**

In order for any Award to be payable as to a particular performance goal, a "Threshold" performance level for that goal must be achieved. The payout percentage for a particular performance goal will be 50% if the "Threshold" level is reached, 100% if the "Target" level is reached, and 200% if the "Maximum" level is achieved. This determination applies to each goal individually. If performance for a particular goal is between the Threshold and Target levels, or between the Target and Maximum levels, the payout percentage for that goal will be determined by linear interpolation between those two levels. The payout percentage for each goal as so determined will then be multiplied by the weighting factor for that goal, as specified in Annex 1 Performance-Based Pay Plan Goals and Measures described in Paragraph 4 for the applicable Plan Year (the "weighted payout percentages").

**4.&nbsp;&nbsp;&nbsp;&nbsp;PERFORMANCE GOALS AND APPLICABLE PERFORMANCE WEIGHTING FACTORS**

The Committee will establish the performance goals and, if applicable, an award modifier for each Plan Year during the life of this Plan, and will annually approve an Annex 1 Performance-Based Pay Plan Goals and Measures to this Plan that outlines the performance goals, award modifiers and the weighting factors and an Annex 2 Performance-Based Pay Plan Participation Rates.

**5.&nbsp;&nbsp;&nbsp;&nbsp;DISCRETIONARY FACTOR**

In the case of a Plan Participant described in Paragraph 1 who retired, separated from employment due to disability, or died during the year, or a Plan Participant who took a leave of absence or worked a reduced schedule during any portion of the year, the Committee retains absolute discretionary authority to adjust the Award to such Plan Participant based upon the Committee's determination of such Plan Participant's contribution to the Company, or any other factors as the Committee may determine appropriate. The Committee also retains discretion based upon any factors the Committee deems appropriate to confirm a specific Participation Rate when approving the Award to a Plan Participant whose Participation Rate falls within a range set forth in Annex 2. Further, the Committee may set different Participation Rates within the specified range for different Plan Participants within the same class of Eligible Employees and may adjust the Participation Rate within the specified range for any Plan Participant from one Plan Year to the next.

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**6.&nbsp;&nbsp;&nbsp;&nbsp;TIMING OF AWARDS**

Payment of Awards for a Plan Year will be made no later than March 15 of the following year. A deceased Plan Participant's Award will be paid to the Participant's estate.

**7.&nbsp;&nbsp;&nbsp;&nbsp;PLAN PARTICIPANT TRANSFERS** 

If a Plan Participant transfers employment between Subsidiaries during the Plan Year, the Plan Participant's Award under this Plan, and any payment in respect of such Award, shall be separately determined by the Committee based on Eligible Earnings, Participation Rate and Payout Award Percentage attributable to the employment period at each Subsidiary. This will result in a separate Award based on service and performance while employed at one Subsidiary, and a separate Award based on service and performance while employed at another Subsidiary, as applicable.

**8.&nbsp;&nbsp;&nbsp;&nbsp;AMENDMENT**

The Board, acting on its own or through the Committee, retains the right to modify the Plan at any time in any manner that it deems appropriate, provided that (a) no amendment that adversely affects the rights of Plan Participants or their beneficiaries shall be effective for a Plan Year that ended prior to the Plan Year in which the amendment was adopted, and (b) it will not terminate the Plan for any Plan Year during that Plan Year unless it is clear that Plan Participants will not receive any payment with respect to Awards granted for that Plan Year.

**9.&nbsp;&nbsp;&nbsp;&nbsp;CLAWBACK POLICY**.

The Award is subject to the terms of the Company's recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require forfeiture of the Award and repayment or forfeiture of any cash received with respect to the Award.

**10.&nbsp;&nbsp;&nbsp;&nbsp;MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a.&nbsp;&nbsp;&nbsp;&nbsp;This Plan, including its attachments, constitutes the entire understanding relating to any Award that may be earned by employees of the Subsidiaries, and supersedes all prior oral or written agreements, representations or commitments relating to such Awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b.&nbsp;&nbsp;&nbsp;&nbsp;This Plan is not a commitment of the Company or any Subsidiary to any officer or employee of such company to continue that individual in its employ in order to qualify for an Award. Nothing contained in this Plan may be considered to be a promise of continued employment. Any employee who files suit against his or her employer for wrongful termination shall automatically cease to be an Eligible Employee under the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c.&nbsp;&nbsp;&nbsp;&nbsp;This Plan and the rights and obligations provided for herein shall be construed and interpreted in accordance with the law of the state of Washington, excluding its conflicts of law rules.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d.&nbsp;&nbsp;&nbsp;&nbsp;No unpaid Award will be subject to the debts, liabilities, contracts or engagements of any Plan Participant, and may not be alienated, pledged, garnished or sold, and any attempt to do so shall be void.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;e.&nbsp;&nbsp;&nbsp;&nbsp;All Awards are subject to applicable federal, state, and local deductions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;f.&nbsp;&nbsp;&nbsp;&nbsp;This Plan is intended to be an exception to, or otherwise be in compliance with, Section 409A of the Internal Revenue Code of 1986, as amended. This Plan shall be interpreted to comply with Section 409A.

## Exhibit 10.5

**ALASKA AIR GROUP** 

**OPERATIONAL PERFORMANCE REWARDS PLAN**

**Adopted January 3, 2005; Amended May 8, 2025 (Effective January 1, 2025)**

The Board of Directors of Alaska Air Group, Inc. (the "Company") has adopted the Operational Performance Rewards Plan (the "Plan") to reward eligible employees of the Company's wholly-owned airline subsidiaries (each a "Subsidiary") for achieving certain operational performance targets. This description is provided to explain the key elements of how the Plan will operate. This Plan is effective beginning with the 2025 Plan year and each year thereafter until amended or terminated as provided herein.

**1.&nbsp;&nbsp;&nbsp;&nbsp;ELIGIBILITY**

All regular employees, temporary variable-time and temporary pool employees of the Subsidiaries (including employees outside of the United States, if permitted by applicable law and labor contracts) are eligible to participate in the Plan (and referred to herein as "Eligible Employees") and will receive one or more payments under the Plan if they meet the criteria in this paragraph. Payments under the Plan ("Awards") are earned monthly and paid quarterly. Eligible Employees on active status or on an approved leave of absence as of the close of business on the last day of the quarter during which (a) any of the monthly operational targets applicable to such employee's Subsidiary are met and (b) employee had eligible earnings as defined in the Company's Performance Based Pay Plan during the quarter.

Unless otherwise provided in a separate agreement, an individual whose employment with a Subsidiary ends prior to the last day of the quarter for any reason not set forth above, for example, resignation or termination (with or without cause), is ineligible for any Award under this Plan. In addition, an employee whose employment is terminated for cause (including employees who would have been terminated for cause had they not resigned before the employer's investigation into potentially terminable misconduct concluded), as determined by such employee's Subsidiary, shall forfeit any Award under this Plan, regardless of employment status on the last day of the quarter. Notwithstanding the foregoing, contract employees or independent contractors as classified by the applicable Subsidiary shall be excluded from participation hereunder, regardless of whether an agency or court subsequently re-classifies such individuals as the Subsidiary's employee. An Eligible Employee who meets all the requirements for an Award is a "Plan Participant." Participation in the Plan does not guarantee that any Award will be paid if applicable operational targets are not achieved.

**2.&nbsp;&nbsp;&nbsp;&nbsp;ACCRUAL OF AWARDS**

An Award will accrue for each Participant as of the close of business of the last day of any quarter in which the applicable Subsidiary has achieved one or more of the

&nbsp;&nbsp;&nbsp;&nbsp;1

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performance goals set forth in <u>Exhibit A</u>. Each Subsidiary does not need to achieve all of the performance goals in a given quarter to accrue an Award; each goal reached in a given Target Period (as defined in <u>Exhibit A</u>) will apply separately towards the Award to that Subsidiary's Participants for that quarter.

**3.&nbsp;&nbsp;&nbsp;&nbsp;PAYMENT OF AWARDS**

Accrued Awards will be paid quarterly. The Company will use reasonable efforts to pay accrued Awards to Participants within sixty (60) days after the end of each calendar quarter. The Company may pay Awards through regular payroll or by separate check in the Company's discretion, and in either case the Company may withhold applicable taxes and garnishments from such payments. The Company will pay a deceased Participant's Award to the Participant's estate.

**4.&nbsp;&nbsp;&nbsp;&nbsp;ESTABLISHMENT OF PERFORMANCE GOALS** 

The Compensation and Leadership Development Committee of the Board (the "Compensation Committee") will establish the periodic performance goals for each Plan year during the life of this Plan and will provide an exhibit to this Plan that outlines goals and the payout amounts for each goal. Each such attachment will be labeled "Exhibit A: Operational Performance Rewards Plan Goals and Award Levels for [year]" and communicated to Eligible Employees.

**5.&nbsp;&nbsp;&nbsp;&nbsp;AMENDMENT; TERMINATION; INTERPETATION**

The Board, acting through the Compensation and Leadership Development Committee, retains the right at any time to modify the Plan in any manner that it deems appropriate or to terminate the Plan, provided that no amendment or termination shall be effective sooner than the first day of the month following the Committee's action on such amendment or termination. No termination of the Plan shall affect Awards accrued before the effective date of termination. Management may interpret or amend this Plan Description with respect to administrative issues that do not affect benefit amounts and are not otherwise material to the overall benefits provided by the Plan. The Committee shall have discretion to interpret and resolve any material issue or dispute under the Plan, and its decision concerning any aspect of the operation of the Plan will be final and conclusive. The Committee will review the Plan annually and may make changes to the Plan and/or <u>Exhibit A</u> for the next Plan year.

&nbsp;&nbsp;&nbsp;&nbsp;2

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**6.&nbsp;&nbsp;&nbsp;&nbsp;CLAWBACK POLICY**

Awards are subject to the terms of the Company's recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require forfeiture of the Awards and repayment or forfeiture of any cash received with respect to the Awards.

**7.&nbsp;&nbsp;&nbsp;&nbsp;MISCELLANEOUS**

This description, including its attachments, constitutes the entire understanding relating to the Plan, and supersedes all prior oral or written agreements, representations or commitments relating to the Plan or any Award. This Plan is not a commitment of the Company or any Subsidiary to any officer or employee to continue that individual in its employ for any reason. Any employee who files suit against his or her employing Subsidiary for wrongful termination shall automatically cease to be a Participant. This description and the rights and obligations provided for herein shall be construed and interpreted in accordance with the law of the state of Washington, excluding its conflicts of law rules.

&nbsp;&nbsp;&nbsp;&nbsp;3

## Exhibit 10.6

**EXHIBIT B**

**ALASKA AIR GROUP, INC. EMPLOYEE STOCK PURCHASE PLAN**

(As amended by the Board on May 8, 2025

for Offering Periods commencing on or after November 1, 2025)

**1. PURPOSE**

The purpose of this Plan is to assist Eligible Employees in acquiring a stock ownership interest in the Company, at a favorable price and upon favorable terms, pursuant to a plan which is intended to qualify as an "employee stock purchase plan" under Section 423 of the Code. This Plan is also intended to encourage Eligible Employees to remain in the employ of the Company or a Participating Subsidiary and to provide them with an additional incentive to advance the best interests of the Company.

**2. DEFINITIONS**

Capitalized terms used herein which are not otherwise defined shall have the following meanings.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)"**Account**" means the bookkeeping account maintained by the Company, or by a record keeper on behalf of the Company, for a Participant pursuant to Section 7(a).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)"**Board**" means the Board of Directors of the Company, as defined below.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)"**Code**" means the U.S. Internal Revenue Code of 1986, as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)"**Commission**" means the U.S. Securities and Exchange Commission.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)"**Committee**" means the committee appointed by the Board to administer the Plan pursuant to Section 12.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)"**Common Stock**" means the common stock, par value $0.01 per share, of the Company, and such other securities or property as may become the subject of Options pursuant to an adjustment made under Section 17.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)"**Company**" means Alaska Air Group, Inc., a Delaware corporation, and its successors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)"**Compensation**" means an Eligible Employee's base pay, inclusive of overtime and any employer paid leave. Compensation also includes any amounts contributed as salary reduction contributions to a plan qualifying under Section 401(k), 125, or 129 of the Code. Any other form of remuneration is excluded from Compensation, including (but not limited to) the following: cash bonuses, severance pay, hiring bonuses, prizes, awards, relocation or housing allowances, stock option exercises, stock appreciation right payments, the vesting or grant of restricted stock,

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the payment of stock units, performance awards, auto allowances, tuition reimbursement, perquisites, non-cash compensation and other forms of imputed income. Notwithstanding the foregoing, Compensation shall not include any amounts deferred under or paid from any nonqualified deferred compensation plan maintained by the Company or any Subsidiary (including, without limitation, the Company's Nonqualified Deferred Compensation Plan).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)"**Contributions**" means the bookkeeping amounts credited to the Account of the Participant pursuant to this Plan, equal in amount to the amount of Compensation that the Participant has elected to contribute for the purchase of Common Stock under and in accordance with this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)"**Effective Date**" means March 11, 2010, the date on which this Plan was initially adopted by the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) "**Eligible Employee**" means, subject to Section 3, any person employed by the Company or any Subsidiary which has been designated in writing by the Committee as a "Participating Subsidiary"; provided, however, that "Eligible Employee" shall not include any employee

whose customary employment is for less than five (5) months in a calendar year.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)"**Exchange Act**" means the U.S. Securities Exchange Act of 1934, as amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)"**Exercise Date**" means, with respect to an Offering Period, the last day of that Offering Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)"**Fair Market Value**" on any date means:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)if the Common Stock is listed or admitted to trade on a national securities exchange, the closing price of a share of Common Stock on such date on the principal national securities exchange on which the Common Stock is so listed or admitted to trade, or, if there is no trading of the Common Stock on such date, then the closing price of a share of Common Stock on such exchange on the next preceding date on which there was trading in the shares of Common Stock; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)in the absence of exchange data required to determine Fair Market Value pursuant to the foregoing, the value as established by the Committee as of the relevant time for purposes of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)"**Grant Date**" means, with respect to an Offering Period, the first day of that Offering Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)"**Individual Limit**" has the meaning given to such term in Section 4(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)"**Offering Period**" means the six (6) month period commencing on each Grant Date; provided, however, the Committee may declare, as it deems

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appropriate and in advance of the applicable Offering Period, a shorter (not to be less than three months) Offering Period or a longer (not to exceed 27 months) Offering Period. Unless otherwise expressly provided by the Committee in advance of a particular Offering Period, the Grant Date for that Offering Period may not occur on or before the Exercise Date for the immediately preceding Offering Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)"**Option**" means the option to acquire shares of Common Stock granted to a Participant pursuant to Section 8.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)"**Option Price**" means the per share exercise price of an Option as determined in accordance with Section 8(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)"**Parent**" means any corporation (other than the Company) in an unbroken chain of corporations ending with the Company in which each corporation (other than the Company) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one or more of the other corporations in the chain.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)"**Participant**" means an Eligible Employee who has elected to participate in this Plan and who has filed a valid and effective Subscription Agreement to make Contributions pursuant to Section 6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)"**Participating Subsidiary**" shall have the meaning given to such term in Section 19(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t)"**Plan**" means this Alaska Air Group, Inc. Employee Stock Purchase Plan, as it may be amended or restated from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u)"**Subscription Agreement**" means the written agreement or applicable electronic form of agreement filed by an Eligible Employee with the Company pursuant to Section 6 to participate in this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)"**Subsidiary**" means any corporation (other than the Company) in an unbroken chain of corporations (beginning with the Company) in which each corporation (other than the last corporation) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one or more of the other corporations in the chain.

**3. ELIGIBILITY**

Any person employed as an Eligible Employee as of a Grant Date may participate in this Plan during the Offering Period in which such Grant Date occurs, subject to the Eligible Employee satisfying the requirements of Section 6; provided, however, that the Committee may impose a requirement, prior to the start of an Offering Period, that an individual be employed with the Company or a Participating Subsidiary for a specified period of time (which shall be less than two years) prior to the applicable Grant Date to be eligible to participate in that Offering Period.

**4. STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS**

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)***Aggregate Share Limit***. Subject to the provisions of Section 17, the capital stock that may be delivered under this Plan will be shares of the Company's authorized but unissued Common Stock. The maximum number of shares of Common Stock that may be delivered pursuant to Options granted under this Plan is [_________] shares, subject to adjustments pursuant to Section 17.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)***Individual Share Limit***. The maximum number of shares of Common Stock that any one individual may acquire upon exercise of his or her Option with respect to any one Offering Period is 8,000, subject to adjustments pursuant to Section 17 (the "**Individual Limit**"). The Committee may amend the Individual Limit, effective no earlier than the first Offering Period commencing after the adoption of such amendment, without stockholder approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)***Shares Not Actually Delivered***. Shares that are subject to or underlie Options, which for any reason are cancelled, terminated, forfeited, fail to vest, or for any other reason are not paid or delivered under this Plan shall again, except to the extent prohibited by law, be available for subsequent Options under this Plan.

**5. OFFERING PERIODS**

During the term of this Plan, the Company will grant Options to purchase shares of Common Stock in each Offering Period to all Participants in that Offering Period. Unless otherwise specified by the Committee in advance of the Offering Period, Offering Periods will be of approximately six (6) months duration and will commence on November 1 and May 1 each year and will end on the following April 30 and October 31, respectively; provided that there will be an Offering Period of approximately eight (8) months commencing on September 1, 2019 and ending on April 30, 2020. Each Option shall become effective on the Grant Date of the Offering Period with respect to which the Option is granted. The term of each Option shall be the duration of the related Offering Period and shall end on the Exercise Date of that Offering Period. The first Offering Period shall commence as of a date determined by the Board or Committee, but no earlier than the Effective Date. Offering Periods shall continue until this Plan is terminated in accordance with Section 18 or 19, or, if earlier, until no shares of Common Stock remain available for Options pursuant to Section 4.

**6. PARTICIPATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)***Enrollment***. An Eligible Employee may become a Participant in this Plan by completing a Subscription Agreement on a form approved by and in a manner prescribed by the Committee (or its delegate). To become effective, a Subscription Agreement must be signed by the Eligible Employee and be filed with the Company at the time specified by the Committee, but in all cases prior to the start of the Offering Period with

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respect to which it is to become effective, and must set forth a whole percentage (or, if the Committee so requires, a stated amount) of the Eligible Employee's Compensation to be credited to the Participant's Account as Contributions each pay period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)***Contribution Limits***. Notwithstanding the foregoing, a Participant may not elect to contribute less than one percent (1%) nor more than ten percent (10%) (or such other limit as the Committee may establish prior to the start of the applicable Offering Period) of his or her Compensation during any one pay period as Plan Contributions. The Committee also may prescribe other limits, rules or procedures for Contributions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)***Content and Duration of Subscription Agreements***.&nbsp;&nbsp;&nbsp;&nbsp; Subscription Agreements shall contain the Eligible Employee's authorization and consent to the Company's withholding from his or her Compensation the amount of his or her Contributions. An Eligible Employee's Subscription Agreement, and his or her participation election and withholding consent thereon, shall remain valid for all Offering Periods until (1) the Eligible Employee's participation terminates pursuant to the terms hereof, (2) the Eligible Employee files a new Subscription Agreement that becomes effective, or (3) the Committee requires that a new Subscription Agreement be executed and filed with the Company.

**7. METHOD OF PAYMENT OF CONTRIBUTIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)***Participation Accounts***. The Company shall maintain on its books, or cause to be maintained by a record keeper, an Account in the name of each Participant. The percentage of Compensation elected to be applied as Contributions by a Participant shall be deducted from such Participant's Compensation on each payday during the period for payroll deductions set forth below and such payroll deductions shall be credited to that Participant's Account as soon as administratively practicable after such date. A Participant may not make any additional payments to his or her Account. A Participant's Account shall be reduced by any amounts used to pay the Option Price of shares acquired, or by any other amounts distributed pursuant to the terms hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)***Payroll Deductions***. Subject to such other rules as the Committee may adopt, payroll deductions with respect to an Offering Period shall commence as of the first day of the payroll period which coincides with or immediately follows the applicable Grant Date and shall end on the last date of the payroll period which coincides with or immediately precedes the applicable Exercise Date, unless sooner terminated by the Participant as provided in Section 7(d) or until his or her participation terminates pursuant to Section 11.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)***Changes in Contribution Elections for Next Offering Period; One-Time Reduction Permitted During an Offering Period***. A Participant may

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discontinue, increase, or decrease the level of his or her Contributions (within the Plan limits) by completing and filing with the Company, on such terms as the Committee (or its delegate) may prescribe, a new Subscription Agreement which indicates such election. Subject to any other timing requirements that the Committee may impose, an election pursuant to this Section 7(c) shall be effective with the first Offering Period that commences after the Company's receipt of such election , provided that a Participant may, on one occasion only during an Offering Period, elect to decrease (but not increase) the level of his or her Contributions (subject to Section 6(b)) by filing a new Subscription Agreement with the Company indicating such election, which election shall be effective as soon as administratively practicable following its receipt by the Company. Except as contemplated by the foregoing proviso and Section 7(d) and 7(e), changes in Contribution levels may not take effect during an Offering Period. Other modifications or suspensions of Subscription Agreements are not permitted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)***Withdrawal During an Offering Period***. A Participant may terminate his or her Contributions during an Offering Period (and receive a distribution of the balance of his or her Account in accordance with Section 11) by completing and filing with the Company, in such form and on such terms as the Committee (or its delegate) may prescribe, a written withdrawal form or applicable electronic withdrawal form which shall be signed by the Participant. Such termination shall be effective as soon as administratively practicable after its receipt by the Company. A withdrawal election pursuant to this Section 7(d) with respect to an Offering Period shall only be effective, however, if it is received by the Company prior to the Exercise Date of the Offering Period (or such earlier deadline that the Committee may reasonably require to process the withdrawal prior to the applicable Exercise Date). Partial withdrawals of Accounts are not permitted.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)***Discontinuance of Contributions During an Offering Period***. A Participant may discontinue his or her Contributions at any time during an Offering Period by completing and filing with the Company, on such terms as the Committee (or its delegate) may prescribe, a new Subscription Agreement which indicates such election. If a Participant elects to discontinue his or her Contributions pursuant to this Section 7(e), the Contributions previously credited to the Participant's Account for that Offering Period shall be used to exercise the Participant's Option as of the applicable Exercise Date in accordance with Section 9 (unless the Participant makes a timely withdrawal election in accordance with Section 7(d), in which case such Participant's Account shall be paid to him or her in cash in accordance with Section 11(a)).

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**8. GRANT OF OPTION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)***Grant Date; Number of Shares*.** On each Grant Date, each Eligible Employee who is a Participant during that Offering Period shall be granted an Option to purchase a number of shares of Common Stock. The Option shall be exercised on the Exercise Date. The number of shares of Common Stock subject to the Option shall be determined by dividing the Participant's Account balance as of the applicable Exercise Date by the Option Price, subject to the limits of Section 8(c).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)***Option Price.*** The Option Price per share of the shares subject to an Option for an Offering Period shall be the <u>lesser</u> of: (i) 85% of the Fair Market Value of a Share on the Grant Date of that Offering Period; or (ii) 85% of the Fair Market Value of a Share on the Exercise Date of that Offering Period; provided, however, that the Committee may provide prior to the start of any Offering Period that the Option Price for that Offering Period shall be determined by applying a discount amount (not to exceed 15%) to either (1) the Fair Market Value of a share of Common Stock on that Grant Date of that Offering Period, or (2) the Fair Market Value of a share of Common Stock on the Exercise Date of that Offering Period, or (3) the lesser of the Fair Market Value of a share of Common Stock on the Grant Date of that Offering Period or the Fair Market Value of a share of Common Stock on the Exercise Date of that Offering Period. Notwithstanding anything to the contrary in the preceding provisions of this Section 8(b), in no event shall the Option Price per share be less than the par value of a share of Common Stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)***Limits on Share Purchases.*** Notwithstanding anything else contained herein, the maximum number of shares subject to an Option for an Offering Period shall be subject to the Individual Limit in effect on the Grant Date of that Offering Period (subject to adjustment pursuant to Section 17) and any person who is otherwise an Eligible Employee shall not be granted any Option (or any Option granted shall be subject to compliance with the following limitations) or other right to purchase shares under this Plan to the extent:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)it would, if exercised, cause the person to own stock (within the meaning of Section 423(b)(3) of the Code) possessing 5% or more of the total combined voting power or value of all classes of stock of the Company, or of any Parent, or of any Subsidiary; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)such Option causes such individual to have rights to purchase stock under this Plan and any other plan of the Company, any Parent, or any Subsidiary which is qualified under Section 423 of the Code which accrue at a rate which exceeds $25,000 of the Fair Market Value of the stock of the Company, of any Parent, or of any Subsidiary (determined at the time the right to purchase such stock is granted, before giving effect to any discounted purchase

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price under any such plan) for each calendar year in which such right is outstanding at any time.

For purposes of the foregoing, a right to purchase stock accrues when it first becomes exercisable during the calendar year. In determining whether the stock ownership of an Eligible Employee equals or exceeds the 5% limit set forth above, the rules of Section 424(d) of the Code (relating to attribution of stock ownership) shall apply, and stock which the Eligible Employee may purchase under outstanding options shall be treated as stock owned by the Eligible Employee.

**9. EXERCISE OF OPTION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)***Purchase of Shares***. Unless a Participant withdraws pursuant to Section 7(d) or the Participant's Plan participation is terminated as provided in Section 11, his or her Option for the purchase of shares shall be exercised automatically on the Exercise Date for that Offering Period, without any further action on the Participant's part, and the maximum number of whole shares of Common Stock subject to such Option (subject to the limits of Section 8(c)) shall be purchased at the Option Price with the balance of such Participant's Account.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)***Account Balance Remaining After Purchase***. If any amount which is not sufficient to purchase a whole share remains in a Participant's Account after the exercise of his or her Option on the Exercise Date: (1) such amount shall be credited to such Participant's Account for the next Offering Period, if he or she is then a Participant; or (2) if such Participant is not a Participant in the next Offering Period, or if the Committee so elects, such amount shall be refunded to such Participant as soon as administratively practicable after such date. If the share limit of Section 4(a) is reached, any amount that remains in a Participant's Account after the exercise of his or her Option on the Exercise Date to purchase the number of shares that he or she is allocated shall be refunded to the Participant as soon as administratively practicable after such date. If any amount which exceeds the limits of Section 8(c) remains in a Participant's Account after the exercise of his or her Option on the Exercise Date, such amount shall be refunded to the Participant as soon as administratively practicable after such date.

**10. DELIVERY OF SHARES**

As soon as administratively practicable after the Exercise Date, the Company shall, provide for the crediting of the shares of Common Stock purchased upon exercise of a Participant's Option in book entry form in the name of the Participant, or provide for an alternative arrangement for the delivery of such shares to a broker or record keeping service for the benefit of the Participant. In the event the Company is required to obtain from any commission or agency

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authority to deliver such shares, the Company will seek to obtain such authority. If the Company is unable to obtain from any such commission or agency authority which counsel for the Company deems necessary for the lawful issuance of any such certificate or other delivery of such shares, or if for any reason the Company cannot issue or deliver shares of Common Stock and satisfy Section 21, the Company shall be relieved from liability to any Participant except that the Company shall return to each Participant to whom such shares cannot be issued or delivered the amount of the balanced credited to his or her Account that would have otherwise been used for the purchase of such shares. Without limiting the generality of Section 12(b)(3), if shares are delivered to a broker for the benefit of a Participant as described above, the Committee may adopt such policies and procedures as it determines appropriate regarding the Participant's ability to transfer such shares from such broker account before the expiration of two years from the Grant Date of the Offering Period for which those shares were acquired and one year from the Exercise Date of the Offering Period for which those shares were acquired (provided, that nothing in this Section 10 shall prohibit a sale of such shares by the Participant on the open market or a transfer of such shares upon the death of the Participant).

**11. TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)***General***. Except as provided in Section 11(b) below, if a Participant ceases to be an Eligible Employee for any reason (including, without limitation, due to the Participant's death, disability, resignation or retirement, or due to a layoff or other termination of employment with or without cause), or if the Participant elects to withdraw from the Plan pursuant to Section 7(d), at any time prior to the Exercise Date for the Offering Period in which he or she participates, such Participant shall not be eligible to exercise the Option for that Offering Period and Participant's Account shall be paid to him or her (or, in the event of the Participant's death, to the person or persons entitled thereto under Section 13) in cash, and such Participant's Option and participation in the Plan shall automatically terminate as of the time that the Participant ceased to be an Eligible Employee.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)***Change in Eligible Status; Leave***. If a Participant (1) ceases to be an Eligible Employee during an Offering Period but remains an employee of the Company or a Subsidiary through the Exercise Date (for example, and without limitation, due to a change in the Participant's employer from the Company or a Participating Subsidiary to a non-Participating Subsidiary, if the Participant's employer ceases to maintain the Plan as a Participating Subsidiary but otherwise continues as a Subsidiary, or if the Participant's customary level of employment no longer satisfies the requirements set forth in the definition of Eligible Employee), or (2) during an Offering Period commences a sick leave, military leave, or

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other leave of absence approved by the Company or a Participating Subsidiary, and the leave meets the requirements of Treasury Regulation Section 1.421-1(h)(2) and the Participant is an employee of the Company or a Subsidiary or on such leave as of the applicable Exercise Date, such Participant's Contributions shall cease, and the Contributions previously credited to the Participant's Account for that Offering Period shall be used to exercise the Participant's Option as of the applicable Exercise Date in accordance with Section 9 (unless the Participant makes a timely withdrawal election in accordance with Section 7(d), in which case such Participant's Account shall be paid to him or her in cash in accordance with Section 11(a)).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)***Re-Enrollment***. A Participant's termination from Plan participation precludes the Participant from again participating in this Plan during that Offering Period. However, such termination shall not have any effect upon his or her ability to participate in any succeeding Offering Period, provided that the applicable eligibility and participation requirements are again then met. A Participant's termination from Plan participation shall be deemed to be a revocation of that Participant's Subscription Agreement and such Participant must file a new Subscription Agreement to resume Plan participation in any succeeding Offering Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)***Change in Subsidiary Status.*** For purposes of this Plan, if a Subsidiary ceases to be a Subsidiary, each person employed by that Subsidiary will be deemed to have terminated employment for purposes of this Plan, unless the person continues as an employee of the Company or another Subsidiary.

**12. ADMINISTRATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)***The Committee***. The Board shall appoint the Committee, which shall be composed of not less than two members of the Board. The Board may, at any time, increase or decrease the number of members of the Committee, may remove from membership on the Committee all or any portion of its members, and may appoint such person or persons as it desires to fill any vacancy existing on the Committee, whether caused by removal, resignation, or otherwise. The Board may also, at any time, assume the administration of all or a part of this Plan, in which case references (or relevant references in the event the Board assumes the administration of only certain aspects of this Plan) to the "Committee" shall be deemed to be references to the Board. Action of the Committee with respect to this Plan shall be taken pursuant to a majority vote or by the unanimous written consent of its members. No member of the Committee shall be entitled to act on or decide any matters relating solely to himself or herself or solely to any of his or her rights or benefits under this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)***Powers and Duties of the Committee***. Subject to the express provisions of this Plan, the Committee shall supervise and administer this Plan and

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shall have the full authority and discretion: (1) to construe and interpret this Plan and any agreements defining the rights and obligations of the Company, any Subsidiary, and Participants under this Plan; (2) to further define the terms used in this Plan; (3) to prescribe, amend and rescind rules and regulations relating to the administration of this Plan (including, without limitation, deadlines for making elections or for providing any notices contemplated by this Plan, which deadlines may be more restrictive than any deadlines otherwise contemplated by this Plan); and (4) to make all other determinations and take such other action as contemplated by this Plan or as may be necessary or advisable for the administration of this Plan or the effectuation of its purposes. Notwithstanding anything else contained in this Plan to the contrary, the Committee may also adopt rules, procedures or sub-plans applicable to particular Subsidiaries or locations, which sub-plans may be designed to be outside the scope of Section 423 of the Code and need not comply with the otherwise applicable provisions of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)***Decisions of the Committee are Binding***. Any action taken by, or inaction of, the Company, any Subsidiary, the Board or the Committee relating or pursuant to this Plan and within its authority hereunder or under applicable law shall be within the absolute discretion of that entity or body and shall be conclusive and binding upon all persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)***Indemnification***. Neither the Board nor any Committee, nor any member thereof or person acting at the direction thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with this Plan, and all such persons shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including, without limitation, attorneys' fees) arising or resulting therefrom to the fullest extent permitted by law and/or under any directors and officers liability insurance coverage that may be in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)***Reliance on Experts***. In making any determination or in taking or not taking any action under this Plan, the Committee or the Board, as the case may be, may obtain and may rely upon the advice of experts, including professional advisors to the Company. No director, officer or agent of the Company or any Participating Subsidiary shall be liable for any such action or determination taken or made or omitted in good faith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)***Delegation***. The Committee may delegate ministerial, non-discretionary functions to individuals who are officers or employees of the Company or a Subsidiary.

**1. DEATH BENEFITS**

If a Participant dies, the Company shall deliver all shares and/or cash payable pursuant to the terms hereof to the executor or administrator of the estate of the

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Participant, or if no such executor or administrator has been appointed, the Company, in its discretion, may deliver such shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.

**13. TRANSFERABILITY**

Neither Contributions credited to a Participant's Account nor any Options or rights with respect to the exercise of Options or the right to receive shares under this Plan may be anticipated, alienated, encumbered, assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution, or as provided in Section 13) by the Participant. Any such attempt at anticipation, alienation, encumbrance, assignment, transfer, pledge or other disposition shall be without effect and all amounts shall be paid and all shares shall be delivered in accordance with the provisions of this Plan. Amounts payable or shares deliverable pursuant to this Plan shall be paid or delivered only to (or credited in the name of, as the case may be) the Participant or, in the event of the Participant's death, the Participant's beneficiary pursuant to Section 13.

**14. USE OF FUNDS; INTEREST**

All Contributions received or held by the Company under this Plan will be included in the general assets of the Company and may be used for any corporate purpose. Notwithstanding anything else contained herein to the contrary, no interest will be paid to any Participant or credited to his or her Account under this Plan (in respect of Account balances, refunds of Account balances, or otherwise). Amounts payable under this Plan shall be payable in shares of Common Stock or from the general assets of the Company and, except for any shares that may be reserved on the books of the Company for issuance with respect to this Plan, no special or separate reserve, fund or deposit shall be made to assure payment of amounts that may be due with respect to this Plan.

**15. REPORTS**

Statements shall be provided (either electronically or in written form, as the Committee may provide from time to time) to Participants as soon as administratively practicable following each Exercise Date. Each Participant's statement shall set forth, as of such Exercise Date, that Participant's Account balance immediately prior to the exercise of his or her Option, the Option Price, the number of whole shares purchased and his or her remaining Account balance, if any.

**16. ADJUSTMENTS OF AND CHANGES IN THE STOCK**

Upon or in contemplation of any reclassification, recapitalization, stock split (including a stock split in the form of a stock dividend), or reverse stock split; any merger, combination, consolidation, or other reorganization; split-up, spin-

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off, or any similar extraordinary dividend distribution in respect of the Common Stock (whether in the form of securities or property); any exchange of Common Stock or other securities of the Company, or any similar, unusual or extraordinary corporate transaction in respect of the Common Stock; or a sale of substantially all of the assets of the Company as an entirety occurs; then the Committee shall equitably and proportionately adjust (1) the number and type of shares or the number and type of other securities that thereafter may be made the subject of Options (including the specific maxima and numbers of shares set forth elsewhere in this Plan), (2) the number, amount and type of shares (or other securities or property) subject to any or all outstanding Options, (3) the Option Price of any or all outstanding Options, and/or (4) the securities, cash or other property deliverable upon exercise of any outstanding Options, in each case to the extent necessary to preserve (but not increase) the level of incentives intended by this Plan and the then-outstanding Options.

Upon the occurrence of any event described in the preceding paragraph, or any other event in which the Company does not survive (or does not survive as a public company in respect of its Common Stock); then the Committee may make provision for a cash payment or for the substitution or exchange of any or all outstanding Options for cash, securities or property to be delivered to the holders of any or all outstanding Options based upon the distribution or consideration payable to holders of the Common Stock upon or in respect of such event.

The Committee may adopt such valuation methodologies for outstanding Options as it deems reasonable in the event of a cash or property settlement and, without limitation on other methodologies, may base such settlement solely upon the excess (if any) of the amount payable upon or in respect of such event over the Option Price of the Option.

In any of such events, the Committee may take such action sufficiently prior to such event to the extent that the Committee deems the action necessary to permit the Participant to realize the benefits intended to be conveyed with respect to the underlying shares in the same manner as is or will be available to stockholders generally.

**17. POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS**

Upon a dissolution or liquidation of the Company, or any other event described in Section 17 that the Company does not survive or does not survive as a publicly-traded company in respect of its Common Stock, as the case may be, the Plan and, if prior to the last day of an Offering Period, any outstanding Option granted with respect to that Offering Period shall terminate, subject to any provision that has been expressly made by the Board for the survival, substitution, assumption, exchange or other settlement of the Plan and Options. In the event a Participant's Option is terminated pursuant to this Section 18 without a provision having been made by the Board for a substitution, exchange

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or other settlement of the Option, such Participant's Account shall be paid to him or her in cash without interest.

**18. TERM OF PLAN; AMENDMENT OR TERMINATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)***Effective Date; Termination***. This Plan became effective as of the Effective Date. No new Offering Periods shall commence on or after March 12, 2035 and this Plan shall terminate as of the Exercise Date on or immediately following such date unless sooner terminated pursuant to Section 18 or this Section 19. In the event that all of the shares of Common Stock made available under this Plan are subscribed prior to the expiration of this Plan, this Plan shall terminate at the end of that Offering Period and the shares available shall be allocated for purchase by Participants in that Offering Period on a pro- rata basis determined with respect to Participants' Account balances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)***Board Amendment Authority***. The Board may, at any time, terminate or, from time to time, amend, modify or suspend this Plan, in whole or in part and without notice. Stockholder approval for any amendment or modification shall not be required, except to the extent required by law or applicable stock exchange rules or required under Section 423 of the Code in order to preserve the intended tax consequences of this Plan. No Options may be granted during any suspension of this Plan or after the termination of this Plan, but the Committee will retain jurisdiction as to Options then outstanding in accordance with the terms of this Plan. No amendment, modification, or termination pursuant to this Section 19(b) shall, without written consent of the Participant, affect in any manner materially adverse to the Participant any rights or benefits of such Participant or obligations of the Company under any Option granted under this Plan prior to the effective date of such change. Changes contemplated by Section 17 or Section 18 shall not be deemed to constitute changes or amendments requiring Participant consent.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)***Certain Additional Committee Authority***. Notwithstanding the amendment provisions of Section 19(b) and without limiting the Board's authority thereunder and without limiting the Committee's authority pursuant to any other provision of this Plan, the Committee shall have the right (1) to designate from time to time the Subsidiaries whose employees may be eligible to participate in this Plan (including, without limitation, any Subsidiary that may first become such after the date stockholders first approve this Plan) (each a "**Participating Subsidiary**"), and (2) to change the service and other qualification requirements sets forth under the definition of Eligible Employee in Section 2 (subject to the requirements of Section 423(b) of the Code and applicable rules and regulations thereunder). Any such change shall not take effect earlier than the first Offering Period that starts on or after the effective date of such change. Any such change shall not require stockholder approval.

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**19. NOTICES**

All notices or other communications by a Participant to the Company contemplated by this Plan shall be deemed to have been duly given when received in the form and manner specified by the Committee (or its delegate) at the location, or by the person, designated by the Committee (or its delegate) for that purpose.

**20. CONDITIONS UPON ISSUANCE OF SHARES**

This Plan, the granting of Options under this Plan and the offer, issuance and delivery of shares of Common Stock are subject to compliance with all applicable federal and state laws, rules and regulations (including but not limited to state and federal securities laws) and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. The person acquiring any securities under this Plan will, if requested by the Company and as a condition precedent to the exercise of his or her Option, provide such assurances and representations to the Company as the Committee may deem necessary or desirable to assure compliance with all applicable legal requirements.

**21. PLAN CONSTRUCTION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)***Section 16***. It is the intent of the Company that transactions involving Options under this Plan (other than "**Discretionary Transactions**" as that term is defined in Rule 16b-3(b)(1) promulgated by the Commission under Section 16 of the Exchange Act, to the extent there are any Discretionary Transactions under the Plan), in the case of Participants who are or may be subject to the prohibitions of Section 16 of the Exchange Act, satisfy the requirements for exemption under Rule 16b-3(c) promulgated by the Commission under Section 16 of the Exchange Act to the maximum extent possible. Notwithstanding the foregoing, the Company shall have no liability to any Participant for Section 16 consequences of Options or other events with respect to this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)***Section 423***. Except as the Committee may expressly provide in the case of one or more sub-plans adopted pursuant to Section 12(b), this Plan and Options are intended to qualify under Section 423 of the Code. Accordingly, all Participants are to have the same rights and privileges (within the meaning of Section 423(b)(5) of the Code and except as not required thereunder to qualify this Plan under Section 423) under this Plan, subject to differences in Compensation among Participants and subject to the Contribution and share limits of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)***Interpretation***. If any provision of this Plan or of any Option would otherwise frustrate or conflict with the intents expressed above, that provision to the extent possible shall be interpreted so as to avoid such conflict. If the conflict remains irreconcilable, the Committee may

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disregard the provision if it concludes that to do so furthers the interest of the Company and is consistent with the purposes of this Plan as to such persons in the circumstances.

**22. EMPLOYEES' RIGHTS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)***No Employment Rights***. Nothing in this Plan (or in any Subscription Agreement or other document related to this Plan) will confer upon any Eligible Employee or Participant any right to continue in the employ or other service of the Company or any Subsidiary, constitute any contract or agreement of employment or other service or effect an employee's status as an employee at will, nor shall interfere in any way with the right of the Company or any Subsidiary to change such person's compensation or other benefits or to terminate his or her employment or other service, with or without cause. Nothing contained in this Section 23(a), however, is intended to adversely affect any express independent right of any such person under a separate employment or service contract other than a Subscription Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)***No Rights to Assets of the Company***. No Participant or other person will have any right, title or interest in any fund or in any specific asset (including shares of Common Stock) of the Company or any Subsidiary by reason of any Option hereunder. Neither the provisions of this Plan (or of any Subscription Agreement or other document related to this Plan), nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan will create, or be construed to create, a trust of any kind or a fiduciary relationship between the Company or any Subsidiary and any Participant, Beneficiary or other person. To the extent that a Participant, Beneficiary or other person acquires a right to receive payment pursuant to this Plan, such right will be no greater than the right of any unsecured general creditor of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)***No Stockholder Rights***. A Participant will not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by the Participant. No adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery.

**23. MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)***Governing Law***. This Plan, the Options, Subscription Agreements and other documents related to this Plan shall be governed by, and construed in accordance with, the laws of the State of Delaware.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)***Severability***. If any provision shall be held by a court of competent jurisdiction to be invalid and unenforceable, the remaining provisions of this Plan shall continue in effect.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)***Captions and Headings***. Captions and headings are given to the sections of this Plan solely as a convenience to facilitate reference. Such captions and headings shall not be deemed in any way material or relevant to the construction of interpretation of this Plan or any provision hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)***No Effect on Other Plans or Corporate Authority***. The adoption of this Plan shall not affect any other Company or Subsidiary compensation or incentive plans in effect. Nothing in this Plan will limit or be deemed to limit the authority of the Board or Committee (1) to establish any other forms of incentives or compensation for employees of the Company or any Subsidiary (with or without reference to the Common Stock), or (2) to grant or assume options (outside the scope of and in addition to those contemplated by this Plan) in connection with any proper corporate purpose; to the extent consistent with any other plan or authority. Benefits received by a Participant under an Option granted pursuant to this Plan shall not be deemed a part of the Participant's compensation for purposes of the determination of benefits under any other employee welfare or benefit plans or arrangements, if any, provided by the Company or any Subsidiary, except where the Committee or the Board (or the Board of Directors of the Subsidiary that sponsors such plan or arrangement, as applicable) expressly otherwise provides or authorizes in writing.

**24. TAX WITHHOLDING**

Notwithstanding anything else contained in this Plan herein to the contrary, the Company may deduct from a Participant's Account balance as of an Exercise Date, before the exercise of the Participant's Option is given effect on such date, the amount of taxes (if any) which the Company reasonably determines it or any Subsidiary may be required to withhold with respect to such exercise. In such event, the maximum number of whole shares subject to such Option (subject to the other limits set forth in this Plan) shall be purchased at the Option Price with the balance of the Participant's Account (after reduction for tax withholding amount).

Should the Company for any reason be unable, or elect not to, satisfy its or any Subsidiary's tax withholding obligations in the manner described in the preceding paragraph with respect to a Participant's exercise of an Option, or should the Company or any Subsidiary reasonably determine that it or an affiliated entity has a tax withholding obligation with respect to a disposition of shares acquired pursuant to the exercise of an Option prior to satisfaction of the holding period requirements of Section 423 of the Code, the Company or Subsidiary, as the case may be, shall have the right at its option to (1) require the Participant to pay or provide for payment of the amount of any taxes which the Company or Subsidiary reasonably determines that it or any affiliate is required to withhold with respect to such event or (2) deduct from any amount otherwise payable to or for the account of the Participant the amount of any taxes which

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the Company or Subsidiary reasonably determines that it or an affiliate is required to withhold with respect to such event.

**25. NOTICE OF SALE**

Any person who has acquired shares under this Plan shall give prompt written notice to the Company of any sale or other transfer of the shares if such sale or transfer occurs (1) within the two-year period after the Grant Date of the Offering Period with respect to which such shares were acquired, or (2) within the twelve-month period after the Exercise Date of the Offering Period with respect to which such shares were acquired.

## Exhibit 10.7

**AMENDMENT**

**TO**

**NONQUALIFIED DEFERRED COMPENSATION PLAN**

Alaska Air Group, Inc. (the "**Company**") originally adopted the Nonqualified Deferred Compensation Plan (the "**Plan**"), effective January 1, 1998, and the Plan was most recently amended and restated effective November 3, 2023. Capitalized terms used in this Amendment and not otherwise defined will have the meaning given to such terms in the Plan.

WHEREAS, pursuant to Section 12.1(a) of the Plan, the Company has reserved the right amend the Plan from time to time;

NOW THEREFORE, in connection with the Company's decision to allow employees of Horizon Air Industries, Inc. to participate in the Defined Contribution OSRP Plan, the Company hereby amends the Plan as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**1.**Section 10.2(b)(ii) of the Plan is amended to read in full as follows (with the text noted in strikethrough below deleted from, and the <u>underlined</u> text below added, to the existing language):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.(ii)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.(A)&nbsp;&nbsp;&nbsp;&nbsp;on and after June 1, 2008, is hired or promoted into a position at a level or with a title that, in accordance with a policy of the Company or an Employer, is eligible to participate in the Defined Contribution OSRP Plan; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.(B)&nbsp;&nbsp;&nbsp;&nbsp;has a position of Vice President or above and is neither eligible for nor accruing benefits under the 1995 OSRP; provided, however, that the only Employee <u>Employees</u> of Horizon Air Industries, Inc. who may be an Eligible Elected Officer is <u>are</u> the President and/or Chief Executive Officer of Horizon Air Industries, Inc. <u>and any other Employees of Horizon Air Industries, Inc. whom the Alaska Air Group Board of Directors Compensation and Leadership Development Committee approves to participate in the Defined Contribution OSRP Plan</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.**Section 10.2(e) of the Plan is amended to read in full as follows (with the <u>underlined</u> text below added to the existing language):

<u>OSRP Eligible Compensation</u>

"OSRP Eligible Compensation" for a Participant for a Plan Year means the sum of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the gross amount of base recurring salary paid to the Participant during the Plan Year (or, if less, the portion of the Plan Year during which the Participant was an Eligible Elected Officer)<u>; provided, however, with respect to any Participant who is an Employee of Horizon Air Industries, Inc., and whose Eligibility Effective Date is June 1, 2025, the gross amount of base recurring salary paid to the Participant for the portion of the 2025 Plan Year that ends on the Eligibility Effective Date will also be included for purposes of the determining the OSRP Employer Contribution for the 2025 Plan Year for each such Participant</u>; plus

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) the gross amount of any short-term annual cash bonus awarded to the Participant, if paid or payable as of a date when the Participant was an Eligible Elected Officer.

The amounts in "(i)" and "(ii)" shall each be the gross dollar amount determined prior to any tax withholding, other deductions or withheld after-tax or pre-tax amounts, or any pre-tax deferrals to any Account in this Plan or any other qualified or nonqualified deferred compensation plan or arrangement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.Effective Date.** This Amendment shall be effective as of the date of the approval of this Amendment by the Company's Board of Directors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.Ratification.** In all other respects, the Plan is reaffirmed and ratified.

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IN WITNESS WHEREOF, the Company has executed this Amendment as of the date set forth below.

**Alaska Air Group, Inc.**

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Title: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

Date: <u>&nbsp;&nbsp;&nbsp;&nbsp;</u>

4907-5576-0420v.2 0017572-000428

## Exhibit 10.8

**EXHIBIT A**

**ALASKA AIR GROUP, INC.<br>2016 PERFORMANCE INCENTIVE PLAN<br>(as amended and restated effective May 8, 2025)**

**1. PURPOSE OF PLAN**

The purpose of this Alaska Air Group, Inc. 2016 Performance Incentive Plan (this "**Plan**") of Alaska Air Group, Inc., a Delaware corporation (the "**Corporation**"), is to promote the success of the Corporation by providing an additional means through the grant of awards to attract, motivate, retain and reward selected employees and other eligible persons and to enhance the alignment of the interests of the selected participants with the interests of the Corporation's stockholders.

**2. ELIGIBILITY**

The Administrator (as such term is defined in Section 3.1) may grant awards under this Plan only to those persons that the Administrator determines to be Eligible Persons. An "**Eligible Person**" is any person who is either: (a) an officer (whether or not a director) or employee of the Corporation or one of its Subsidiaries; (b) a director of the Corporation or one of its Subsidiaries; or (c) an individual consultant or advisor who renders or has rendered bona fide services (other than services in connection with the offering or sale of securities of the Corporation or one of its Subsidiaries in a capital-raising transaction or as a market maker or promoter of securities of the Corporation or one of its Subsidiaries) to the Corporation or one of its Subsidiaries and who is selected to participate in this Plan by the Administrator; provided, however, that a person who is otherwise an Eligible Person under clause (c) above may participate in this Plan only if such participation would not adversely affect either the Corporation's eligibility to use Form S-8 to register under the Securities Act of 1933, as amended (the "**Securities Act**"), the offering and sale of shares issuable under this Plan by the Corporation or the Corporation's compliance with any other applicable laws. An Eligible Person who has been granted an award (a "participant") may, if otherwise eligible, be granted additional awards if the Administrator shall so determine. As used herein, "**Subsidiary**" means any corporation or other entity a majority of whose outstanding voting stock or voting power is beneficially owned directly or indirectly by the Corporation; and "**Board**" means the Board of Directors of the Corporation.

**3. PLAN ADMINISTRATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1 *The Administrator***. This Plan shall be administered by and all awards under this Plan shall be authorized by the Administrator. The "**Administrator**" means the Board or one or more committees (or subcommittees, as the case may be) appointed by the Board or another

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committee (within its delegated authority) to administer all or certain aspects of this Plan. Any such committee shall be comprised solely of one or more directors or such number of directors as may be required under applicable law. A committee may delegate some or all of its authority to another committee so constituted. The Board or a committee comprised solely of directors may also delegate, to the extent permitted by applicable law, to one or more officers of the Corporation, its authority under this Plan. The Board or another committee (within its delegated authority) may delegate different levels of authority to different committees or persons with administrative and grant authority under this Plan. Unless otherwise provided in the Bylaws of the Corporation or the applicable charter of any Administrator: (a) a majority of the members of the acting Administrator shall constitute a quorum, and (b) the vote of a majority of the members present assuming the presence of a quorum or the unanimous written consent of the members of the Administrator shall constitute action by the acting Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2 *Powers of the Administrator***. Subject to the express provisions of this Plan, the Administrator is authorized and empowered to do all things necessary or desirable in connection with the authorization of awards and the administration of this Plan (in the case of a committee or delegation to one or more officers, within any express limits on the authority delegated to that committee or person(s)), including, without limitation, the authority to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)determine eligibility and, from among those persons determined to be eligible, determine the particular Eligible Persons who will receive an award under this Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)grant awards to Eligible Persons, determine the price (if any) at which securities will be offered or awarded and the number of securities to be offered or awarded to any of such persons (in the case of securities-based awards), determine the other specific terms and conditions of awards consistent with the express limits of this Plan, establish the installment(s) (if any) in which such awards shall become exercisable or shall vest (which may include, without limitation, performance and/or time-based schedules), or determine that no delayed exercisability or vesting is required, establish any applicable performance-based exercisability or vesting requirements, determine the circumstances in which any performance-based goals (or the applicable measure of performance) will be adjusted and the nature and impact of any such adjustment, determine the extent (if any) to which any applicable exercise and vesting requirements have been satisfied, establish the events (if any) on which exercisability or vesting may accelerate (which may include, without limitation, retirement and other specified terminations of employment or services, or other circumstances), and establish the events (if any) of termination, expiration or reversion of such awards;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)approve the forms of any award agreements (which need not be identical either as to type of award or among participants);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)construe and interpret this Plan and any agreements defining the rights and obligations of the Corporation, its Subsidiaries, and participants under this Plan, make any and all determinations

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under this Plan and any such agreements, further define the terms used in this Plan, and prescribe, amend and rescind rules and regulations relating to the administration of this Plan or the awards granted under this Plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)cancel, modify, or waive the Corporation's rights with respect to, or modify, discontinue, suspend, or terminate any or all outstanding awards, subject to any required consent under Section 8.6.5;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)accelerate, waive or extend the vesting or exercisability, or modify or extend the term of, any or all such outstanding awards (in the case of options or stock appreciation rights, within the maximum term of such awards) in such circumstances as the Administrator may deem appropriate (including, without limitation, in connection with a retirement or other termination of employment or services, or other circumstances) subject to any required consent under Section 8.6.5;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)adjust the number of shares of Common Stock subject to any award, adjust the price of any or all outstanding awards or otherwise waive or change previously imposed terms and conditions, in such circumstances as the Administrator may deem appropriate, in each case subject to Sections 4 and 8.6 (and subject to the no repricing provision below);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)determine the date of grant of an award, which may be a designated date after but not before the date of the Administrator's action to grant the award (unless otherwise designated by the Administrator, the date of grant of an award shall be the date upon which the Administrator took the action granting an award);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)determine whether, and the extent to which, adjustments are required pursuant to Section 7.1 hereof and take any other actions contemplated by Section 7 in connection with the occurrence of an event of the type described in Section 7;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)acquire or settle (subject to Sections 7 and 8.6) rights under awards in cash, stock of equivalent value, or other consideration (subject to the no repricing provision below); and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)determine the fair market value of the Common Stock or awards under this Plan from time to time and/or the manner in which such value will be determined.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.3 *Prohibition on Repricing***. Notwithstanding anything to the contrary in Section 3.2 and except for an adjustment pursuant to Section 7.1 or a repricing approved by stockholders, in no case may the Administrator (1) amend an outstanding stock option or SAR to reduce the exercise price or base price of the award, (2) cancel, exchange, or surrender an outstanding stock option or SAR in exchange for cash or other awards for the purpose of repricing the award, or (3) cancel, exchange, or surrender an outstanding stock option or SAR in exchange for an option or SAR with an exercise or base price that is less than the exercise or base price of the original award.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.4 *Binding Determinations***. Any determination or other action taken by, or inaction of, the Corporation, any Subsidiary, or the Administrator relating or pursuant to this Plan (or any award made under this Plan) and within its authority hereunder or under applicable law shall be within the absolute discretion of that entity or body and shall be conclusive and binding upon all persons. Neither the Board nor any other Administrator, nor any member thereof or person acting at the direction thereof, shall be liable for any act, omission, interpretation, construction or determination made in good faith in connection with this Plan (or any award made under this Plan), and all such persons shall be entitled to indemnification and reimbursement by the Corporation in respect of any claim, loss, damage or expense (including, without limitation, attorneys' fees) arising or resulting therefrom to the fullest extent permitted by law and/or under any directors and officers liability insurance coverage that may be in effect from time to time. Neither the Board nor any other Administrator, nor any member thereof or person acting at the direction thereof, nor the Corporation or any of its Subsidiaries, shall be liable for any damages of a participant should an option intended as an ISO (as defined below) fail to meet the requirements of the Internal Revenue Code of 1986, as amended (the "**Code**"), applicable to ISOs, should any other award(s) fail to qualify for any intended tax treatment, should any award grant or other action with respect thereto not satisfy Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as amended, or otherwise for any tax or other liability imposed on a participant with respect to an award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.5 *Reliance on Experts***. In making any determination or in taking or not taking any action under this Plan, the Administrator may obtain and may rely upon the advice of experts, including employees and professional advisors to the Corporation. No director, officer or agent of the Corporation or any of its Subsidiaries shall be liable for any such action or determination taken or made or omitted in good faith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.6 *Delegation***. The Administrator may delegate ministerial, non-discretionary functions to individuals who are officers or employees of the Corporation or any of its Subsidiaries or to third parties.

**4. SHARES OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMITS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.1 *Shares Available***. Subject to the provisions of Section 7.1, the capital stock that may be delivered under this Plan shall be shares of the Corporation's authorized but unissued Common Stock and any shares of its Common Stock held as treasury shares. For purposes of this Plan, "**Common Stock**" shall mean the common stock of the Corporation and such other securities or property as may become the subject of awards under this Plan, or may become subject to such awards, pursuant to an adjustment made under Section 7.1.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.2 *Share Limits***. Effective as of the date of this amended and restated version of this Plan first set forth above (the "**Amendment Effective Date**"), the maximum number of shares of Common Stock that may be delivered on and after the Amendment Effective Date pursuant to awards (including awards outstanding on the Amendment Effective Date) granted to Eligible Persons under this Plan (the "**Share Limit**") is equal to the sum of the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;**1,450,000** shares, plus

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)&nbsp;&nbsp;&nbsp;&nbsp;the number of any shares subject to stock options granted under the Corporation's 2008 Performance Incentive Plan and outstanding on March 18, 2021, which expire, or for any reason are cancelled or terminated, after March 18, 2021 without being exercised.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.3 *Additional Share Limits***. The following limits also apply with respect to awards granted under this Plan. These limits are in addition to, not in lieu of, the aggregate Share Limit in Section 4.2.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The maximum number of shares of Common Stock that may be delivered pursuant to options qualified as incentive stock options granted under this Plan is 6,000,000 shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The maximum number of shares of Common Stock subject to those awards that are granted under this Plan during any one calendar year to an individual who, on the grant date of the award, is a non-employee director is the number of shares that produce a grant date fair value for the award that, when combined with the grant date fair value of any other awards granted under this Plan during that same calendar year to that individual in his or her capacity as a non-employee director, is $300,000. For purposes of this Section 4.3(b), a "**non-employee director**" is an individual who, on the grant date of the award, is a member of the Board who is not then an officer or employee of the Corporation or one of its Subsidiaries. For purposes of this Section 4.3(b), "**grant date fair value**" means the value of the award as of the date of grant of the award and as determined using the equity award valuation principles applied in the Corporation's financial reporting. The limits of this Section 4.3(b) do not apply to, and shall be determined without taking into account, any award granted to an individual who, on the grant date of the award, is an officer or employee of the Corporation or one of its Subsidiaries. The limits of this Section 4.3(b) apply on an individual basis and not on an aggregate basis to all non-employee directors as a group.

Each of the foregoing numerical limits is subject to adjustment as contemplated by Sections 7 and 8.10.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.4 *Awards Settled in Cash, Reissue of Awards and Shares***. Except as provided in the next sentence, shares that are subject to or underlie awards granted under this Plan which expire or for any reason are cancelled or terminated, are forfeited, fail to vest, or for any other reason are not paid or delivered under this Plan shall not be counted against the Share Limit and shall be available for subsequent awards under this Plan. Shares that are exchanged by a participant or withheld by the Corporation as full or partial payment in connection with any award under this Plan, as well as any shares exchanged by a participant or withheld by the Corporation or one of its Subsidiaries to satisfy the tax withholding obligations related to any award, shall be counted against the Share Limit and shall not be available for subsequent awards under this Plan. To the extent that an award granted under this Plan is settled in cash or a form other than shares of Common Stock, the shares that would have been delivered had there been no such cash or other settlement shall not be counted against the Share Limit and shall be available for subsequent awards under this Plan. In the event that shares of Common Stock are

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delivered in respect of a dividend equivalent right granted under this Plan, the number of shares delivered with respect to the award shall be counted against the Share Limit. (For purposes of clarity, if 1,000 dividend equivalent rights are granted and outstanding when the Corporation pays a dividend, and 50 shares are delivered in payment of those rights with respect to that dividend, 50 shares shall be counted against the Share Limit). To the extent that shares of Common Stock are delivered pursuant to the exercise of a stock appreciation right or stock option granted under this Plan, the number of underlying shares as to which the exercise related shall be counted against the Share Limit, as opposed to only counting the shares issued. (For purposes of clarity, if a stock appreciation right relates to 100,000 shares and is exercised at a time when the payment due to the participant is 15,000 shares, 100,000 shares shall be charged against the Share Limit with respect to such exercise.) Except as otherwise provided by the Administrator, shares delivered in respect of a dividend equivalent right shall not count against any individual award limit under this Plan other than the aggregate Share Limit. Refer to Section 8.10 for application of the foregoing share limits with respect to assumed awards.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**4.5 *No Fractional Shares; Minimum Issue***. Unless otherwise expressly provided by the Administrator, no fractional shares shall be delivered under this Plan. The Administrator may pay cash in lieu of any fractional shares in settlements of awards under this Plan. The Administrator may from time to time impose a limit (of not greater than 100 shares) on the minimum number of shares that may be purchased or exercised as to awards (or any particular award) granted under this Plan unless (as to any particular award) the total number purchased or exercised is the total number at the time available for purchase or exercise under the award.

**5. AWARDS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1 *Type and Form of Awards***. The Administrator shall determine the type or types of award(s) to be made to each selected Eligible Person. Awards may be granted singly, in combination or in tandem. Awards also may be made in combination or in tandem with, in replacement of, as alternatives to, or as the payment form for grants or rights under any other employee or compensation plan of the Corporation or one of its Subsidiaries. The types of awards that may be granted under this Plan are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1.1 *Stock Options***. A stock option is the grant of a right to purchase a specified number of shares of Common Stock during a specified period as determined by the Administrator. An option may be intended as an incentive stock option within the meaning of Section 422 of the Code (an "**ISO**") or a nonqualified stock option (an option not intended to be an ISO). The award agreement for an option will indicate if the option is intended as an ISO; otherwise it will be deemed to be a nonqualified stock option. The maximum term of each option (ISO or nonqualified) shall be ten (10) years. The per share exercise price for each option shall be not less than 100% of the fair market value of a share of Common Stock on the date of grant of the option. When an option is exercised, the exercise price for the shares to be purchased shall be paid in full in cash or such other method permitted by the Administrator consistent with Section 5.4.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1.2 *Additional Rules Applicable to ISOs***. To the extent that the aggregate fair market value (determined at the time of grant of the

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applicable option) of stock with respect to which ISOs first become exercisable by a participant in any calendar year exceeds $100,000, taking into account both Common Stock subject to ISOs under this Plan and stock subject to ISOs under all other plans of the Corporation or one of its Subsidiaries (or any parent or predecessor corporation to the extent required by and within the meaning of Section 422 of the Code and the regulations promulgated thereunder), such options shall be treated as nonqualified stock options. In reducing the number of options treated as ISOs to meet the $100,000 limit, the most recently granted options shall be reduced first. To the extent a reduction of simultaneously granted options is necessary to meet the $100,000 limit, the Administrator may, in the manner and to the extent permitted by law, designate which shares of Common Stock are to be treated as shares acquired pursuant to the exercise of an ISO. ISOs may only be granted to employees of the Corporation or one of its subsidiaries (for this purpose, the term "subsidiary" is used as defined in Section 424(f) of the Code, which generally requires an unbroken chain of ownership of at least 50% of the total combined voting power of all classes of stock of each subsidiary in the chain beginning with the Corporation and ending with the subsidiary in question). No ISO may be granted to any person who, at the time the option is granted, owns (or is deemed to own under Section 424(d) of the Code) shares of outstanding Common Stock possessing more than 10% of the total combined voting power of all classes of stock of the Corporation, unless the exercise price of such option is at least 110% of the fair market value of the stock subject to the option and such option by its terms is not exercisable after the expiration of five years from the date such option is granted. If an otherwise-intended ISO fails to meet the applicable requirements of Section 422 of the Code, the option shall be a nonqualified stock option.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1.3 *Stock Appreciation Rights***. A stock appreciation right or "**SAR**" is a right to receive a payment, in cash and/or Common Stock, equal to the excess of the fair market value of a specified number of shares of Common Stock on the date the SAR is exercised over the "**base price**" of the award, which base price shall be set forth in the applicable award agreement and shall be not less than 100% of the fair market value of a share of Common Stock on the date of grant of the SAR. The maximum term of a SAR shall be ten (10) years.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1.4 *Other Awards; Dividend Equivalent Rights***. The other types of awards that may be granted under this Plan include: (a) stock bonuses, restricted stock, performance stock, stock units, restricted stock units, deferred shares, phantom stock or similar rights to purchase or acquire shares, whether at a fixed or variable price (or no price) or fixed or variable ratio related to the Common Stock, and any of which may (but need not) be fully vested at grant or vest upon the passage of time, the occurrence of one or more events, the satisfaction of performance criteria or other conditions, or any combination thereof; or (b) cash awards. The types of cash awards that may be granted under this Plan include the opportunity to receive a payment for the achievement of one or more goals established by the Administrator, on such terms as the Administrator may provide, as well as discretionary cash awards. Dividend equivalent rights may be granted as a separate award or in connection with another award under this Plan; provided, however, that dividend equivalent rights may not be granted as to a stock option or SAR granted under this Plan. In addition, any dividends and/or dividend

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equivalents as to the portion of an award that is subject to unsatisfied vesting requirements will be subject to termination and forfeiture to the same extent as the corresponding portion of the award to which they relate in the event the applicable vesting requirements are not satisfied.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2 *Award Agreements***. Each award shall be evidenced by a written or electronic award agreement or notice in a form approved by the Administrator (an "**award agreement**"), and, in each case and if required by the Administrator, executed or otherwise electronically accepted by the recipient of the award in such form and manner as the Administrator may require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.3 *Deferrals and Settlements***. Payment of awards may be in the form of cash, Common Stock, other awards or combinations thereof as the Administrator shall determine, and with such restrictions (if any) as it may impose. The Administrator may also require or permit participants to elect to defer the issuance of shares or the settlement of awards in cash under such rules and procedures as it may establish under this Plan. The Administrator may also provide that deferred settlements include the payment or crediting of interest or other earnings on the deferral amounts, or the payment or crediting of dividend equivalents where the deferred amounts are denominated in shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.4 *Consideration for Common Stock or Awards***. The purchase price (if any) for any award granted under this Plan or the Common Stock to be delivered pursuant to an award, as applicable, may be paid by means of any lawful consideration as determined by the Administrator, including, without limitation, one or a combination of the following methods:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• services rendered by the recipient of such award;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• cash, check payable to the order of the Corporation, or electronic funds transfer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• notice and third party payment in such manner as may be authorized by the Administrator;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the delivery of previously owned shares of Common Stock;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• by a reduction in the number of shares otherwise deliverable pursuant to the award; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• subject to such procedures as the Administrator may adopt, pursuant to a "cashless exercise" with a third party who provides financing for the purposes of (or who otherwise facilitates) the purchase or exercise of awards.

In no event shall any shares newly-issued by the Corporation be issued for less than the minimum lawful consideration for such shares or for consideration other than consideration permitted by applicable state law. Shares of Common Stock used to satisfy the exercise price of an option shall be valued at their fair market value. The Corporation will not be

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obligated to deliver any shares unless and until it receives full payment of the exercise or purchase price therefor and any related withholding obligations under Section 8.5 and any other conditions to exercise or purchase have been satisfied. Unless otherwise expressly provided in the applicable award agreement, the Administrator may at any time eliminate or limit a participant's ability to pay any purchase or exercise price of any award or shares by any method other than cash payment to the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.5 *Definition of Fair Market Value***. For purposes of this Plan, "fair market value" shall mean, unless otherwise determined or provided by the Administrator in the circumstances, the closing price (in regular trading) for a share of Common Stock on the principal securities exchange on which the Common Stock is listed or admitted to trade (the "**Exchange**") for the date in question or, if no sales of Common Stock were reported on the Exchange on that date, the closing price (in regular trading) for a share of Common Stock on the Exchange on the last day preceding the date in question on which sales of Common Stock were reported on the Exchange. The Administrator may, however, provide with respect to one or more awards that the fair market value shall equal the closing price (in regular trading) for a share of Common Stock on the Exchange on the last trading day preceding the date in question or the average of the high and low trading prices of a share of Common Stock on the Exchange for the date in question or the most recent trading day. If the Common Stock is no longer listed or is no longer actively traded on an established securities exchange as of the applicable date, the fair market value of the Common Stock shall be the value as reasonably determined by the Administrator for purposes of the award in the circumstances. The Administrator also may adopt a different methodology for determining fair market value with respect to one or more awards if a different methodology is necessary or advisable to secure any intended favorable tax, legal or other treatment for the particular award(s) (for example, and without limitation, the Administrator may provide that fair market value for purposes of one or more awards will be based on an average of closing prices (or the average of high and low daily trading prices) for a specified period preceding the relevant date).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.6 *Transfer Restrictions.***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.6.1 *Limitations on Exercise and Transfer***. Unless otherwise expressly provided in (or pursuant to) this Section 5.6 or required by applicable law: (a) all awards are non-transferable and shall not be subject in any manner to sale, transfer, anticipation, alienation, assignment, pledge, encumbrance or charge; (b) awards shall be exercised only by the participant; and (c) amounts payable or shares issuable pursuant to any award shall be delivered only to (or for the account of) the participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.6.2 *Exceptions***. The Administrator may permit awards to be exercised by and paid to, or otherwise transferred to, other persons or entities pursuant to such conditions and procedures, including limitations on subsequent transfers, as the Administrator may, in its sole discretion, establish in writing. Any permitted transfer shall be subject to compliance with applicable federal and state securities laws and shall not be for value (other than nominal consideration, settlement of marital property rights,

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or for interests in an entity in which more than 50% of the voting interests are held by the Eligible Person or by the Eligible Person's family members).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.6.3 *Further Exceptions to Limits on Transfer***. The exercise and transfer restrictions in Section 5.6.1 shall not apply to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)transfers to the Corporation (for example, in connection with the expiration or termination of the award),

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)the designation of a beneficiary to receive benefits in the event of the participant's death or, if the participant has died, transfers to or exercise by the participant's beneficiary, or, in the absence of a validly designated beneficiary, transfers by will or the laws of descent and distribution,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)subject to any applicable limitations on ISOs, transfers to a family member (or former family member) pursuant to a domestic relations order if received by the Administrator,

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)if the participant has suffered a disability, permitted transfers or exercises on behalf of the participant by his or her legal representative, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)the authorization by the Administrator of "cashless exercise" procedures with third parties who provide financing for the purpose of (or who otherwise facilitate) the exercise of awards consistent with applicable laws and any limitations imposed by the Administrator.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.7 *International Awards***. One or more awards may be granted to Eligible Persons who provide services to the Corporation or one of its Subsidiaries outside of the United States. Any awards granted to such persons may be granted pursuant to the terms and conditions of any applicable sub-plans, if any, appended to this Plan and approved by the Administrator from time to time. The awards so granted need not comply with other specific terms of this Plan, provided that stockholder approval of any deviation from the specific terms of this Plan is not required by applicable law or any applicable listing agency.

**6. EFFECT OF TERMINATION OF EMPLOYMENT OR SERVICE ON AWARDS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1 *General***. The Administrator shall establish the effect (if any) of a termination of employment or service on the rights and benefits under each award under this Plan and in so doing may make distinctions based upon, inter alia, the cause of termination and type of award. If the participant is not an employee of the Corporation or one of its Subsidiaries, is not a member of the Board, and provides other services to the Corporation or one of its Subsidiaries, the Administrator shall be the sole judge for purposes of this Plan (unless a contract or the award otherwise provides) of whether the participant continues to render services to the Corporation or one of its Subsidiaries and the date, if any, upon which such services shall be deemed to have terminated.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2 *Events Not Deemed Terminations of Employment***. Unless the express policy of the Corporation or one of its Subsidiaries, or the Administrator, otherwise provides, or except as otherwise required by applicable law, the employment relationship shall not be considered terminated in the case of (a) medical leave, (b) military leave, or (c) any other leave of absence authorized by the Corporation or one of its Subsidiaries, or the Administrator; provided that, unless reemployment upon the expiration of such leave is guaranteed by contract or law or the Administrator otherwise provides, such leave is for a period of not more than three months. In the case of any employee of the Corporation or one of its Subsidiaries on an approved leave of absence, continued vesting of the award while on leave from the employ of the Corporation or one of its Subsidiaries may be suspended until the employee returns to service, unless the Administrator otherwise provides or applicable law otherwise requires. In no event shall an award be exercised after the expiration of any applicable maximum term of the award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.3 *Effect of Change of Subsidiary Status***. For purposes of this Plan and any award, if an entity ceases to be a Subsidiary of the Corporation a termination of employment or service shall be deemed to have occurred with respect to each Eligible Person in respect of such Subsidiary who does not continue as an Eligible Person in respect of the Corporation or another Subsidiary that continues as such after giving effect to the transaction or other event giving rise to the change in status unless the Subsidiary that is sold, spun-off or otherwise divested (or its successor or a direct or indirect parent of such Subsidiary or successor) assumes the Eligible Person's award(s) in connection with such transaction.

**7. ADJUSTMENTS; ACCELERATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.1 *Adjustments***.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Subject to Section 7.2, upon (or, as may be necessary to effect the adjustment, immediately prior to): any reclassification, recapitalization, stock split (including a stock split in the form of a stock dividend) or reverse stock split; any merger, combination, consolidation, conversion or other reorganization; any spin-off, split-up, or extraordinary dividend distribution in respect of the Common Stock; or any exchange of Common Stock or other securities of the Corporation, or any similar, unusual or extraordinary corporate transaction in respect of the Common Stock; then the Administrator shall equitably and proportionately adjust (1) the number and type of shares of Common Stock (or other securities) that thereafter may be made the subject of awards (including the specific share limits, maximums and numbers of shares set forth elsewhere in this Plan), (2) the number, amount and type of shares of Common Stock (or other securities or property) subject to any outstanding awards, (3) the grant, purchase, or exercise price (which term includes the base price of any SAR or similar right) of any outstanding awards, and/or (4) the securities, cash or other property deliverable upon exercise or payment of any outstanding awards, in each case to the extent necessary to preserve (but not increase) the level of incentives intended by this Plan and the then-outstanding awards.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Without limiting the generality of Section 3.4, any good faith determination by the Administrator as to whether an adjustment is required in the circumstances pursuant to this Section 7.1, and the extent and nature of any such adjustment, shall be conclusive and binding on all persons.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2 *Corporate Transactions - Assumption and Termination of Awards***.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Upon any event in which the Corporation does not survive, or does not survive as a public company in respect of its Common Stock (including, without limitation, a dissolution, merger, combination, consolidation, conversion, exchange of securities, or other reorganization, or a sale of all or substantially all of the business, stock or assets of the Corporation, in any case, in connection with which the Corporation does not survive or does not survive as a public company in respect of its Common Stock), then the Administrator may make provision for a cash payment in settlement of, or for the termination, assumption, substitution or exchange of any or all outstanding awards or the cash, securities or property deliverable to the holder of any or all outstanding awards, based upon, to the extent relevant under the circumstances, the distribution or consideration payable to holders of the Common Stock upon or in respect of such event. Upon the occurrence of any event described in the preceding sentence, in connection with which the Administrator has made a provision for the award to be terminated (and the Administrator has not made a provision for the substitution, assumption, exchange or other continuation or settlement of the award): (1) unless otherwise provided in the applicable award agreement, each then-outstanding option and SAR shall become fully vested, all shares of restricted stock then outstanding shall fully vest free of restrictions, and each other award granted under this Plan that is then outstanding shall become payable to the holder of such award (with any performance goals applicable to the award in each case being deemed met, unless otherwise provided in the award agreement, at the "**target**" performance level); and (2) each award (including any award or portion thereof that, by its terms, does not accelerate and vest in the circumstances) shall terminate upon the related event; provided that the holder of an option or SAR shall be given reasonable advance notice of the impending termination and a reasonable opportunity to exercise his or her outstanding vested options and SARs (after giving effect to any accelerated vesting required in the circumstances) in accordance with their terms before the termination of such awards (except that in no case shall more than ten days' notice of the impending termination be required and any acceleration of vesting and any exercise of any portion of an award that is so accelerated may be made contingent upon the actual occurrence of the event).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Without limiting the preceding paragraph, in connection with any event referred to in the preceding paragraph or any change in control event defined in any applicable award agreement, the Administrator may, in its discretion, provide for the accelerated vesting of any award or awards as and to the extent determined by the Administrator in the circumstances.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)For purposes of this Section 7.2, an award shall be deemed to have been "assumed" if (without limiting other circumstances in which an award is assumed) the award continues after an event referred to above in this Section 7.2, and/or is assumed and continued by the surviving entity following such event (including, without limitation, an entity that, as a result of such event, owns the Corporation or all or substantially all of the Corporation's assets directly or through one or more subsidiaries (a "**Parent**")), and confers the right to purchase or receive, as applicable and subject to vesting and the other terms and conditions of the award, for each share of Common Stock subject to the award immediately prior to the event, the consideration (whether cash, shares, or other securities or property) received in the event by the stockholders of the Corporation for each share of Common Stock sold or exchanged in such event (or the consideration received by a majority of the stockholders participating in such event if the stockholders were offered a choice of consideration); provided, however, that if the consideration offered for a share of Common Stock in the event is not solely the ordinary common stock of a successor corporation or a Parent, the Administrator may provide for the consideration to be received upon exercise or payment of the award, for each share subject to the award, to be solely ordinary common stock of the successor corporation or a Parent equal in fair market value to the per share consideration received by the stockholders participating in the event.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Administrator may adopt such valuation methodologies for outstanding awards as it deems reasonable in the event of a cash or property settlement and, in the case of options, SARs or similar rights, but without limitation on other methodologies, may base such settlement solely upon the excess if any of the per share amount payable upon or in respect of such event over the exercise or base price of the award. In the case of an option, SAR or similar right as to which the per share amount payable upon or in respect of such event is less than or equal to the exercise or base price of the award, the Administrator may terminate such award in connection with an event referred to in this Section 7.2 without any payment in respect of such award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)In any of the events referred to in this Section 7.2, the Administrator may take such action contemplated by this Section 7.2 prior to such event (as opposed to on the occurrence of such event) to the extent that the Administrator deems the action necessary to permit the participant to realize the benefits intended to be conveyed with respect to the underlying shares. Without limiting the generality of the foregoing, the Administrator may deem an acceleration and/or termination to occur immediately prior to the applicable event and, in such circumstances, will reinstate the original terms of the award if an event giving rise to an acceleration and/or termination does not occur.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Without limiting the generality of Section 3.4, any good faith determination by the Administrator pursuant to its authority under this Section 7.2 shall be conclusive and binding on all persons.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)The Administrator may override the provisions of Section 7.2 by express provision in the award agreement and may accord any Eligible Person a right to refuse any acceleration, whether pursuant to the award agreement or otherwise, in such circumstances as the Administrator may approve. The portion of any ISO accelerated in connection with an event referred to in Section 7.2 (or such other circumstances as may trigger accelerated vesting of the award) shall remain exercisable as an ISO only to the extent the applicable $100,000 limitation on ISOs is not exceeded. To the extent exceeded, the accelerated portion of the option shall be exercisable as a nonqualified stock option under the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3 *Definition of Change in Control***. With respect to a particular award granted under this Plan, a "**Change in Control**" shall be deemed to have occurred as of the first day, after the date of grant of the particular award, that any one or more of the following conditions shall have been satisfied:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)the consummation of:

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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 the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(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. For these purposes, "**Incumbent Directors**" means (A) individuals who constitute the Board at the beginning of such period; and (B) individuals who were nominated or elected by all of, or a committee composed entirely of, the individuals described in (A); and (C) individuals who were nominated or elected by individuals described in (B).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)any Person (meaning any individual, entity or group within the meaning of Section 13(d)(3) or 14(d) of the Exchange Act) 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 the Corporation 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 the Corporation) representing 20% or more of the combined voting power of the then-outstanding Voting Securities.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)approval by the stockholders of the Corporation of any plan or proposal for the liquidation or dissolution of the Corporation.

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 the Corporation 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.

**8. OTHER PROVISIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.1 *Compliance with Laws***. This Plan, the granting and vesting of awards under this Plan, the offer, issuance and delivery of shares of Common Stock, and/or the payment of money under this Plan or under awards are subject to compliance with all applicable federal, state, local and foreign laws, rules and regulations (including but not limited to state and federal securities law and federal margin requirements) and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Corporation, be necessary or advisable in connection therewith. The person acquiring any securities under this Plan will, if requested by the Corporation or one of its Subsidiaries, provide such assurances and representations to the Corporation or one of its Subsidiaries as the Administrator may deem necessary or desirable to assure compliance with all applicable legal and accounting requirements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2 *No Rights to Award***. No person shall have any claim or rights to be granted an award (or additional awards, as the case may be) under this Plan, subject to any express contractual rights (set forth in a document other than this Plan) to the contrary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.3 *No Employment/Service Contract***. Nothing contained in this Plan (or in any other documents under this Plan or in any award) shall confer upon any Eligible Person or other participant any right to continue in the employ or other service of the Corporation or one of its Subsidiaries, constitute any contract or agreement of employment or other service or affect an employee's status as an employee at will, nor shall interfere in any way with the right of the Corporation or one of its Subsidiaries to change a person's compensation or other benefits, or to terminate his or her employment or other service, with or without cause. Nothing in this Section 8.3, however, is intended to adversely affect any express independent right of such person under a separate employment or service contract other than an award agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.4 *Plan Not Funded***. Awards payable under this Plan shall be payable in shares or from the general assets of the Corporation, and no special or separate reserve, fund or deposit shall be made to assure payment of such awards. No participant, beneficiary or other person shall have any right, title or interest in any fund or in any specific asset (including shares of Common Stock, except as expressly otherwise provided) of the Corporation or one of its Subsidiaries by reason of any award hereunder. Neither the provisions of this Plan (or of any related documents), nor the creation or adoption of this Plan, nor any action taken pursuant to the

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provisions of this Plan shall create, or be construed to create, a trust of any kind or a fiduciary relationship between the Corporation or one of its Subsidiaries and any participant, beneficiary or other person. To the extent that a participant, beneficiary or other person acquires a right to receive payment pursuant to any award hereunder, such right shall be no greater than the right of any unsecured general creditor of the Corporation.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.5 *Tax Withholding***. Upon any exercise, vesting, or payment of any award, or upon the disposition of shares of Common Stock acquired pursuant to the exercise of an ISO prior to satisfaction of the holding period requirements of Section 422 of the Code, or upon any other tax withholding event with respect to any award, arrangements satisfactory to the Corporation shall be made to provide for any taxes the Corporation or any of its Subsidiaries may be required or permitted to withhold with respect to such award event or payment. Such arrangements may include (but are not limited to) any one of (or a combination of) the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Corporation or one of its Subsidiaries shall have the right to require the participant (or the participant's personal representative or beneficiary, as the case may be) to pay or provide for payment of the amount of any taxes which the Corporation or one of its Subsidiaries may be required or permitted to withhold with respect to such award event or payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Corporation or one of its Subsidiaries shall have the right to deduct from any amount otherwise payable in cash (whether related to the award or otherwise) to the participant (or the participant's personal representative or beneficiary, as the case may be) the amount of any taxes which the Corporation or one of its Subsidiaries may be required or permitted to withhold with respect to such award event or payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)In any case where a tax is required to be withheld in connection with the delivery of shares of Common Stock under this Plan, the Administrator may in its sole discretion (subject to Section 8.1) require or grant (either at the time of the award or thereafter) to the participant the right to elect, pursuant to such rules and subject to such conditions as the Administrator may establish, that the Corporation reduce the number of shares to be delivered by (or otherwise reacquire) the appropriate number of shares, valued in a consistent manner at their fair market value or at the sales price in accordance with authorized procedures for cashless exercises, necessary to satisfy the applicable withholding obligation on exercise, vesting or payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.6 *Effective Date, Termination and Suspension, Amendments.***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.6.1 *Effective Date***. This Plan is effective as of February 10, 2016, the date of its approval by the Board (the "**Effective Date**"). This Plan shall be submitted for and subject to stockholder approval no later than twelve months after the Effective Date. Unless earlier terminated by the Board and subject to any extension that may be approved by stockholders, this Plan shall terminate at the close of business on March 12, 2035. After the termination of this Plan either upon such stated termination date or its earlier termination by the Board, no additional awards may be granted

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under this Plan, but previously granted awards (and the authority of the Administrator with respect thereto, including the authority to amend such awards) shall remain outstanding in accordance with their applicable terms and conditions and the terms and conditions of this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.6.2 *Board Authorization***. The Board may, at any time, terminate or, from time to time, amend, modify or suspend this Plan, in whole or in part. No awards may be granted during any period that the Board suspends this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.6.3 *Stockholder Approval***. To the extent then required by applicable law, or deemed necessary or advisable by the Board, any amendment to this Plan shall be subject to stockholder approval.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.6.4 *Amendments to Awards***. Without limiting any other express authority of the Administrator under (but subject to) the express limits of this Plan, the Administrator by agreement or resolution may waive conditions of or limitations on awards to participants that the Administrator in the prior exercise of its discretion has imposed, without the consent of a participant, and (subject to the requirements of Sections 3.2 and 8.6.5) may make other changes to the terms and conditions of awards. Any amendment or other action that would constitute a repricing of an award is subject to the no-repricing provisions of Section 3.3.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.6.5 *Limitations on Amendments to Plan and Awards***. No amendment, suspension or termination of this Plan or amendment of any outstanding award agreement shall, without written consent of the participant, affect in any manner materially adverse to the participant any rights or benefits of the participant or obligations of the Corporation under any award granted under this Plan prior to the effective date of such change. Changes, settlements and other actions contemplated by Section 7 shall not be deemed to constitute changes or amendments for purposes of this Section 8.6.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.7 *Privileges of Stock Ownership***. Except as otherwise expressly authorized by the Administrator, a participant shall not be entitled to any privilege of stock ownership as to any shares of Common Stock not actually delivered to and held of record by the participant. Except as expressly required by Section 7.1 or otherwise expressly provided by the Administrator, no adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.8 *Governing Law; Severability.***

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.8.1 *Choice of Law***. This Plan, the awards, all documents evidencing awards and all other related documents shall be governed by, and construed in accordance with the laws of the State of Delaware, notwithstanding any Delaware or other conflict of law provision to the contrary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.8.2 *Severability***. If a court of competent jurisdiction holds any provision invalid and unenforceable, the remaining provisions of this Plan shall continue in effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.9 *Captions***. Captions and headings are given to the sections and subsections of this Plan solely as a convenience to facilitate reference.

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Such headings shall not be deemed in any way material or relevant to the construction or interpretation of this Plan or any provision thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.10 *Stock-Based Awards in Substitution for Stock Options or Awards Granted by Other Corporation***. Awards may be granted to Eligible Persons in substitution for or in connection with an assumption of employee stock options, SARs, restricted stock or other stock-based awards granted by other entities to persons who are or who will become Eligible Persons in respect of the Corporation or one of its Subsidiaries, in connection with a distribution, merger or other reorganization by or with the granting entity or an affiliated entity, or the acquisition by the Corporation or one of its Subsidiaries, directly or indirectly, of all or a substantial part of the stock or assets of the employing entity. The awards so granted need not comply with other specific terms of this Plan, provided the awards reflect adjustments giving effect to the assumption or substitution consistent with any conversion applicable to the common stock (or the securities otherwise subject to the award) in the transaction and any change in the issuer of the security. Any shares that are delivered and any awards that are granted by, or become obligations of, the Corporation, as a result of the assumption by the Corporation of, or in substitution for, outstanding awards previously granted or assumed by an acquired company (or previously granted or assumed by a predecessor employer (or direct or indirect parent thereof) in the case of persons that become employed by the Corporation or one of its Subsidiaries in connection with a business or asset acquisition or similar transaction) shall not be counted against the Share Limit or other limits on the number of shares available for issuance under this Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.11 *Non-Exclusivity of Plan***. Nothing in this Plan shall limit or be deemed to limit the authority of the Board or the Administrator to grant awards or authorize any other compensation, with or without reference to the Common Stock, under any other plan or authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.12 *No Corporate Action Restriction***. The existence of this Plan, the award agreements and the awards granted hereunder shall not limit, affect, or restrict in any way the right or power of the Corporation or any Subsidiary (or any of their respective shareholders, boards of directors or committees thereof (or any subcommittees), as the case may be) to make or authorize: (a) any adjustment, recapitalization, reorganization or other change in the capital structure or business of the Corporation or any Subsidiary, (b) any merger, amalgamation, consolidation or change in the ownership of the Corporation or any Subsidiary, (c) any issue of bonds, debentures, capital, preferred or prior preference stock ahead of or affecting the capital stock (or the rights thereof) of the Corporation or any Subsidiary, (d) any dissolution or liquidation of the Corporation or any Subsidiary, (e) any sale or transfer of all or any part of the assets or business of the Corporation or any Subsidiary, (f) any other award, grant, or payment of incentives or other compensation under any other plan or authority (or any other action with respect to any benefit, incentive or compensation), or (g) any other corporate act or proceeding by the Corporation or any Subsidiary. No participant, beneficiary or any other person shall have any claim under any award or award agreement against any member of the Board or the Administrator, or the Corporation or any employees, officers or agents of the Corporation or any Subsidiary, as a result of any such action. Awards need not be structured so as to be deductible for tax purposes.

4917-9199-5662.3

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.13 *Other Company Benefit and Compensation Programs***. Payments and other benefits received by a participant under an award made pursuant to this Plan shall not be deemed a part of a participant's compensation for purposes of the determination of benefits under any other employee welfare or benefit plans or arrangements, if any, provided by the Corporation or any Subsidiary, except where the Administrator expressly otherwise provides or authorizes in writing. Awards under this Plan may be made in addition to, in combination with, as alternatives to or in payment of grants, awards or commitments under any other plans, arrangements or authority of the Corporation or its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.14 *Clawback Policy***. The awards granted under this Plan are subject to the terms of the Corporation's recoupment, clawback or similar policy as it may be in effect from time to time, as well as any similar provisions of applicable law, any of which could in certain circumstances require repayment or forfeiture of awards or any shares of Common Stock or other cash or property received with respect to the awards (including any value received from a disposition of the shares acquired upon payment of the awards).

4917-9199-5662.3

## Exhibit 31.1

**EXHIBIT 31.1** 

**CERTIFICATIONS** 

I, Benito Minicucci, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Alaska Air Group, Inc. for the period ended June 30, 2025;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

August 7, 2025

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| | |
|:---|:---|
| By | /s/ BENITO MINICUCCI |
| | **Benito Minicucci** |
| | *President and Chief Executive Officer* |

---

## Exhibit 31.2

**EXHIBIT 31.2** 

**CERTIFICATIONS** 

I, Shane R. Tackett, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Alaska Air Group, Inc. for the period ended June 30, 2025;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and we have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

August 7, 2025

---

| | |
|:---|:---|
| By | /s/ SHANE R. TACKETT |
| | **Shane R. Tackett** |
| | *Executive Vice President/Finance and Chief Financial Officer* |

---

## Exhibit 32.1

**EXHIBIT 32.1** 

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906** 

**OF THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Quarterly Report of Alaska Air Group, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Benito Minicucci, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 7, 2025

---

| | |
|:---|:---|
| By | /s/ BENITO MINICUCCI |
| | **Benito Minicucci** |
| | *Chief Executive Officer* |

---

## Exhibit 32.2

**EXHIBIT 32.2** 

**CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906** 

**OF THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Quarterly Report of Alaska Air Group, Inc. (the "Company") on Form 10-Q for the period ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Shane R. Tackett, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

August 7, 2025

---

| | |
|:---|:---|
| By | /s/ SHANE R. TACKETT |
| | **Shane R. Tackett** |
| | *Executive Vice President/Finance and Chief Financial Officer* |

---

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