Alaska Airlines

1
Alaska Airlines
2
Alaska Airlines Background

• 75 Years of Service
• Avg. Flight of 1,051 mi.
• Primary Hub of SEA-TAC International
• Services 25 Million Passengers a Year
• Employees 14,710 Full Time
• Citizens of Alaska Fly 4.5 times more than US
  Avg.

3
Airline Industry

• Mature Stage
• 1990-1993 Gulf War
• Caused decline in global economy
• Fuel prices begin to rise
• Many airlines begin to file for bankruptcy
• In short-term, senior executives need to focus on
• Cost reductions both fixed and variable

4
Industry KSFs
5
Our Strategy

• Exit the Market
• Plan MA with Air Canada
• Largest domestic and international airline from
• Canada-Europe
• Canada-Pacific
• Canada-Caribbean/Central American
• Canada-South America
• Averages 1,370 flights/day
• 33 million passengers

6
Partner Selection

• Fundamental Issue
• What airline can help build a sustainable
  competitive advantage?
• The merger should enable a carrier to
• Offer a broader, deeper set of services to its
  customers
• Access an expanded customer base
• Realize significant efficiencies and economies of
  scale

7
Airline Merger Integration

• Establishing Fleet Synergy
• Merger creates competitive advantage by
  synchronizing
• Pilot Training
• Crew Scheduling
• Maintenance Integration
• Inventory Rationalization

8
Airline Merger Integration
9
Merger Integration Team Structure
10
Pulling it All Together

• Secure a good merger partner
• Offers sustainable competitive advantage
• Take advantage of anti-trust rules
• Helps to mitigate regulatory risk in short-term
• Labor will oppose mergers that affect pay
• Create new rules and regulations
• Focus on customers perception
• Create a single face to customer in first 100 days

11
Air Canada

• Competitive Landscape
• Largest domestic and international airline
• Canada-Europe
• Canada-Pacific
• Canada-Caribbean/Central American
• Canada-South America
• Averages 1,370 flights/day
• 33 million passengers

12
Route Synergy
13
Fleet

• Boeing
• Large 777
• 350 Seats
• Range of 9,000 miles
• Medium 767
• 225 Seats
• Range of 3,400 miles
• Small 737
• Range of 2,300 miles

14
Core Competencies
15
Economic Value Added
16
Alaska Valuation
17
3 Year Financials
18
Conclusion

• After researching possible MA
• Our strategy will create value by
• 1
• 2
• 3

19
Any Questions