FOR IMMEDIATE RELEASE May 13, 2005=20
ALASKA AIRLINES CONTRACTS WITH MENZIES AVIATION=20
FOR SEATTLE RAMP SERVICES=20
SEATTLE =97 As part of a continuing cost-management initiative =
to
secure the=20
airline=92s future, Alaska Airlines has contracted with Menzies Aviation
to=20
provide ramp services at Seattle-Tacoma International Airport.=20
Effective immediately, the move means the loss of 472 ramp
service positions=20
in Seattle held by company employees. Ramp services include loading and=20
unloading baggage, and guiding aircraft to and from airport gates.=20
Alaska Airlines currently contracts with outside companies to
provide ramp=20
services in 41 of the 56 cities it serves. The decision to work with a
service=20
provider in Seattle is projected to save the airline more than $13
million=20
annually.=20
=93A decision of this kind, impacting people who have served =
this
company well,=20
is extremely difficult,=94 Alaska=92s CEO Bill Ayer said. =93But the =
ongoing
turmoil=20
in the airline industry, coupled with high fuel prices and pressure from
low-cost carriers, puts us in a position where we must continue to find
ways to=20
reduce the cost of running our airline.=20
=93Our success working with providers in other cities gives us
confidence that=20
we can continue moving Seattle customers=92 bags reliably while reducing
our=20
operating costs significantly,=94 Ayer said.=20
The decision came after a lengthy evaluation process in which
Alaska Airlines=20
considered numerous options for saving money while improving the
efficiency of=20
the airline=92s ramp services. In addition to requesting proposals from
outside=20
providers, the airline conducted talks over a period of 20 months with
the=20
International Association of Machinists and Aerospace Workers (IAM) to
discuss=20
contract changes focused on achieving a more market-competitive rate for
delivering these services to customers. =93Unfortunately, we were unable
to=20
achieve a contract approaching the savings available from service
providers,=94=20
said Ed White, Alaska=92s vice president of ground operations.=20
=93To ease the transition for affected employees, we are working
with the IAM to=20
offer a more lucrative severance package than that specified in the
current=20
contract,=94 White said. In line with the severance offered to =
management,
maintenance and fleet service employees last year, this package would
include=20
two weeks of base pay for each year of service; a cash bonus of $3,000
to=20
$15,000 based on length of service; one year of company-paid health care
coverage; and travel benefits for the employee and eligible dependents;
in=20
addition to a nine-week extension of current wages and benefits, as
required by=20
law. The airline also will provide information on outplacement
assistance,=20
career counseling, retraining resources and opportunities with other
local=20
employers.=20
Employees impacted by the Seattle decision will have the option
to receive=20
full company severance while applying for jobs with the new service
provider.=20
Still under negotiation with the IAM is the contract covering
more than 450=20
ramp service, air freight and supply agents in the state of Alaska;
nearly 140=20
air freight and supply agents in Seattle; and 13 supply agents in Los
Angeles,=20
Oakland, Phoenix, Portland and San Francisco. The airline plans to
participate=20
in mediated sessions with the union this summer focused on reaching an=20
agreement with this bargaining unit.=20
Menzies Aviation is a global provider of ground handling
services to more than=20
500 airline customers at some of the world=92s busiest airports. The
company=20
provides ramp services for Alaska Airlines in Los Angeles, Portland, San
Francisco, San Jose and at all Mexican airports the airline serves.=20
This report may contain forward-looking statements that are
intended to be=20
subject to the safe harbor protection provided by Section 27A of the
Securities=20
Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
These=20
statements relate to future events or our future financial performance
and=20
involve known and unknown risks and uncertainties that may cause our
actual=20
results or performance to be materially different from those indicated
by any=20
forward-looking statements. In some cases, you can identify
forward-looking=20
statements by terminology such as =93forecast,=94 =93may,=94 =93will,=94 =
=93could,=94
=93should,=94=20
=93expect,=94 =93plan,=94 =93believe,=94 =93potential=94 or other =
similar words
indicating=20
future events or contingencies. Some of the things that could cause our
actual=20
results to differ from our expectations are: the competitive environment
and=20
other trends in our industry; changes in our operating costs including
fuel,=20
which can be volatile; our ability to meet our cost-reduction goals;
labor=20
disputes; economic conditions; our reliance on automated systems;
increases in=20
government taxes and fees; actual or threatened terrorist attacks,
global=20
instability and potential U.S. military actions or activities; insurance
costs;=20
changes in laws and regulations; liability and other claims asserted
against=20
us; operational disruptions; compliance with financial covenants; our
ability=20
to attract and retain qualified personnel; third-party vendors and
partners;=20
continuing operating losses; our significant indebtedness; and
downgrades of=20
our credit ratings and the availability of financing. For a discussion
of these=20
and other risk factors, see Item 7 of the company=92s Annual Report for
the year=20
ended Dec. 31, 2004, on Form 10-K. All of the forward-looking statements
are=20
qualified in their entirety by reference to the risk factors discussed
therein.=20
These risk factors may not be exhaustive. We operate in a continually
changing=20
business environment, and new risk=20
factors emerge from time to time. Management cannot predict such new
risk=20
factors, nor can it assess the impact, if any, of such new risk factors
on our=20
business or events described in any forward-looking statements. We
disclaim any=20
obligation to publicly update or revise any forward-looking statements
after=20
the date of this report to conform them to actual results.=20
Alaska and sister carrier, Horizon Air, together serve more than
80 cities=20
through an expansive network throughout Alaska, the Lower 48, Canada and
Mexico. For reservations visit alaskaair.com. For more news and
information,=20
visit the Alaska Airlines newsroom on the Internet at=20
http://newsroom.alaskaair.com <http://newsroom.alaskaair.com/> . zy?
=20