SEATTLE--(BUSINESS WIRE)--Aug. 8, 2001--Alaska Airlines (NYSE:ALK) and the Air Line Pilots Association jointly announced today that they have reached tentative agreement to implement an across-the-board pay increase of 11.05 percent retroactive to June 1, followed by a 5 percent increase in 2002 and 4 percent increases in 2003 and 2004.

In addition, the tentative agreement extends the contract between the carrier and its 1,453 pilots by two years, to April 30, 2005.

The tentative agreement, which was affirmatively endorsed late Tuesday by ALPA's master executive council, now goes to pilots for ratification. ALPA plans to hold informational meetings with pilots in Seattle, Los Angeles and Anchorage the week of August 20. Voting will be completed by August 30, with results announced the following day.

The agreement was an outgrowth of the talks between Alaska and ALPA over rates of pay for the airline's new Boeing 737-900 aircraft. In May 2001, a neutral arbitrator ruled that pilots be paid an 11.05 percent increase over the current rate of pay, with an additional 5 percent in 2002, for flying the -900. For operational efficiency and internal equity reasons, Alaska had sought an across-the-board increase to maintain its long-standing practice of paying all pilots a common rate for the MD80 and Boeing 737 type aircraft.

"The introduction of the 737-900 raised issues for both the pilots and the Company. We are pleased that through our collaborative efforts we have reached resolutions on many of these issues through this mid-term contract adjustment," said Captain John Sluys, Master Executive Council Chairman for the Alaska Pilot Group.

Said Alaska President Bill Ayer, "The arbitrator's decision left all of us feeling like an opportunity had been lost, so we quietly went back to the table to see if we could produce an outcome everybody felt good about. We think we've achieved that, because it maintains the common rate that has worked so well for us over the years and it ensures that our pilots are competitively compensated relative to our position in the industry." Above all, he said, the agreement, if ratified, will allow the airline to focus on meeting the challenges ahead.

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