Good morning. My name is Christie, and I will be your conference Operator today. At this time, I would like to welcome everyone to the Alaska Air Fourth Quarter and Full Year 2009 Earnings Conference Call. Today’s call is being recorded and will be accessible for future playback at www.alaskaair.com. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. I would now like to turn the call over to Alaska Air Group’s Managing Director of Investor Relations, Shannon Albert.

Thanks, Christie. Hello, everyone. And thank you for joining us for Alaska Air Group’s fourth quarter and year-end 2009 earnings call. During our call today Alaska Air Group’s CEO, Bill Ayer, will provide a company overview; CFO, Glenn Johnson will talk about Air Group’s financial position; and a President of our two operating subsidiary. Brad Tilden and Jeff Pinneo will comment on the financial and operational performance and future initiatives of Alaska and Horizon. Other members of the senior management team are also present to help answer your questions. Today’s call will include forward-looking statements that may differ materially from actual results. Additional information on risk factors that could affect our business can be found in our periodic SEC filings available on our website. Our presentation includes some non-GAAP financial measures and we have provided a reconciliation between the most directly comparable GAAP and non-GAAP measures in our earnings release. This morning, Alaska Air Group reported a fourth quarter GAAP profit of $24.1 million. Excluding the impact of mark-to-market adjustments related to our fuel hedge portfolio, Air Group reported an adjusted net profit of $4.4 million or $0.12 per share, compared to a First Call mean estimate of $0.32 per share. This compares to last year’s adjusted profit of $16.4 million or $0.45 per share. Again, excluding unusual items, Air Group reported a full year profit of $88.7 million or $2.45 per share versus a profit of $4.4 million or $0.12 per share in 2008. Additional information about expected capacity changes, unit costs, fuel hedge positions, capital expenditures and fleet count can be found in our investor update included in our Form 8-K and available on our website at alaskaair.com. I will now turn the call over to Bill.

Thanks, Shannon. And good morning, everyone. We posted a modest fourth quarter profit and a full year result that is among the best in the industry. 2009 marks Alaska Air Group’s sixth consecutive year of adjusted profits and although we’re not yet where we need to be, we’re making great strides in spite of weak demand and volatile oil prices. The past 12 months have certainly been a challenging time but we also see plenty of opportunity. And that’s why we’re focused on controlling what we can even in the face of substantial external forces. During 2009, our key initiative was to optimize revenue. We reduced and redeployed capacity to better match demand and the new markets we entered are performing well. Both Alaska and Horizon had a strong year operationally thanks to our people. Alaska led the 10 largest carriers in on-time performance in seven of 11 months and we expect that to be eight out of 12 when the December numbers come out. I might add that if Horizon were reporting to DOT they would have led the industry for the year. Our customers enjoyed select travel experiences in 2009 as evidenced by our internal surveys and by Alaska’s number one ranking in customer service by J.D. Power for the second on a row. During the year we reached agreements with several of our labor groups including Alaska’s pilots, mechanics and ramp employees, Horizon’s dispatchers and flight attendance at Alaska and Horizon. Those agreements provide for improve productivity and a common gain sharing formula in which the majority of Air Group employees now participate. As is appropriate, our people share in the results when the company does well. For the year, Alaska and Horizon employees earned $76 million. We’re working together more than ever and having employees aligned…

Thanks, Bill. Good morning, everybody. As Shannon said, Air Group earned a fourth quarter 2009 adjusted net profit of $4.4 million versus a $16.4 million adjusted net profit in Q4 2008 and a full year adjusted net profit of $88.7 million. That means our full year adjusted result equates to a pre-tax margin of 4.4% and return on invested capital of 6% at the Air Group level. Our quarterly results did fall short of First Call mean estimate by $0.20. That was driven primarily by our Alaska Airline subsidiary’s non-fuel cost being $10 million higher than the midpoint of our most recent guidance. There were four main drivers for that increase. First, final adjustments to the incentive pay accruals. Second, higher than expected employee medical costs. Third, we wrote-off some costs associated with certain discontinued capital projects. And finally, higher costs associated with environmental remediation settlements, legal costs and winter operations. I would note that to the extent that these costs have future impact, we have incorporated them into our guidance. So for the fourth quarter, for the first time this year, we showed a decline in our year-over-year pre-tax profits. There were three main components to that decline. First, a $61 million increase in non-fuel operating costs, as in earlier quarters, this was driven by the increase in Alaska’s pension expense, a dramatic increase in incentive pay at both subsidiaries and higher pilot costs at Alaska Airlines. Second, economic fuel costs were $25 million lower this year than last. I would note that this year-over-year decline in fuel cost is the smallest we’ve seen in any quarter of the year. And third, Air Group revenues were up $19 million or 2.3% ahead of last year. That reflects the easier comps and is also the first quarter of the year…

Thanks, Glenn. And good morning, everyone. As Bill and Glenn have said, we’re wrapping up what was quite a good year for Alaska Airlines. I’ll take you through some the numbers but first I’d like to thank the 9,000 people who produced these results and our leaders who have been working hard on our transformation for many years now. We’re thrilled to be celebrating this performance with PBP and profit sharing payouts that are easily the best we’ve had in over a decade. For the quarter, Alaska Airlines reported an adjusted pre-tax profit of $8.9 million, compared to a profit of $23.8 million in 2008. For the full year, our profit was $145.9 million versus $25.2 million in 2008. The 2009 figure represents a pre-tax margin of 4.9%, which compares to a margin of slightly less than 1% in 2008. We have a good story with revenues but I would like to start with costs as they need our urgent attention. We ended the year with CASM ex-fuel of $8.26, up 10% from the prior year on the 4.4% decline in capacity and 2% over our initial guidance of $8.1. The reason are the ones we mentioned already, a $45 million increase in pensions, a $46 million increase in incentive payments, a deal with our pilots that cost $23 million, the fact that we didn’t sell four airplanes as planned and contract extensions for three other groups. But even though we can explain the increase, it’s disheartening to see costs go up after so much hard work over the last five years and we’re going to turn this trend around. We know that our future is dependent on being able to offer low fares and to offer low fares we have to have low costs and we have to do…

Thanks, Brad. And good day, everybody. Horizon posted an adjusted pre-tax profit of $2.3 million for the quarter, compared to a profit of $3.2 million in 2008. For the full year, our $7.7 million adjusted profit marks a significant improvement over last year’s $10.4 million loss and while we’re certainly pleased to return to full year profitability our 1.2% adjusted pre-tax margin falls well short of the return on capital goals we’re focused on and committed to achieving. 2009 was a year of major change for Horizon with the retiming of our fleet transition plan, further reducing and reallocating capacity, decreasing personnel and transitioning many functions to shared services with Alaska. One thing that remained consistent was the outstanding effort and dedication our people displayed in serving our customers throughout the year. As Bill mentioned, when the final tally is in, we believe that Horizon’s 86.1% performance will translate to a number one on time ranking among all main land U.S. Operators for 2009. This result is the product of their dedication and great teamwork and I simply can’t thank them enough. For the quarter, our unit cost excluding fuel and transition charges increased 6.6%, on 4.6% capacity growth. Key drivers were the new flight attendant contract and inclusion of all non-union employees in the PBP plan which resulted in $3.8 million of additional expense during the quarter. Since last year’s fourth quarter, we reduced our workforce by over 190 employees or 5.5%, which when combined with our 4.2% increase in passenger boardings, resulted in a 10.2% improvements in passengers per FTE. Regarding our fleet, we took delivery of three Q-400s during the quarter, which will be utilized as replacement aircraft with no net additions in flying. We continue to actively market three CRJ-700 aircraft to offset these deliveries. Although…

Thanks, Jeff. So all-in-all we’re pleased with the past year especially considering all the challenges. We’re continuing to improve our ability to make changes and sustain those changes. And we intend to apply what we’ve learned to improve our performance in 2010. And with that, we’ll open it up to questions.

Christine, (inaudible).

(Operator Instructions) First question comes from Bill Greene with Morgan Stanley.

Yeah. Hi, there. I’m wondering if you could talk a little about your target ROIC. If you think about how you’re going to get to that 10% threshold, what are some of the drivers? Is it a margin expansion story, are you going to have to reduce the capital base dramatically? How do you think about getting there?

Thanks, Bill. This is Glenn. I think about that in a couple different ways. First of all, we do have kind of this excess level of cash that we built up this year to provide a cushion against the economic environment that we are seeing and so to the extent that we can either pay down debt with that cash that we’ve changed the formula, certainly we need to produce better net income also as part of that equation. And we have some of the capital really both sides that is not fully deployed at this point in time, I think we talked about that in the past for on the Alaska side, for example, you’ll see that we are down about 8 -- 10 of an hour in terms of utilization across the fleet and so there is the capability to put more utilization out there with no additional invested capital and produce results with that, provided that the demand is there for it.

Okay. And when you think about the strategies you deployed in 2009, obviously you were quite successful in spite of the economic downturn. How unique do you think these strategies are? Could they be applied elsewhere in the industry or is it sort of something that’s more unique to what Alaska does and where you are?

This is Bill. Bill, I think, why, the one of the biggest things obviously in ‘09 was the network effort that we did and overall reducing capacity which anybody can do, obviously. But then importantly, figuring out where we can redeploy that excess capacity for better revenue, better profitability. And so we have a loyal -- a relatively large base in Seattle, in the Pacific Northwest, a base of frequent fliers that like our product and service and as we go to new places, particularly from this base, from Seattle in particular is what we did in ‘09, those folks move and so even in the face of a declining overall demand picture, we’ve been successful in moving market share with these new routes. So I think that’s been probably the single biggest thing in ‘09 that led to these results.

So I don’t want to apology but it sounds like a lost that stuff is something you could replicate across others. It’s not something that’s wholly unique to your geography?

Yeah, Bill. I think, this is Brad. I think we are big believes that the most important thing the industry can do to help improve its profitability is get capacity right. So in general industry capacity does need to be aligned with demand. Alaska did have some unique opportunities in ‘09 as we took delivery of the 737, 800s with task capability and as we lost two competitors in Hawaii, we really grew our Hawaii business and we also added some flying into the mid continent and Transcons destinations that we weren’t in before. So, I don’t, and maybe that what we did is, and I think as you know, we really brought down our capacity in southern Cal and the Bay Area, Arizona, Nevada, Mexico. So I’m not sure that redeployment is a strategy that could be done everywhere because in total capacity does need to be brought down to be in line with demand.

Yeah. I was just basically getting out, if you put your strategy on others, would it work and therefore, maybe M&A is a decent way to get your returns higher if you can actually -- that’s what I was trying getting at, trying to get you to say but, well?

Nice try.

Your next question comes from Gary Chase with Barclays Capital.

Good morning, everybody.

Good morning, Gary.

Hi, Gary.

Brad, when -- couple things I wanted to follow up on, I guess first, just quickly, you said yields would be offsetting to the load factor gains that you’re showing, at least in terms of book load factors. I’m just curious, I mean, if you look at that book load factor number you’re showing, it’s definitely in contrast to what others were doing. So I’m just curious why it was that you decided to run the aggressive promotions when others are talking to the fact that they’re deciding to do less of that and in fact their book loads are down. You just not getting the close-ins that maybe some of the others are getting? Could you just elaborate a little bit more on why that was?

Absolutely, Gary. We’ll ask Andrew Harrison to do that for us.

Hi, Gary. You know, one of the things is seasonality and Q1 is always a quarter that we actually drop in traffic, in fact, our load factors in January and February are very low 70% levels and so in December what we decided to do was we knew we had plenty of room on those airplanes so we decided to do early a very aggressive, $50, $75, $100 fare sale and we saw bookings increase Gary employee. Then we turned that off and as we rolled in, going into January and February, we continued to see our traffic build upon the basis that we’d done. So overall we’re very pleased with the traffic that we brought in. As you mentioned, our yield is somewhat offsetting those load factors but at the end of the day we also have new ancillary revenue coming in, in the first quarter as well.

Gary, I’d like to jump on. I don’t think we’re really seeing core weakness. As we said in the prepared remarks, our advance -- our booking curve is pushing out. The last 12 weeks we look at it, our average year-over-year increase in bookings has been 15% and there were two weeks that were particularly strong, 32% and 42% when we did this very aggressive fare sale but we are seeing decent strength in the volumes. And it hard to say exactly what you’re seeing but I do think part of our reality in 2010 might be that part of this volume comes at lower prices and that’s not a bad position for us, high load factor for our company and great value for customers.

But, I guess, I mean, what I’m driving at is, I think, others are seeing that year-on-year gain and you suggested that RASM gains would be pretty muted. If you believe that there was a structural shift in the network that you implemented, I would think you would be able to sustain that and build on it as the industry rebounds. So I’m just -- I’m trying to get my arms around whether or not your markets happen to behave a lot better in the downturn than others or whether there’s something that’s incrementally happening with Alaska that means you’re not participating in some of the upside that others seem to be seeing.

Yeah. Then the other thing is that, as we are reluctant to talk a lot about RASMs until they’re kind of in the book and so you may -- there may be some natural conservatism or a little bit of we don’t really know what the prices for this first -- the prices yet for this first quarter traffic.

Okay. And then, you know, Brad, you said something that I wanted to pick up on as well. You said, one of the reasons that the yields may be offsetting may be a function of the bag fees that you’ve implemented, which bags the question, you take a look at what’s going on with Southwest and I think you know we’ve asked this a number of times in the past whether or not they’re actually adding to total revenue. No doubt they’re adding to other revenue but I’m curious for your perspective and based on the way you said that, do you think these are significantly additive to overall revenue or is it just moving it around on the P&L from passenger to other?

Hi, Gary. This is Steve Jarvis. When we look at bag fees, we actually think about it first and foremost in terms of customer value. If you look at the economics of it does float straight to the bottom line unlike other things, like attempts at increases in fare, I mean, this is something we see brightly on the bottom line. And so we do believe it has been incremental and we also believe that we’re providing a great value to customers. We did not follow the industry in raising that bag fee recently. Our first bag fee remains $15. I tell you we’re evaluating increasing it for agent assisted at the ticket counter, leaving it at $15 for self service. ] But what we’ve done uniquely in terms of delivering customer value behind that bag fee. One, leaving it at $15, unlike other carriers, we will interline and connect that bag obviously to the customer’s final destination and then we stand behind it was a very unique baggage service guarantee, I believe the only in the industry. So I guess the answer to your question is we do believe it’s incremental and additive. You look at our margins and it’s hard to believe you could ever shift enough share or yield to make up for the $47 million we saw straight to the bottom line in first bag fees in 2009. But we also believe we’re providing a good value to customers and that’s why we didn’t raise it. We want to stake out a real value position for our customers and we think we’re doing that.

And Gary again, our RASM performance was very good compared to the industry, down 3 versus the industry down 11. And also, I think in our markets you wouldn’t see the strength in bookings that we’ve seen for the last 12 weeks if a lot of folks were moving away from us because of the bag fee.

Okay. Thanks, guys.

Your next question comes from Mike Linenberg with Banc of America/Merrill Lynch.

Hey, everybody. Good morning.

Good morning, Mike.

Hey, Mike.

Just two questions here. Glenn, when you were talking about the defined benefit pension plans and you may have said this and I may have missed it. What are you modeling in for pension expense if 2010 and what is the anticipated cash contribution?

Let’s have (inaudible) answer the expense piece of it but the cash contribution, if we continue our historical practice of funding service cost which is our current intention would be a $50 million contribution.

Okay. So…

Yeah. Hi, Mike. (inaudible). On the expense side we’re modeling retirement expense to be down $27 million.

Okay. So it would be down 27. What was it then as a base, what was it in 2009?

It was 93.

Okay. Okay. That’s helpful there.

And remember, Mike, that’s across the PBP or the pension plan, the DB plans, but offsetting with some higher 401-K expenses as a result of the movement of people out of the DB plans.

Oh! I see. So when you do your retirement expense, that’s both DB and DC.

That’s everything.

Okay. That is helpful. And then did you also say, Glenn, did you also say there was going to be a potential savings by changing around something to do with the service cost or length of service, did I get that?

No. I think my point there was that we’ve made good progress in terms of getting the plans close to new entrants. We still have people who participate in the plans who have a long tail, so to speak in the plans and over the next year or so we’ll be evaluating what we can do to make sure that the plans are well set up across all of our retirement options to provide retirement security for employees but ensure that we don’t have too much volatility or risk from the company’s perspective. So nothing specific to report on that, just that we continue to look at the DB plans to determine how we can best structure those over the long-term.

Okay. That actually you just -- you sparked my follow-up which was you indicated that you’ve closed the DB plans to new entrants now. I know you did that with the pilots and I presume each of the recent contract agreements that have been put into place and I know there’s been a you slew of them. Did you -- you achieved that objective as well, is that the proper interpretation?

Actually, we started in 2003, management, each of the other groups were closed prior to this and the pilots were the last group, so we achieved that with the agreement that we reached with the pilots this year.

Okay. Good. Like you said, it’s a long tail, but it -- overtime will get become less of a liability. Okay. Very good. Thank you.

Thanks, Mike.

Your next question comes from Helane Becker with Jesup & Lamont.

Good morning, everybody. Thank you very much for taking my question. Brad, I think you were commenting that the Hawaiian markets were under or were not doing as well as some of the other markets because of the add in capacity. Have you thought about rejiggering that, pulling some of that capacity out and putting it into other markets that might be more receptive?

Hi, Helane. This is Andrew. And…

Hi, Andrew.

We’ve been very happy with our Hawaii markets. I think we’re up about 68% in capacity in Q4. But we are serving out of the Pacific Northwest and the state of Alaska, we feel good about our markets and the islands and as you may be aware, that we’ve started a Bay Area growth there. At the end of the day, we continue to watch them but we’re very happy with where we have capacity right now for our Hawaii franchise.

Okay. And then can you just say what Mexico is going to be like in the first and second quarter on a year-on-year basis?

As far as?

Capacity. Andrew Harrison Capacity? Yeah. We -- let me just see here real quick.

Because I know you took capacity out and then you added capacity back, so can you just remind us where you are?

So what we did was we took out about 38% capacity when the situation got bad with H1N1 and all that sort of stuff. And we kept that through the summer and the fall and we came back to full capacity in the winter and then but just recently we’ve done a marginal cut of capacity there. So the fourth quarter was down about 14% for Mexico and right now we’re continuing to project pre-swine flu cuts in 2010 but we continue to look at Mexico and as Brad mentioned, the traffic is there but the yields are very, very soft.

Okay. Thank you very much.

Thanks, Helane.

Your next question comes from Dan McKenzie with Next Generation Equity.

Hey. Good morning. Thanks, guys. My understanding is that Delta has exclusivity of Alaska’s feed over the Pacific and Delta has even said this is the case. But this is the airline industry so nothing evidently is ever easy and AMR of course is challenging me on this. So just for the fun of it I tried to book an Alaska flight from Beijing in Tokyo from Seattle to see if I could be fed on a Delta flight but was unable. So doesn’t look like Alaska’s customers can feed through to Delta later this summer which leads me to believe Alaska is probably leaving some revenues on the table here. So, I guess, first, can you verify what the exclusivity is or isn’t and when can I fly Alaska to Asia?

Wow, Dan. You know, first of all, I think what we need to say is that these contracts are thick and complicated and there are lots of provisions in them and I think as you know, we had domestic alliance arrangements with Northwest, Delta, American and Continental and now due to a couple different things we have contracts with American and Delta. And we don’t comment on specific provisions but I would just tell you that there are lots of details in these agreements. In terms of being able to fly on Alaska to Beijing, the way we think about these deals, that’s a level of complexity that we don’t aspire to offer our customers. In terms of the international itineraries we really want them to be able to travel from Beijing to (inaudible) or Yakima or [Ketchikem] and so they’re picking up code on our segments but we’re not trying to represent ourselves as holding up those itineraries for our customers. We think that in terms of our niche and what we do well and kind of an attention on simplicity, that’s the part of the market that we want to be in here. And I guess, the other thing I would just say while we’re talking about it is a huge aspect of these plans is the frequent flier side of things and we’re really happy to our customers get to accrue and redeem miles on American and Delta and we’re happy that Delta and American’s customers get to do that on

Dan, this is Bill. We’re really focused on the customer aspects of these co-shared marketing agreements. We really want it to work for our customers. As we look around the industry, we see a little too much of slap the code on the flight and start booking traffic without sometimes a close enough examination of does it really work for the customer. So we’re spending times with both of our major partners here, Delta and American, looking at it from a customer’s perspective and making sure from the booking right on through to picking up your bag at the final destination that these things are really adding value for people and closing seams as we call it in the relationship between the two.

Yeah. I appreciate the response and the answer, I understand that. Just out of curiosity, if sometime down the road you change your thought process on this, do you have the IT capability to connect to Delta to offer these flights and the reason I ask that is it seems like the IT consultants are pretty good at the cutovers as we’ve seen at some other airlines?

Yeah. I don’t actually know the answer to that, Dan. I guess I would tell you that it really isn’t our strategy today so we haven’t spent a lot of energy developing that capacity. It would be worth thinking through the value of those international itineraries compared to the value that we might lift for a Seattle to [Ketchikem] segment. And there is a lot of complexity that you take on, we believe.

Understood. Okay. Well, thanks a lot. I appreciate that.

Yeah.

Your next question comes from Kevin Crissey with UBS.

Thanks, guys. My question actually has been withdrawn but I’ll just thank you for spending so much attention on the return on invested capital and actually calculating it, I’m not convinced that many others have and I’ll probably follow up to make sure I’m calculating it the same way as you are after the call? Thank you.

Thanks, Kevin. We’ve all got that stamped on our forehead around here. 10% ROIC we’re not there yet obviously, but we’re going to get there, I mean, making it prominent and talking about it in every budget review, every, certainly on the call, we’re going to keep talking about it and it’s really important. That’s how you make things happen.

Now that I am on here why don’t I follow that up then with in your target, your target dollar figure falls. I’m going to go back and read the transcript on it. I assume you’re setting a higher benchmark in return on invested capital is one of those bench marks within your target, is that right?

Are you referring now to the PBP program?

Yeah.

Okay. So, yeah, the -- I think what I said in the script is that at a 10% ROIC, we pay out about 15% in terms of employee incentive. So in the annual targets that the Board is setting, we clearly didn’t achieve the 10% ROIC this year with the target payout because we’re in the process of building up to the 10% ROIC as Bill said, that’s our long-term objective here.

So the target would be raised as we perform up to the 10% level and that’s that calculation.

So it’s not that your dollar -- your dollar figure is going to get harder and harder to obtain is partly what I’m getting at I guess. The $50 million is off of an easier target than the $35 million would be.

That’s right. The dollar target for 2010 is higher than the dollar target in 2009.

Okay.

These are relative terms. We’ll build a foundation here and the targets will be achievable, hopefully. The intent is that on average this thing ought to pay at target. The plan on a fairly consistent basis, you can never guarantee that, but that’s the idea. The Board sets the targets accordingly.

Terrific.

It’s that whole cycle of we’ve got to be able to return the 10% ROIC to shareholders. We want to pay 5% target under the PBP to employees and we want to buy and deploy more airplanes to enhance the schedule utility for our customers and it all works together.

Measuring it’s the first step and I applaud you for doing that.

(Operator Instructions). Your next question comes from Steve O’Hara with Sidoti & Company. Steve O’Hara: I was hoping if you could quickly touch on your success in Bellingham and how that’s going versus Allegiant there and also pressure on the Hawaiian market with some other capacity moving in and I apologize if you’ve already covered this stuff.

This is Andrew, Steve. Well, I suppose Bellingham, there’s Bellingham, Vegas and there’s Bellingham, Seattle. Bellingham Seattle is a very important feeder market into our network. To your point, we started Bellingham to Vegas where we run very, very high load factors and many folks like to come over the Canadian border and fly out of Bellingham so we’ve been happy with our expectations there and how that has performed and with our Hawaii markets, I think of top of mind, there’s actually been some reductions by other carriers out of the Pacific Northwest as it relates to the Hawaii markets as we have added. Steve O’Hara: Okay. Great. Thank you very much.

There are no further questions at this time. Presenters, I hand the conference back over to you for any comments or closing remarks.

Thanks again to the analysts participating on today’s call for your questions. This is Caroline Boren, I’m Managing Director of Corporate Communications. At this time we would like to open up the call to any questions from journalists participating. Christie, would you please remind our callers for the procedure for asking questions?

(Operator Instructions).

Sounds like we do not have a lot of takers.

Are you there, Christie? Yeah, ma’am. I am. You have a question from Megan Kuhn with Flight International.

Hello, Megan. Are you there? ` Yes. Good morning. I wanted to get the latest status on Wi-Fi roll-out for the fleet. I know that last year there was talk of trying to get this to make it -- finalize a decision by the end of ‘09 for fleet-wide rollout in 2010. Was wondering when a decision is likely and is 2010 fleet-wide rollout still the goal or what’s going on?

Hi, Megan. This is Steve Jarvis. We are still working towards a 2010 deployment of the fleet. The update on that, since the last call, we mentioned last time that we’ve been evaluating both options, the satellite option and the air to ground option from air cell. Between last quarter’s call and this one, we have concluded a successful test on our 700 we learned a lot about operating a system, about customer satisfaction and a lot about uptake from customers at care just price points and stage lengths so we’re actually evaluating both options with all of that learning now. It impacts our decisions on capital we want to invest, how much risk we want to take and routes that are important to fly the system on. What we do know is customers want it. They told us they want it. They showed us that they want it when we’ve flown it. We are committed to deploying the fleet an and working on a decision currently. I can tell you that it’s our plan to deploy especially the 800 fleet for the longer haul and trans con business routes in 2010.

So in terms of the fleet-wide for both the 800s and 700s, still both fleet types for 2010?

We’re working on -- obviously we need to make a decision on our partner and then we’re working on the schedule. We will prioritize the 800s so our hope is to have that fleet done in 2010. We would like to have the entire fleet done but at this point in time, the decision needs to come first and then we’ll start working as fast as we can to get aircraft deployed. And the speed of that deployment also plays into this decision as well, how much out of service time and all of the impacts on the airplanes of the deployment itself. So can’t promise you the whole fleet in 2010 but that’s our goal.

Okay. Thank you.

Again, to ask a question, please press star one on your telephone key pad. There are no further questions at this time.

Okay. Thanks everybody for joining us and we will talk to you next quarter. Take care.

Thank you for participating in today’s conference call. This call will be available for replay beginning at 2:30 p.m. Eastern Time through 11:59 p.m. Eastern Standard Time on February 28, 2010. The conference ID number for the replay is 38145247. Again, the conference ID number for the replay is 38145247. The number to dial for the replay is 1-800-642-1687 or 1-706-645-9291. Also, the call will be accessible for future playback at www.alaskaair.com. You may now disconnect.