Good morning, my name is Brooke and I'll be your conference operator today. At this time I would like to welcome everyone to the Alaska Air Group Third Quarter 2010 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 speaker's remarks, there will be a question-and-answer session for analysts and journalists. (Operator Instructions). Thank you. I will now turn the call over to Alaska Air Group's Managing Director of Investor Relations, Shannon Albert.

Thanks, Brooke. Hello, everyone and thank you for joining us for Alaska Air Group's third quarter 2010 earnings call. Today Alaska Air Group's CEO, Bill Ayer, Alaska Airlines President, Brad Tilden and Air Group CFO, Brandon Pedersen will share their thoughts on the quarter, our financial results, the operating environment and our future initiatives. 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 reconciliation between the most directly comparable GAAP and non-GAAP measures in our earnings release. This morning, Alaska Air Group reported a third quarter GAAP net profit of $122.4 million. Excluding the impact of mark-to-market adjustments in connection with our fuel hedge portfolio as well as fleet transition and restructuring cost at Horizon. Air Group reported an adjusted net profit of $118.1 million or $3.21 per share. This compares to a first call mean estimate of $3.11 per share and to last year’s adjusted net profit of $83 million or $2.33 per share. Again excluding unusual items Air Group reported a year-to-date profit of $215.2 million or $5.87 per share compared to $84.1 million or $2.32 per share for the first nine months of 2009. Additional information about expected capacity changes, unit cost 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 alaskair.com. With that I will turn the call over to Bill.

Thanks Shannon and good morning everyone. This quarter’s results represent Alaska Air Group’s best adjusted quarterly profit in our history displacing last quarter’s record. Our financial performance was driven by increased traffic, stable yields and good cost management through improved productivity and lower overhead and our employees continue to provide customers with a travel experience which is among the best in the industry. I am proud and honored to work with such dedicated people and the credit for our quarterly results really belongs to the 12,000 employees of the Alaska and Horizon. Turning to the operation, both companies had a very good summer and Alaska’s was particularly noteworthy. In July and August Alaska finished first among the top 10 U.S. carriers with more than 88% of flights arriving on time and in September where industry rankings are not yet available. More than 90% of our flights arrived on time. Unofficially extending our number one rank among the top 10 airlines to 17 over the last 18 months and every month in 2010. In addition we are heading our 20 minute bag guarantee over 90% of the time in our top 14 cities. I want to spend a minute updating you and the changes we’re making at horizon. One of the most important components of our plan is to accelerate the move to an all Q400 fleet and we now believe we can achieve that in 2011. This will allow horizon to capture the same trends of efficiencies that Alaska realized when it transitioned out of the MD80s. During the third quarter we announced that horizon will move to an all capacity purchase model in 2011 further optimizing Horizons route system to benefit Air Group. We reached a tentative agreement with Horizon pilots on a new contract and we are optimistic…

Thanks Bill and hello everyone. As Shannon said Air Group reported an adjusted net profit of $118.1 million compared to an $83 million net profit last year, an improvement of more than $35 million after tax and $55 million on a pre-tax basis. Not only is the absolute profit a record, these results translate to a record 17.9% adjusted pre-tax margin for Air Group which brings our trailing 12 months return on invested capital to 9.2%. With nearly 10 months behind us, we are optimistic that we will reach our 10% ROIC goal this year or get darn close absent a sudden change in the revenue environment or a major spike in oil prices. This is a significant accomplishment and one that all Alaska and Horizon employees should be proud of. The $55 million improvement in our adjusted pre-tax result was mainly due to a $100 million increase in revenues. Consolidated passenger unit revenues fared well increasing 3.7% on a 6.1% increase in capacity. The revenue improvement was offset by $31 million increase in economic fuel cost and a $13 million increase in non-fuel operating expenses. Absolute non-fuel costs increased just 2% on a 6% increasing capacity resulting in a 4% decline in consolidated CASM X fuel. We are quite pleased with our cost performance this year. Our challenge for 2011 is to not let 2010 solid profit distract us from our focus on driving unit cost down by improving productivity and keeping overhead in check. As we look ahead, we are concerned about rising fuel prices. To mitigate volatility in this area we continue to maintain one of the best fuel hedged positions in the industry and our young fuel efficient fleet gives us a natural hedge. In fact, a recent Wall Street journal article likened our fleet to…

Thanks Brandon and good morning everyone. This was a great quarter for Alaska Airlines. We reported an adjusted pre-tax profit of $173 million compared to a profit $118.7 million in the third quarter of 2009. In year-to-date our adjusted pre tax profit is $328 million which represents a margin of 12.8% and a 140% improvement over last year. We have had a goal of a 10% pre-tax margin for many years now. And if we are able to produce a margin between 1.5% and 2% in the fourth, will hit our goal. These results are a huge credit to the people of Alaska Airlines, who have been working very hard for several years to make fundamental changes in our business. It's very rewarding to see the company executing so well on so many fronts. Alaska's mainline passenger revenue increased by 90 million or 11.6% for the quarter. The increase was driven by a 7.3% increase in capacity and 11.2% increase in traffic. So our load factor continued to show nice year-over-year improvement. Our yield for passenger mile was flat. But given the significant increase in average day’s linked and strong 2009 comps we’re very pleased with the absolute unit revenues we are seeing. Nearly everyone one of our regions posted unit revenue increases. We saw significant strength in Mexico, Hawaii and in our flying between the Pacific North West including Vancouver and Southern California, Arizona and Nevada. Our Mexico services benefiting from the shutdown of Mexico on the Airlines and to take advantage of the void we have been out new redeye service from Sacramento and San Jose to Guadalajara that will start mid December pending regulatory approvals and the second trip between LAX and Guadalajara that is scheduled to begin in February. And we increased frequency in the LAX…

Thanks Brad and before we get to the Q&A, I want to tell the analyst and investors on the call that Shannon Alberts has accepted a new position in our corporate affairs group so this is her last earnings call and I want to thank Shannon for her outstanding work over the last 5 years in the IR role. Chris Barry who currently serves as our Director of Accounting and Financial Reporting and Shannon’s main backup has been promoted to Managing Director of Investor Relations. I want to wish both Shannon and Chris the best in their new roles and so Brook I think we are now ready for questions.

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

Hey there. I am wondering if I could talk a little bit about Horizon. Some of your peers in the past have shed their regional partners. AMR is looking at it and you are going through this restructuring. I know in the past you said that this is an integral part of Air Group but does some of this restructuring at least open the possibility, you consider that or no, that's sort of, not even on the table in any way?

Yeah Bill, this is Bill. No, we are going through a lot of work at Horizon because we think it’s a great part of Air Group and can become even more significant and more profitable and contribute in a bigger way. So our intent is to continue to keep it as a wholly owned subsidiary and create more value to the actions that we are taking.

And the capacity purchase arrangement on it is really just for internal purposes then?

Hey Bill this is Glenn. Yeah the move to CPA is really just coming in line with the model that's common across the industry as you know. It will make it simpler I think across Air Group. It puts all the pricing and scheduled decisions at Alaska where they should be and we are really just focusing on Horizon than on producing safe reliable low cost ASMs on half of the group.

Brandon just a quick question on pensions, I know it’s early but do you have a sense for kind of what those will look like in 2011 in terms of expense and funding?

Yeah, I think given the decline in interest rates and what we see now in terms of investment performance we’re probably looking at a $20 million to $25 million increase in pension expense next year, I think as you know we don’t exactly figure that out until the end of the year but that’s kind of what we are seeing right now based on the information that we have.

Does it change the funding?

Does it change funding (inaudible) that one.

It doesn’t change our funding requirements, the funding rules are a little bit different than the GAAP rules and so we actually are taking advantage of some airline pension relief that we received a few years ago and so we don't have any funding requirements next year but we continue to make contributions. We made $45 million this year.

Your next question comes form Hunter Keay with Stifel Nicolaus.

Sort of verifying, did you guys say mainline ASMs up 89% in 2011 year-over-year?

We did.

Okay. And sounds like you are, I guess, extending operating leases or taking out new operating leases on three or four aircrafts. So that’s going to be incremental for the previous fleet plan right?

Yes, so we had three new 800 schedules for delivery, that stays the same and then we had three lease returns. We are extending those 2011 lease returns into 2012.

Okay. I guess it seems like, help me reconcile there seems like a lot of growth and I know you said that some of its going to be sort of annualization or something you’ll achieve out in 2010 but where are those planes going? Are they going to be for new routes you have haven't announced yet and I know Bill you mentioned some growth initiatives in your prepared remarks. So are these frequencies based or how should we think about where these plans are going to be going?

Hi, Hunter this is Andrew. As it relates to the 8% to 9% growth, on average we have about 100 or so airplanes flying at any point in time so every point of growth is about one airplane. So if you round it to about eight airplanes 5.5 of those will be going to Hawaii and Mexico, the majority to Hawaii and then the other 2.5 aircrafts that are just spread around our system, We annualized the new St. Louis. So big picture really this is all the markets we’ve announced this year and carrying them over to next year plus the new Hawaii in the first quarter is basically makes up that entire growth. So that airplanes work mostly in Hawaii and Mexico and we’ve been very pleased with the performance of those regions.

Okay thanks Andrew I appreciate that and maybe Bill one for you, I was going to ask you about this anyway and you mentioned it in your script. Sort of as you think about the next leg for your company particularly as it pertains to your stock price I would say, these initiatives your talking about and you are not prepared to give us much color on them right now as we stand. But can you maybe help us sort think about how these initiatives would rank. I don’t want to oversimplify but maybe on the scale of one to 10, with regard to sort of calculated risk, are we talking about something that's, something maybe way out of the box here for you guys or is it kind of more sort of organic growth into new market. Or we maybe thinking about some sort of strategic asset acquisitions or M&A. What kind of calculated risks are we talking about in the context of some of these growth initiatives that you referenced in your remarks?

Well as I said, we are really just starting to turn our attention to this subject in a more serious way to look at opportunities and alternatives. But I mean historically what we've done and its worked very well is this incremental approach to building of strong point of sale presence in the Pacific Northwest and by the way that's an important role for Horizon to make sure we've got the smaller cities covered as well in the Pacific Northwest and building from that base. So the guiding principal here is improving, continue to improve long term shareholder value and take measured actions that we can do that. So beyond that I think it would be premature to say anything, we are just really starting to get into this where we are talking to the Board on a continuing basis now about looking at and to the uses of cash question as well that you have all brought up appropriately so. And so we are looking at it and we are in a great position, that is what we have said when we laid out this 2010 plan back seven years ago. We said we are not going to grow the company until we can do it from a good profit foundation and we need to make sure that the results we are seeing now really are sustainable and we’ve only had a short period of time where we have been operating at this level. So we are not going to rash and rush into anything, but we do think that we are in a position to look at opportunities and as much as anybody in the industry well positioned to take advantage of some things if they are out there. So that’s more general than you probably wanted, but I think that’s where we are at the moment.

The next question comes from Jamie Baker with JPMorgan

On a consolidated basis, how much revenue do you believe comes through your numerous co-chairs with airlines outside of Alaska Air Group? In other words and this is purely hypothetical if American, Delta and everybody else were to stop feeding you revenue, how much lower would air group revenue be?

We have not historically disclosed that figure. One thing I can tell you is that interline volume has been about 15%, give or take a points for 20 years in this company. So interline has long time been a big part, in the old days it was just inteline ticketing and then it because co-chair and alliances, but that’s a general volume indication, I think what we have disclosed about these alliances.

And as a follow-up, whether your 15 partner agreements, today have changed in control provisions, for example and again I am just throwing this out. If Delta Airlines were to buy Alaska Air, now suggesting that’s likely one way or the other, but would that automatically sever the relationship that you have with American, with Qantas, with everybody else hypothetically?

Again I don’t believe that we’ve shared the details of what’s inside those co-chair agreements and they differ from airline to airline and they are complicated. So I think it’d be hard be to answer simply anyway.

Your next question comes from Duane Pfennigwerth with Raymond James.

Just wondering in terms of your ASM guidance for next year, did you give a consolidated number as well?

We did not give a consolidated number. The main line number is 8% to 9%. We are still finalizing the Horizon number.

I think for Horizon’s fleet next year it’s about flat to 90 down a point as where it’s looking right now, but it’s about it and it’s about 89% of our ASMs will be main line next year, the remaining 11 is the Horizon fleet.

So just doing the rough math using flat I think if 8 to 9 is main line, I think consolidated is probably just shy of that.

Okay and can you just give us an idea I mean it feels like an increase in growth expectations always relative to what we were thinking, one is it sort of increased growth relative to what you were thinking and two what is really driving that? I mean is it competitive displacement that you are seeing. What is driving the decision to grow faster next year?

So couple of things, number one, we have just seen opportunity this year and so really what we are doing is dialing up the utilization of their aircraft which we pulled down very significantly over this past cycle. And then really if you look at the growth, a lot of the Mexico growth is filing in voyage in some of our core markets where capacity is going away and then what we think here, I'm really to be honest is Hawaii and really we are growing Hawaii, annualizing year-over-year and again in the Bay area, in the Pacific Northwest and in San Diego and so that’s really where the growth is coming and the new revenue is coming and we have been very happy with the results today.

This is just annualizing everything that we have already announced and/or started and in terms of the fleet, there is really no change to the fleet with the exception of small extensions of three leased 400s.

Okay, just on the Horizon restructuring. Bottom line, is this is about saving cost or an ability to more tightly integrate that to reduce expense or is this about a top line opportunity you see in replacing brand flying with an Alaska brand?

You have really hit on all three pieces of it. It is absolutely about finding synergies between Alaska and Horizon; it's also about improving the efficiency of Horizon particularly through the fleet transitioning getting to the all key 400 fleet. So, I think there is a broad range of benefit that will come out of this business transformation plan that we have talked about and the goal is to get Horizon, the Horizon unit to the same level of return on invested capital as Alaska is now enjoying.

One other thing is that we have operated Horizon in a way that’s different from everyone else in the industry and so by putting Horizon on an all CPA basis, Horizon's P&L can look like the P&L of the other regionals around the country and so gives us a better comp to understand where we may or may not be competitive from a cost standpoint.

Your next question comes from Michael Linenberg with Deutsche Bank. Michael Linenberg – Deutsche Bank: Maybe this is a question for Andrew, just to follow up on some of the capacity. Andrew we think about, maybe a same store sales basis, you are going to be up 8 to 9% capacity in 2011. A lot of that is new, maybe all of it is new, if we look at on your current system is that flat is that down. What can you tell us about that?

As far as Michael big picture if you go through most of the rest of our regions, I look at the growth within those regions only at 2 or 3 points, so a fairly modest when you take into account news market and I suppose one of things that I sort of reflect on is really if you use Q4 as bit of a proxy, we are going to grow at about 9.5% and the majority of all of these new markets are in Q4. And we are very happy with what we are seeing as far as advances and yield and how that is starting to play out. Michael Linenberg – Deutsche Bank: Did you give us a feel for where RASM trends were heading through the December quarter I mean I see the advanced book loads and I see some of the information in the investor update, maybe I just skipped over it or didn’t hear it?

We don’t normally we give that, but what I would share is that we are very pleased. We see continuing strength in the advances. And you see December is down, 1.5 points, but from where we stand, we are very happy with the quality of traffic that’s coming onto our books for December. So we are very comfortable with the fourth quarter. Michael Linenberg – Deutsche Bank: December being down, how much of that is a function of maybe a booking curve, that’s becoming a bit more elongated because I feel like at least coming into this holiday period and I realize this is anecdotally, but I do hear from co-workers and others that people seem to be booking a lot earlier because of the upward movement and the fair structure. I mean is that partly what’s going on here is that what we are seeing?

I think for Alaska Airlines specifically, upward price increases in the fare structures haven’t been that acute. I think what you are seeing a little bit is confidence as we get closer in. Last year, different story, weak economy, we were happy to sell seats, but I think this year what you are seeing is we have a little bit more confidence in holding out and making sure we build good yields.

I might just jump in on this capacity question. There has been a lot of questions about it and a couple of things that we would say is one, we are very supportive of the industry effort to keep supply in line with demand. And if you look at our network, a lot of the margin improvement that people are talking to is a result of this. So if you look at over 2.5 years now ASMs that we put into southern Cal, the Bay area, Arizona, Nevada, Mexico, all of those efforts have been aligned capacity with demand. So to the extent Alaska has grown, it’s been, is a market like Mexico comes back or putting airplanes into Hawaii or even in the mid-continent regions, so that’s one comment. The second thing is I think while the industry, while we are very supportive of this industry effort to kind of keep capacity in check. I think we would all agree that while that happens industry wide, there might variances from airline to airline. If you look at Alaska’s history over 20 years now, our capacity growth has been almost three times the industry average growth rate and I am not signaling that that’s where we are headed, but I am signaling that this company has done a good job of finding good profitable places to put airplanes for a long, long time now. And that’s what we are talking about as we look at the five years.

Your next question comes from David McKenzie with Hudson Securities.

Just a couple of house cleaning questions. What impacted the liquidation of Mexicana have on overall unit revenues in the quarter?

We don’t probably get too specific, but I think it’s not only just Mexican but also the H1N1 with I think sort of May-June of last year. But our Mexican region was only extra 4.5% of our capacity in Q3. But it says very well.

We really just had one LA-Guadalajara and one LA-Mexico City that overlapped during the quarter. We are adding in now in the fourth quarter to take advantage of the Mexico cessation of operations, but with only two plus than 1% of our network with only two flights, it wouldn’t have much of an impact on system results.

Then the second house cleaning question just you know with respect to the aircraft deliveries that are coming next year, should we expect any lumpiness in labor expense just from training costs ramping up for the new planes?

I don’t think so. It’s three airplanes in the first quarter and then that’s basically it. I wouldn’t expect any lumpiness in training cost or anything like that. Certainly nothing at the level that would be visible on the consolidated P&L.

Got it and then finally just kind of more a broader question here. Bill given the economic uncertainty reference in your remarks and you role on the Seattle branch and the San Francisco fed, wondering if you can comment on how you are thinking about overall local business activity as it drives economic trends next year in the Seattle area?

I'm not sure I have got any great insights in that Dan, I think the Seattle area has faired better than much of the rest of the country because of the diversified nature of the industries here and housing has been a little bit better but we certainly have been impacted, no question about that. The biggest thing we talk to business is even our own corporate accounts is people I think there is just an uncertainty out there. The fundamentals maybe not that bad, but people are just uncertain about so many aspects of what's going on they are just being very, very cautious. And that in fact slows the recovery of the economy all by itself. So, Seattle is fairing okay through this but I wouldn't say that it’s outpacing anybody particularly and we are cautious because of that.

Got it, so in particular no business net inflows or new business activity just in terms of business is coming to Seattle but the standout in particular?

Yes.

The next question comes from Helane Becker with Dahlman Rose.

Andrew could you just, I think you said 4.5% of your capacity now is in Mexico and I think prior to H1N1 something like six, so with all the changes they were making over the next say six months in Hawaii and Mexico. Can you just update us on where that capacity falls?

Sure. So, for the summer we’re about 4.5 and then actually it will peak in the first quarter of 2011 and Mexico will represent about 8.5% of our capacity. One of the things Helane and in all of this is that you see that Guadalajara, Mexico City has but we have also eliminated the Seattle Cancun LA, which was a very long six hour flight. So that’s 12 hours of flying being replaced by more two to three hour late so overall our capacity for 2011 in Mexico will be up a point or two or something like that but not huge.

Okay and then are you seeing any shift from core days away from Mexico actually to Hawaii given what is going on there from a political stand point?

We struggle with that question all time Helane I think the problem is what is going on. Is that we have a very rough year last year with H1N1 in the economy and now with the strength coming back in Mexicana no longer flying. What we’re just seeing net is good strong Mexico demand.

The key to it Helane is what we’ve done everywhere in the system is we’ve gotten very nimble with capacity and quickly understanding what’s going on with demand matching capacity. And so we moved quickly and so Mexico up, Mexico down we take advantage of that or we can minimize the impact and put airplanes in other places and we have just been Andrew and Steve have been very quick with that it’s helped us a lot. So we spend more time looking at that we have capacity matched right and we do asking the question about demand.

Okay alright and then just in terms of looking at your overall root structure now and your earnings production. You really changed the seasonality of the airlines. So for being sort of break even first half to making money all year long. So we should consider that trend kind of continuing as we think ahead 2011 and so on.

Certainly the goal of what we are trying to do I don’t think you should necessarily conclude that the trend because there is too many things in the macro environment that we can’t control. But the idea behind all of the restructuring that we’ve done is to get out of the habit of creating a loss in the fourth quarter like you said in having this huge profit in the third and really spreading operating over the course of year so we can generate profit in all four quarters.

And the other thing I would add is that out of the Pacific Northwest, Hawaii is a good add for us and also some of the Mexico as a seasonal. Like Puerto Vallarta and the San Diego so we do continue in our seasons that are normally difficult for us to put that medal in the markets we think can do well for us.

Are there any other Central American markets that might make sense for you? From Seattle then?

It’s possible Helane, this is Brad but we don’t normally talk about that stuff in advance of announcing it.

Our next question comes from Steve O'Hara with Sidoti & Company Steve O'Hara - Sidoti & Company: You had mentioned the CapEx for next year, could you just or like an intro to it can you just give that one more time for me and that’s about all I had?

Our CapEx next year would be just over $300 million, if we are able to complete this deal to have 8 RJs leave the fleet next year and replace those on a one for one basis, with 8 Q400s that’s really a shift of CapEx out of 2012 and 2013 in the 2011. Steve O'Hara - Sidoti & Company: And that doesn’t get done can you give me a ballpark on that?

I forget exactly what the number is but I think it was probably more in the $150 million range.

Your next question comes from Kevin Crissey with UBS

Any thoughts on a legion as it regarding Bellingham and the competition you are seeing there and then maybe as it relates to Hawaii?

I think we have seen some good performance out of our own Bellingham to Las Vegas service that we are operating and that we are really excited about the new Honolulu service that we are going to start on January 7 from Bellingham. I think the realization for us has been that Bellingham in another self is a decent market but importantly the traffic is coming from north of the border and the lower mainland area of Vancouver, British Columbia is really where the majority of the traffic is going to come from for these flights. We are seeing that already on our Vegas flight and so credit to Allegiant for maybe recognizing that themselves but maybe credit to Alaska for recognizing it also and learning from Allegiant and I think we are excited about what lies ahead for us up in that market.

I guess it's not really a question on the capacity but it just seems like there's never an airline that grows. They always just annualize flying from the year before.

(Operator Instructions) Your next question comes from Glenn Engel with BoA/Merrill Lynch. Glenn Engel - BoA/Merrill Lynch: A few questions please. One, on Horizon margins seem to be declining for regional. So how do you, since an entirely internal company, how do you asses what their margins will be?

Glenn its Brandon. One other things, and you probably heard my comment a bit ago was to, by going in an LCPA model we wanted the Horizon P&L to look like other regionals and when we set the inter-company CPA rate we are going to try to do that in a way that is represented above the market. So the goal is to have market costs and market revenues between the two companies. Glenn Engel - BoA/Merrill Lynch: So the rate will be set on market cost as well even if Horizon’s are above or below that?

Yeah that’s the idea. Glenn Engel - BoA/Merrill Lynch: Second you mentioned a little bit on incentive what is the current incentive bonus plan now for 2010?

In terms of what our projected cost is for the whole year? Glenn Engel - BoA/Merrill Lynch: Yes.

So through nine months we had accrued on an Air Group basis I believe the number is $62 million and so we are on pace to about $82 million this year for incentive pay. Its been a very strong year, I think you are probably familiar with our performance based pay plan that has goals that are not only financial but operational in nature and the company really as two companies we are exceeding the operational and financial goals set by the board at the start of the year and so it’s a very good year from an incentive pay out basis. Glenn Engel - BoA/Merrill Lynch: Finally, can you talk about how well Transcon did in the third quarter into how well your business, however, your measure of business improve relative to the overall system?

This is Andrew, Glenn. We were very happy with Transcon performance. It actually performed on par with many of the regions during the summer. As you know, we only have one or two flights a day in the peak season so they perform very well. The other thing is a mix of traffic; summer is a big leisure time for us. So we carry a lot of leisure travelers versus may be more of the business focus outside of that. Glenn Engel - BoA/Merrill Lynch: And how much that business improved this year? Last year it was pretty depressed.

Glenn this is Joe. You are right about that. We don't, as Andrew mentioned, maybe carry as many corporate business travelers as a lot of other network airlines do but what we have carried has certainly increased over the last year. In fact most of our regions are seeing about a 30% increase in terms of managed corporate travel. Glenn Engel - BoA/Merrill Lynch: And do you have an estimate for what percent of your traffic you think is business?

I think on the managed corporate side it’s probably 10% or a little less than that.

The next question comes from Michael Derchin with CRT Capital Group.

One of the few airlines who actually has higher returns than you is Allegiant as you mentioned. I was wondering if you've looked at their model and are there any lessons that you could learn from them.

Mike, this is Joe again. One thing that they clearly do very well is merchandize on their website and one of the main things that they are merchandizing is vacation packages and car and hotel opportunities. So that's something that we are going to try and learn from. We are doing a little bit of that this year and our numbers here over the last month or so are increasing. We are going to put a lot of focus on that in 2011 and that is trying to evaluate whether that really is a good opportunity for us.

And how much of your Hawaii expansion is related to that type of opportunity.

Well clearly Hawaii is an entirely leisure market and with the point of sales strength that we have here on the West Coast we know folks who were going over there on vacation and so absolutely when we look at trying to build our hotel business Hawaii is the first source that we are going to look forward to build.

Your next question comes from Tom Banse with KUOW Radio Seattle.

Hi gentlemen, like you've seen here, in the Pacific Northwest, my hometown airline mentioned as an acquisition target, and even again this week, can you talk about how many real inquiries from other airlines have come in since say the United Continental merger, to have a conversation about merger or acquisition.

Hi Tom this is Bill. We don’t talk about that. What we do say about this whole topic though is its about shareholder value and what we want to do here is have a company that we think pursues strategies that optimize overtime value for shareholders and so as we talk about plans for the future and the whole universe of things we believe that the path that we are currently on, the development that we have had, the work that we have done over the last 7 years to really transform the company and first Alaska and now Horizon to build a more competitive business model, a lower cost company, a company that has greater customer value, that flies places, that the places that people want to go, that has a single fleet, a very fuel efficient fleet, all the things that we have been working on for so long, we think that now we are starting to see the results in terms of earnings and we think the path that we are on is the right one for shareholders. Being a public company, you have to say that if that were to change and we thought there was a better alternative available for shareholders. We would look at that alternative, but where we sit right now and particularly with this quarter’s record results were very encouraged that we are on the right path and we are going to keep at it.

And then just a completely big picture question, what accounts for the discipline of the airline industry that’s here and maintaining or avoiding fare wars and keeping a cap on supply. I mean how that really happened in the previous 10 or 15 years, but it really seems to be working this year?

You are right about the historical part of this which is the difficult thing in this part of the cycle as people start making money and then buy airplanes and then they have too many seats and fares go down and airline start losing money. I think part of it is the fact that you have got management teams in place that have been through this cycle a couple of times and people don’t want to replay the movie and so it’s encouraging and there is not guarantee that the industry continues to be disciplined this way, but that’s certainly the way it’s going right now and in fact the consolidation that has happened probably helps that, helps the discipline and it’s encouraging because this industry needs to be profitable, it’s a key part of the economy and the history is not a good one, as you know. So we are encouraged, we are certainly trying to do our part to be disciplined about everything we do and we are encouraged that the industry will be so as well and we will have a long period of profitability in the industry.

At this time there are no further questions. I will now turn the conference back to Bill Ayer for closing remarks.

Okay well let me once again congratulate all of Alaska Air Groups, both Alaska and Horizon are poised for a great third quarter and to our audience we like to thank you for joining us today. We look forward to talking with you again next quarter. Thanks very much and take care.