Good morning. My name is May, and I will be your conference operator today. At this time, I would like to welcome everyone to the Alaska Air Group's First Quarter 2014 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 for analyst and journalist. (Operator Instructions). Thank you. I would now like to turn the call over to Alaska Air Group's Managing Director of Accounting, Chris Berry. Sir, you may begin.

Thanks, May, and good morning, everyone. Thank you for joining us for our first quarter 2014 earnings call. On the call today, you will hear from our CEO, Brad Tilden; and our CFO, Brandon Pedersen; as they share some highlights from the first quarter and our outlook for the remainder of the year. Other members of our senior management team are also here to help answer your questions. Our comments today will include forward-looking statements regarding future expectations, which may differ significantly from actual results. Information on our Risk Factors that could affect our business can be found in our SEC filings available on our website. We will refer often to certain non-GAAP financial measures, such as adjusted earnings or unit costs excluding fuel. 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 first quarter GAAP net profit of $94 million. Excluding the impact of mark-to-market adjustments related to our fuel hedge portfolio, we reported a record adjusted net profit of $89 million compared to $44 million last year. On a per share basis the result translates to a $1.28 per diluted share versus $0.62 in the first quarter of 2013, and compares favorably to the first call consensus estimate of a $1.24 per share. Additional information about our unit cost expectations, capacity plans, capital expenditures, capital allocation, and other items can be found in our investor update included in our Form 8-K issued this morning and available on our website at alaskaair.com. And now I'll turn the call over to Brad.

Thanks, Chris, and good morning, everyone. Today marks another milestone for Alaska. It wasn't that many years ago that we created an objective of simply not losing money in the first quarter. Our business like a lot of other airlines have been very seasonal and unfortunately we had become used to digging the whole in the first quarter; it would have to dig our way out of in the second and third quarters. Today we posted a substantial profit for the first quarter; essentially double last year's number and the result that would be strong for any quarter. The majority of the improvement is due to strong demand across our system and the revenue enhancing initiatives such as the new credit card agreement and the increase in baggage and change fee that we put in place last year. Our pretax margin for the quarter was 11.8%, up 550 basis points from last year, and a 12-month trailing return on invested capital was 14.8%, which is roughly twice our cost of capital. This strong first quarter sets us up nicely for another good year. Our revenue performance was managed by good cost control. Our people once again did a great job running a safe and on time operation and they took excellent care of our customers. I want to take them for their above and beyond efforts to defend our franchise and produce these results. We're mindful of the growing capacity in Seattle specifically from one large carrier. We believe our competitor's actions are creating a surplus of capacity in many of the markets we serve, which we will be dealing with until supply and demand come back into balance, which is something that we do believe will happen. Alaska has many advantages which would help us in this battle. We…

Thanks, Brad, and good morning everybody. Air Group reported an adjusted net profit of $89 million compared to $44 million last year. Adjusted earnings per share more than doubled because of the growth in net income and a 3% reduction in diluted shares. Our trailing 12-month return on invested capitals grew to 14.8%, a 1.4 improvement over the 12-months ended Q1 of last year. Our ROIC figure is fully taxed and as Brad said, nearly double our weighted average cost to capital. We are creating substantial economic value for our owners and will continue to do so. On an adjusted pretax basis we reported a $144 million profit, which was $73 million better than last year's result. On a capacity increase of 4.6% total revenue climbed by $89 million or 8% non-fuel operating expenses increased $35 million or 5% and economic fuel expense was about flat. Our results also include $13 million in non-operating gain associated with the sale of an equity stake in an IFE provider and stock received in connection with America's bankruptcy. Looking at revenues we were pleased with the 1.7% improvement in PRASM that came despite the 7% increase in competitive capacity in our markets. Total PRASM grew by 3.1% reflecting the new bag and changed fee structure that went into effect last year and higher mileage planned revenue driven by a boost and economics from the affinity card agreement modified last year and higher total spend on the card. Generally speaking unit revenues are under pressure in markets where we see increased competitive capacity and the resulting in supply/demand imbalance. However, the scheduled changes we've made in other areas of the network, along with improvement in newer markets, have helped to offset that weakness. We also benefitted from traffic that came to us from other…

Go ahead, May.

(Operator Instructions) And our first question comes from the line of Hunter Keay.

Hey Brandon, I am at slide -- and by the way, thank you everybody for reporting in a Friday night and I had a ridiculous Thursday yesterday, its great move. The slide where you talked about, Jamie's conference, you guys showed $385 million of potential cash available to shareholders now showing $350 million and something has changed on it. Your CapEx is about $55 million, lower than it was on that slide. Your debt, even from inflows are $140 million to $170 million of payments. So two part question, Brandon. Your leverage is already below 40%; you said you do not want to free handle on that before. So why are you paying them more debt if you are going to be building equity, presumably hurting into this year and paying down more debt? You are probably going to have a two handle on that leverage unless you add debt and deploy back that to equity holders. So should we expect that $170 million of debt payment to actually swing and be an inflow of debt as you raise it to keep your leverage up?

Yeah. Good morning, Hunter. The chart was really just meant to illustrate debt payment; it did not reflect any expected increases in debt. We will like very likely borrow this year probably I do not know on a neighborhood of $100 million to $200 million. And then the $350 million of the chart, that is meant to be an approximation. I do not think that you should interpret anything different between the $350 million on that chart, which we booked up from First Call consensus, and the $385 million on the chart that I had it at JPMorgan conference. I think our point is to say we are generating a considerable amount of free cash flow and we intend to use that in a way that benefits our owners and the cash distribution opportunity for us is significant.

Okay. Yeah, that is totally fair. I just want to make sure that I am thinking about this properly in the sense that if you are going to be raising debt then and you are operating cash was is going to be higher. I think it is probably fair to assume that $350 million is a baseline minimum of that you guys fee comfortable committing to right now. And to that, and this is my last question, can you help us understand the mix of what it's going to be between dividend and repos? Thanks a lot.

Thank you very much.

Thanks Hunter. And I think it's probably perfectly good. But the big point they were all going to make with this chart is that, pensions are fully funded, we've spent hundreds and hundreds of million dollars over the last several years getting them to that point but they are fully funded, and debt is largely paid down, the company is in a net cash position. So as we have good cash flow from operations, the two opportunities are really investing in the fleet and returning capital to shareholders. (inaudible).

And your next question comes from the line of Savi Syth.

Couple of questions. Just you did good job of highlighting how you are going to approach the competitive situation. I was just wondering, you've had a history of competing fiercely and keeping your position in the Pacific Northwest, but we have not seen a competitor get to this level of market share from a seat perspective before. Are there -- is there a difference in competing against the position like that versus what you have seen historically?

And Savi, it's Brad. What do you mean by -- just say a little more about what you mean about seat perspective?

So it looks like maybe they will get to about the high teens percentage of seats by the end of this year out of Seattle. And in the past I think the bit largest competitor has maybe had 10% or 11% of seat share?

Yes.

And that's just kind of larger presence in competing with other competitor with that much of a greater presence?

Got you. Well, maybe I will start. And one of the things that I needed to say at some point in the call is, Andrew Harrison is actually out with this today. He and his wife gave birth to a baby boy yesterday morning. So in his place we have got Ben Munson, our Director of Capacity Planning and Miko Schneider Director of Revenue Management. But I know I may be starting this question. We'll ask Bennett in this case he wants to jump on and say something additional. And the third is the, this new capacity that they are overlapping directly with us, which is really the share of their capacity that we are concerned with. I guess what I -- are we concerned about it? Yeah, well, I think there is going to be more capacity in these markets and these markets need. As we have said in our prepared remarks, we are going to be dealing with that. And we have got a multipoint plan that covers our own network where we are flying, the timing of our flight, it covers alliances, it covers our loyalty program, distribution, we -- the whole gamut, our involvement with community advertising and so forth. So yeah, this is a very important sort of strategic area that the company is focusing on. And I will say my -- this is how capitalism in America works. I believe that we are going to get through this and I believe that this competition is going to make Air Group a stronger company. And we are looking forward -- we're looking forward to the next little bit. Ben, I might ask you to sort of jump in and just sort of comment a little bit on what you are seeing in terms of numbers in the marketplace.

Got it. That is helpful. And just a secondary question. Wondering how the E190 flying in Alaska is doing?

Q400.

Q400 I apologize.

That's the other airlines.

Good morning, Savy. This is Glenn Johnson.

Hey, Glenn.

So I'm the President of Horizon. And we did take Horizon up to the state of Alaska and we're flying a number of round trips between Anchorage and Fairbanks and then also one round trip seasonally between Anchorage and Kodiak. The objective of those airplanes was best matched capacity with demand and so we're able to increase the daily round trip frequencies in Anchorage Fairbanks to almost shuttle like pattern up to nine round trips a day. And so we're very, very pleased I think with the initial introduction, a lot of work going on we have both for Alaska and Horizon setting up for that. And from both a customer perspective and then the community perspective I think it's been very successful. And I could actually just tag on to one that speaks to the market economics and the introduction of the Q400 into the State of Alaska in March and both Kodiak and Anchorage Fairbanks has been really positive for the performance of both those markets.

Good. Thanks, Glenn.

And your next question comes from the line of John Godyn.

Brad, I wanted to follow up on what is going on with Delta. And I know that the team has done a tremendous job sort of in the face of this threat already. But when we think about -- well, I guess there are two parts to this question. First, if you could just talk about what inning you think we are in, in Delta's expansion. And second, as we think about the very long-term implications of what's going on here, to what extent, when we think about Alaska five years from now, is this going to change what you look like? And I guess what I mean is, we've heard that you are expanding from Seattle to some other cities. You mentioned that in your prepared remarks. I wonder are we ever going to see Alaska with a new hub outside of Seattle. Is there a point where we would have to revisit the long-term ASM growth rate that the company is capable of doing? I'm just curious what the very long-term implications of this threat might be as you see it.

John, good question. In terms of what of inning we're in, I don't think a lot, I don't think we're in a great position to say that. We're not in the last half of the game we know that. Even if we look at 2014, in terms of I sort of broke the market into three categories early, in terms to this group of markets where Delta's flying overlaps with us, 18 -- there have been out 96 flights for 2013 and 2014 and they're flying 18 of those today. So there is more service to come in the next two, three, four quarters than we have today. In terms of longer-term I think one of the things that served this company really well over the last 10 or 15 years is the industry has gone through all sorts of strides it's sort of keeping our head down and focusing on what we can control and doing that stuff well. And so as we're trying to emphasize that stuff in the script we do sort of have a basic belief that we operate well, we operate safely, if we operate on time, if we build the line and with our leadership team and our people and we all go out there and offer terrific service for the right fare, we think we're going to be okay. As you looked at what happened in 2003, 2004, 2005, 2006, this company came through that in great form. We've had a couple of big competitive onslaughts over the last 20 years and we've come through just fine and I'm very confident that we're going to come through this and as I said earlier come through this as a stronger company. In terms of how it plays out and what we look like three four, five years now I don't think there is a lot of return and sort of speculating and I will just point to a couple of reasons that there are now 42% or 43% of the company are transcontinental Hawaii we wouldn't been able to get either of those three years in advance. So there's not a lot of return in guessing where we're going to be but we're quite confident about where we're going to be.

In a world where the competitive threat continues to grow, can Seattle, as a main hub, sustain a 5% or so, like a mid-single digit ASM growth rate, are there enough accretive opportunities as you see it today?

Yes, again I don't think there is huge value and in trying to predict the future what I would say is that Alaska has grown at a rate that's considerably more rapid than the industry. We have grown may be two, two-and-a-half times the industry growth rate if we go back 10 or 12 years and that growth comes from underlying economic growth and from stimulating markets or stealing share in. We've done sum of all three and I'm confident about our prospects going forward.

And your next question comes from the line of Joe DeNardi.

Brad, on the CASM gap between you and the low-cost guys, it would appear, based on the guidance you've given relative to what they're providing, that the gap is going to continue to narrow. So I'm just wondering how that influences your growth strategy. If you get to a point where your cost structures are closer to one another, does that change the way you think about competing with them? May be you're a little bit more aggressive. Or should we think about that more as just a continued driver of margin expansion?

Hey Joe, it's Brandon, maybe I will take that one.

Sure.

Our folks have done an awesome job over the last 10 years reducing cost, it's been through a lot of hard work and a lot of different things, productivity has certainly played a huge part, the fleet changes have played a huge part and that is an initiative that has been really important to us as everyone on the call knows. It's done a lot to improve the advantage that we have over the network carriers and you're right, our costs are looking more like the low cost guide. In terms of what that means from a growth or competition standpoint or an opportunity standpoint, I think it does just continue to expand the number of places that we can fly too profitably and we might use Cancun as an example, we've filed an application of start flying to Cancun, it's a market we had been in before, we've seen some improvement in the revenue environment, but our costs are lower too and that makes Cancun a good opportunity now versus one that we had to access just a few years back, it's something that also strengthens our utility out of sale. Also lower cost do strategically remain really important to us and I think we've done a good job bringing those costs down.

Okay. And then, on the branding initiatives, Brandon, I know that's important to you. Can you just kind of update us on how that is going and may be how you are measuring the effectiveness, what type of metrics you are using?

Hey Joe, this is Joe Sprague from marketing. So maybe I will take that one.

Sure.

I would say the brand project is continuing at a major pace. We've got into this effort as a way to help attract even more customers and some of our growth markets. But as we get into this even further, I think obviously we have to take into account the current competitive situation. We do want the brand to be more compelling for new customers and new markets but we need to maintain the strong loyalty at core market customers as well. So I would just say we are kicking a major pace and as we continue to work through that in the next several months, one of the ways well sort of major success of that is penetration in new markets, but also sort keeping a strong loyalty core here on our core markets in the northwest.

And your next question comes from the line of Helane Becker.

Just two questions. One, with fuel prices being somewhat more stable, any thoughts to changing or modifying the hedge program?

Hey Helane, this is Mark Eliasen.

Hi, Mark.

We are looking at our hedging program and we did last year as you know made some substantial changes, we lowered the tenor and we're doing more out of the money hedging. We are going to take a strong look at it again this quarter and stay tuned. I don't have anything to announce right now, but we are always cognizant of what we want to do. We won't make major changes from the standpoint, we won't run away from our principles of treating hedging like insurance and it's something that we buy and hope we don't use because we hope fuel prices stay low and stay stable. So that's basically we don't have anything to report right now but we will be looking.

But Mark, may be to quantify it I think we have done this on other calls. We've gone from buying 3 years out by 18 months out and correct me if I am wrong and we have gone from buying half the money that's 20% out of the money?

That's right.

So our premium expense has gone up from what to what?

It's gone from about $60 million a year down to about $40 million; steps we have taken now and we are going forward that. We are looking at.

Hi, this is Brandon. One more clarification on the premium side Mark is right, through the P&L this year just because of the way we announced pretty obviously but in terms of the cash flow perspective if you look back at 2010 we were using $60 million, $70 million to buy option. This year we are going to spend about $10 million. So the amount spent on hedging has gone way, way, way down as to these changes we made in our approach.

That is awesome to know. Thank you. And then I just have one quick follow-up. I do know this, because I think you moved in Newark, because that day I flew home after seeing you guys a month or so ago, I went to a different terminal, right? I went to A instead of B. So can you just may be update us on the cost and where that flowed through the income statement, and if you have moved now all over the East Coast?

Helen, its Ben Minicucci. We did 13 moves to make in the first quarter 12 out of the 13 are complete. We have one more which is Boston to be accomplished in several weeks. The moves have done extremely well. I have to thank our airport folks, our IT folks, our CRE folks, our corporate real estate folks for doing a phenomenal job. Yes, we did move in New York and our cost rather one-time cost. The total cost of the moves are just shy of $5 million. But we'll see our recurring cost actually be lower because of the vendors we have put deals in with. So we're really looking forward with try new facilities in our new vendors.

And Helane this is Elaine on a line item basis, a lot of that is in the contracted service where we kind of double up on vendors during that move.

Okay. So when we think about that, that line item isn't going to stay right at that level because you had double costs in the first quarter that you don't have -- that 13% increase. Is that what you mean?

Well there was some of that but there is also -- that's where we put our flying; some of the regional flying outsource flying on SkyWest so that is ramped up as well. So that will be more of a permanent increase but yes there's a little bit of a blip in there for some of this, this vendor move in different station.

And your next question comes from the line of Duane Pfenningwerth.

Can you help us understand the potential impact of your code being removed from competitive overlapping flights? It feels like you have done a great job so far of managing through this OA capacity growth, which obviously is, as you have articulated, gets a little bit worse over the next couple of quarters. But correct me if I am wrong. Is the loss of code revenue new? And can you just help us think about, is that an incremental impact or how do we think about that?

Duane, I can take that one and we're seeing some slight impact with the Delta relationship. We have shown I think at the Investor Day about $200 million overall revenue exposure per year from Delta and I can say that our first quarter number was down about 5%. We're making a lot of that up with our other coach air relationships in particular with the new American in the first quarter revenues from that relationship were over 20% year-over-year.

That's helpful. Thank you. Just a housekeeping question. What was operating cash flow in the March quarter?

$212 million, I believe but let me check that. Just a second. $249 million.

Okay. Thank you.

$249 million, Duane.

Thanks, Brandon. And then, Brandon, just one more on the non-op line in Q2, obviously in the first quarter here you had some one-time or some found money. In the second quarter, how are you generating income on that line?

Yes, Duane, this is Mark Eliasen. And I can tell you that we still have some of the stock we got through that other than the bankruptcy to come through to Q2. We will see a little bit more of that and then it should pretty much over.

Your next question comes from the line of Glenn Engel. Glenn Engel - Bank of America/Merrill Lynch: A couple questions. One, what was the Easter hit to you in March? And I assume a boost in April. And, two, you mentioned something about 40%, I thought, competitive capacity from Delta. In which markets are we seeing in some of the other markets, besides Delta, what's competitive capacity looking like?

This is Miko Snyder from Revenue Management. From Easter shift from March to April, March had a hit of about $7 million.

Yes. And then Glenn I can take the capacity question. So we mentioned that Delta is trending upward in our markets but we're actually seeing really good capacity discipline from other carriers in the West Coast in particular from United, from Virgin and from Southwest making pretty material reductions in our network. Glenn Engel - Bank of America/Merrill Lynch: And the Alaska market itself to 48 states?

Alaskan market is actually just about flat year-over-year. we've got some additions coming from Delta but that's being offset by United has exited the Anchorage Seattle market and we're also a lot less capacity Anchorage San Francisco this year and Virgin that market and United has reduced as well. Glenn Engel - Bank of America/Merrill Lynch: And it seems like you've added a lot more destinations with not a lot of planes. So I assume that means fewer frequencies. So is there a change in strategy favoring breadth over depth?

So some of those additions in the six markets may be is what you're referencing from our Seattle hub. That's really a combination of incremental units year-over-year and also reductions that we've had in our network in markets that were underperforming.

Glenn, I think we are up three units for the year. that's not a change but I think we're up three airplanes year-over-year.

Yes, that's correct.

Yes. Glenn Engel - Bank of America/Merrill Lynch: And finally you're talking about returning $350 million in cash this year on that chart in the update, but you did only $50 million in the first quarter. Is this all going to be backend loaded or what held you up in the first quarter?

Hi Glenn, it's Brandon. No, the first quarter was low. What I can say though is that we feel really comfortable with the cash flow this year. we're going to have a really strong year. Sometimes if you look at in just three increments you get pinched into things like board meetings and how you restructure a share repurchase grid, when blackout periods are, etc, but we wouldn't have put that number out there in such a public way unless we're really comfortable with it. So what I can say is that we've been really good stewards of capital and we will keep our commitments.

And your next question comes from the line of Daniel McKenzie.

In general, we are spend on corporate travel that accelerated modestly heading towards quarter end and heading into the second year. and the GPTA is calling for a fixed percentage increase in spend for the second quarter. I'm wondering if you can comment whether Alaska is getting its fair share of that travel spend from business travelers just given some of the competitive dynamic that we're seeing.

And happy Friday, Dan. This is Joe again. Yes is the simple answer. We are getting our fair share. What's interesting with Seattle our route system is such that there's a number of places of in our route where we're not particularly well-suited for corporate travel but Seattle a definite exception to that. This is an area where we've always had strong utility accounts and it's unique because it's a -- for a relatively small city there is obviously a large base of corporate travel here. So we have had years of building up relationships there and have good agreements in place with all the top corporate accounts in town. And I would say they are performing for Alaska very similar to the GPTA numbers that referenced and our expectation is that we'll continue to address the year.

Very good. And then if I could go back to the earlier comment about strengthening Alaska's position in Seattle. I'm wondering if you can just help clarify what that means because it seems like you're obviously already strong in Seattle. So I'm just wondering where you -- what the right way to characterize it, where you might need to go to feel like you've got the strength that you need? Is it perhaps an enhanced code share with American that might help that? What are some leverage you control to make Alaska or to make Seattle where you'd like it to be?

Dan, its Brandon. Maybe I'll start with the first part, and then just in terms of future stuff Joe can chime in if I miss something. Our ads in Seattle are specifically designed to be pan Alaska, to be the carrier that operates in Seattle that goes to the most places that people who live in Seattle want to go to. And we've added cities to achieve that objective over the last few years, just out more in the recent quarter. In terms of our interaction with other code share partners, our strategy for a long time has been to have lots of partners that through those partnerships we can take our customers to more than 770 global destination as for the mileage redemption and for travel to other places, and we've got a great suite of partners right now. But that might evolve over the years as it has in the past.

And your next question comes from the line of Steve O'Hara. Steve O'Hara - Sidoti & Co: I guess I was just curious in terms of the competitive moves in Seattle and so forth, I mean, do you think this has just set the potential to kind of end capacity discipline as we know it? I mean, it seems like its benefited the industry quite a bit, but it almost seems like an arms race in some ways to where one carrier maybe thinks another one is getting a little too aggressive maybe they have to start kind of making their moves too. I mean, do you see it that way at all?

Steve, I mean, you guys are the analysts and I think it's probably a better question for guys to sort of opine on, but what I would say is it does -- I think one of the benefits of the last decade has been the consolidation and the control of capacity. And I do think that you see that nationally I think that's a real positive for the industry. And I think in Seattle, I think we there is going to be more capacity than we need, an extra little bit. But I do also believe that we have been around for a long time. Water sort of finds its level and so when you over bake it then it gets under baked. And so I think there might be some jostling around here in the next few quarters, but I guess I'm confident at the end of the day that the right level of capacity will exist and I'm also confident in the company's strengths particularly in the Seattle market. Steve O'Hara - Sidoti & Co: Okay. And then this is a follow up I guess did you talk about what you are seeing from the other competitors in Seattle as well, I mean, there is an increase you're talking about. Was that primarily just one carrier with that net of subtractions from others or what kind of actions you are seeing from the other carriers in Seattle?

I'm going to ask Ben Munson to chat a little bit about that, but I think it is fair to say that we are seeing more from Delta and we are seeing less from others but then Ben maybe he can provide more detail.

Yeah, Brad, that's exactly right. So just kind of looking forward maybe into the summer months, Delta capacity and Alaska market in Seattle be up 30%; we are actually seeing about an 8% reduction from other carriers in our markets.

Your next question comes from the line of Jamie Baker.

I thought I heard my name whispered there. I'm not sure what that's about. I would eco Hunter's commentary, it is nice to see you monopolize the reporting data same way that you monopolize double digit pretax margins in the first quarter. On to the question, I do agree that you can certain take the stage with other high quality industrial transports and stand shoulder to shoulder with most, if not all, of those companies. The only obvious disconnect that emerges relates to your earnings multiple or lack thereof. I'm not suggesting you change course, but in the event that you don't eventually rerate, if you continue to trade at a significant discount these are the high quality transports is there a plan B -- or actually let me ask you in other way. There is your multiple have a bearing on how you address capital deployment going forward or is that merely an output that doesn't influence your behavior?

Jamie, its Brandon. That's a hard question, but I will give it a shot. We have always lagged on a multiple basis and what we are focused on is just trying to do things right. We are trying to do things right from an operational perspective, from a customer perspective and from a shareholder perspective, and we are optimistic as folks will notice and we will get the multiple that we deserve particularly given our performance and the balance sheet strength that we bring. And that's why we have been talking for 12 or more months about this notion of being a high quality industrial. We really want the market to understand that this company, it's solid balance sheet, it's great financial profile. If you look back on to 2009, we have generated $3.5 billion of operating cash flow and we have invested more than $2 billion into the business. More than $1.3 billion of free cash flow, we have brought our debt down from an 81% debt to cap to a 32% debt to cap. Our pensions are fully funded when they didn't have to be at all and we have returned $440 million to shareholders. So as we go out on the road and we do these earnings calls and we talk to investors we are hopeful that our multiple will catch up with this company's actual performance.

Brandon, that's a great answer. One thing I might add is that at the moment we're buyers of the stock. So there is a silver lining for owners.

Your next question comes from the line of Kevin Crissey.

Hey guys, sorry to go back to Delta. Had three quick ones on this. Well the routes that they have now added competitive capacity were those more profitable than your system average and, therefore, we are kind of more attractive in that regard? That's the first part.

I don't think they are unique in any particular way, Kevin.

Okay. Would you expect those routes to remain profitable during this period for your guys?

Again, we'll ask Ben to say something, but we are not really in the business of giving future forecasts on route profitability, but I do think that some of these routes there's going to be more capacity than would be ideal.

And Kevin, it's Brandon. As you know we don't talk about specific market level profitability.

How about for them? Are they going to lose money on those routes?

You will have to ask them, Kevin. (Inaudible).

I know what I'm going to hear when I ask them, but okay. Thank you.

All right.

Thanks Kevin.

Your next question comes from the line of Michael Derchin.

I just wanted to ask you about your Switzerland strategy, alliance strategy and whether or not, looking longer-term, like 5 to 10 years out, and again, given -- assuming Delta does not continue, let's say, to be a major presence right in your home market. How do you go about considering looking at some of the other global alliances? Very specifically, a One World, which is the American, British Airways, clearly some of your issues you are having with Delta relates to you not wanting to drop relationships with these kind of carriers. So what is -- longer-term, can you talk about that Switzerland strategy versus going into a One World?

And Mike, this is Brad. It's a great question. Our thinking about these global alliances is that they were best when there was one carrier from each geography or from each country. Means our issue is that we are a U.S. domestic airline and we think that given that it makes a lot of sense for us to really occupy this position of being neutral with respect to the global alliances. We have to stand for something. There is got to -- we have to have a brand, it has to matter that we are Alaska Air Group, we got to have a vibrant mileage plan, all of those -- the royalty programs, all of those are things that helps raise demand or preference for our service and they help create their earnings that we are producing. So I think, Mike, we do not believe it would be good for us to sort of be the number two domestic airline inside a global alliance because I think you begin to lose your brand, you reason for being, I think you begin to lose the earnings capacity. So that is how we think about global alliances.

And your next question comes from the line of Mike Linenberg.

Hey, Brad, I want to go back to the point that you made earlier. You talk about the sort of the capacity increases and I apologize, this is a Delta question so I'm going to preempt it. But you indicated that the capacity that's going in is more than those markets need. But as you look out because I realize some of the positions are coming in the summer and so especially at this point, you can probably get a pretty early read on how the leisure bookings are starting to sort of build. I mean, are you seeing anything now? Is there really anything out there, I mean, pressure on fairs or at this point is it still too early?

Mike, I think it is probably early. We actually see a -- I think again, we are going to refrain from talking too much about the segment results too far in the future. But I would say it is pretty early. In the next little bit, business conditions actually look pretty good to us going into the spring and summer.

This is -- okay.

How far of a long term situation of just how much natural demand is there in a market in the city bear between point A and point B how may airplanes fleet should be in that market, it is kind of a high level longer term concern.

Okay. And then, just if we go back to the last year, I mean there was -- initially, there was kind of a bit of a build up, I mean, there were some additions like Delta but also, others as well. And so even though that we have that data I mean -- and I am sure you booked through it carefully. I mean, were you able overall to maintain your revenue premium? I mean, did you -- degradation that maybe what would have happened and maybe it just did not happened because the numbers seem to bore out otherwise?

Yeah, I can take that question, Mike. And I think what has been really good, whether it was last year or this year there is one thing we have been I think right about is really the diversifying the network and getting strong results kind of across the board. And what we have seen, we have this in 2013 and are experiencing this in 2014 as well, is when we do have competitive pressures in one area, we have had improvements in other regions to offset those.

Okay, great. And then, just lastly, if I could just squeeze personal question which is kind of following upon Hawaiian. The 13 airport moves that you had, I realize for some of them you did have access to the Delta Club. Were you able to preserve club access for all those moves and presumably it's with American I think?

And Mike this is Joe. Our agreement with Delta for the Sky Club reciprocal access remains in place. Obviously, with some of those gate moves, the geography at the airport no longer works. And so to the greatest degree possible in each case, and it varies by airport a little bit, we have tried to find another partner, another club room partner with which we can still offer access for our Alaska Airlines board room member. So I think mostly all the airports still has some sort of club room access in place where it hadn't it before.

Okay. Good, very good. Thank you.

Kim, maybe we have time for one more question.

Okay. Your final question comes from the line of Tom Vance.

Hi, everyone. I wanted to just hit some of the themes we talked about over this hour but more from a consumer or frequent flyer perspective. I'm noticing on social media and other places like Flyer Talks online chat room that a lot of Alaska's frequent flyers are predicting the imminent demise of Alaska's partnership with Delta Airline. What can you say about that prediction?

Hey. Good morning, Tom. This is Brad. Again, I would say that there is not a lot of value in trying to guess the future. What I would say -- and I appreciate the question. We have a really loyal base of customers in Seattle, we sort of natured and built that over many, many years. And we appreciate their loyalty. We are going to work really hard to make sure that our offerings are very, very compelling and that includes everything from the cities we fly, the times we fly, the partnerships we have and all of that. So I think that the Delta thing will sort of play itself other due course, and when it does play itself out, we will have more to say about that, but I do want to say we are very committed to the Seattle marketplace and ensuring that Alaska has just the very best offerings across the board for our Seattle based customers.

Well, what do you -- what would you say is keeping that partnership together at this point?

It limits to what we can talk. But we are in the midst of a long term agreement. We have a long term contract with Delta right now.

Thank you.

Yeah. Okay. I think that's the end of the questions. We appreciate everybody dropping in and listening. And we look forward to talking with you three months from now. Thanks.

Thank you for participating in today's conference call. This call will be available for replay beginning at 2 o'clock in Eastern Time Today through 11:59 p.m. Eastern Time on May 25, 2014. The conference ID number for the replay is 24156661. The number to dial for the replay is 1-855-859-2056 or 1-404-537-3406. Also the call will be accessible for future playback at www.alaskaair.com. You may now disconnect.