Exhibit 99.2

ALASKA AIR GROUP, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

(In Millions Except Per Share Amounts)

	Three Months Ended December 31						Twelve Months Ended December 31
	2005			2004			2005			2004
Operating Revenues:
Passenger	$	666.8		$	598.6		$	2,728.7		$	2,497.1
Freight and mail		22.8			22.0			94.1			90.3
Other - net		41.0			35.7			152.5			136.4
Total Operating Revenues		730.6			656.3			2,975.3			2,723.8
Operating Expenses:
Wages and benefits		230.1			230.4			923.6			967.5
Contracted services		36.2			29.3			132.4			108.4
Aircraft fuel		196.8			155.9			722.8			540.7
Aircraft maintenance		53.9			46.2			228.5			184.1
Aircraft rent		47.0			45.9			187.0			187.4
Food and beverage service		13.1			12.4			50.2			51.9
Selling expenses		38.2			33.4			157.7			144.9
Depreciation and amortization		37.6			36.8			143.4			142.6
Landing fees and other rentals		51.9			46.6			208.4			185.1
Other		51.9			50.4			208.3			197.4
Restructuring charges		(0.3	)		25.9			20.4			53.4
Impairment of aircraft and related spare parts		—			0.6			—			40.2
Total Operating Expenses		756.4			713.8			2,982.7			2,803.6
Operating Loss		(25.8	)		(57.5	)		(7.4	)		(79.8	)
Nonoperating Income (Expense):
Interest income		9.3			5.9			30.9			24.5
Interest expense		(17.5	)		(13.0	)		(63.0	)		(51.9	)
Interest capitalized		4.0			0.6			8.9			1.7
Fuel hedging gains (losses)		(24.7	)		(7.8	)		173.9			85.5
Other - net		(1.6	)		(1.1	)		(6.1	)		(0.6	)
		(30.5	)		(15.4	)		144.6			59.2
Income (loss) before income tax and accounting change		(56.3	)		(72.9	)		137.2			(20.6	)
Income tax expense (benefit)		(23.3	)		(28.0	)		52.7			(5.3	)
Income (loss) before accounting change	$	(33.0	)	$	(44.9	)	$	84.5		$	(15.3	)
Cumulative effect of accounting change, net of tax		—			—			(90.4	)		—
Net Loss	$	(33.0	)	$	(44.9	)	$	(5.9	)	$	(15.3	)
Basic Earnings Per Share:
Income (loss) before accounting change	$	(1.15	)	$	(1.66	)	$	3.06		$	(0.57	)
Cumulative effect of accounting change		NA			NA			(3.27	)		NA
Net Loss Per Share	$	(1.15	)	$	(1.66	)	$	(0.21	)	$	(0.57	)
Diluted Earnings Per Share:
Income (loss) before accounting change	$	(1.15	)	$	(1.66	)	$	2.65		$	(0.57	)
Cumulative effect of accounting change		NA			NA			(2.66	)		NA
Net Loss Per Share	$	(1.15	)	$	(1.66	)	$	(0.01	)	$	(0.57	)
Shares Used for Computation:
Basic		28.629			26.975			27.609			26.859
Diluted		28.629			26.975			33.917			26.859

1

Alaska Air Group, Inc.

CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)

(In Millions)	December 31, 2005		December 31, 2004
Cash and marketable securities	$	983	$	874
Total current assets	$	1,540	$	1,242
Property and equipment-net		2,032		1,908
Other assets		220		185
Total assets	$	3,792	$	3,335
Current liabilities	$	1,165	$	957
Long-term debt and capital lease obligations		969		990
Other liabilities and credits		830		723
Shareholders’ equity		828		665
Total liabilities and shareholders’ equity	$	3,792	$	3,335

2

Alaska Airlines Financial and Statistical Data

	Three Months Ended December 31								Twelve Months Ended December 31
	2005			2004			% Change		2005			2004			% Change
Financial Data (in millions):
Operating Revenues:
Passenger	$	526.4		$	477.8		10.2		$	2,183.0		$	2,023.6		7.9
Freight and mail		21.9			21.1		3.8			90.3			86.4		4.5
Other - net		38.9			32.4		20.1			142.8			123.0		16.1
Total Operating Revenues		587.2			531.3		10.5			2,416.1			2,233.0		8.2
Operating Expenses:
Wages and benefits		181.2			187.9		(3.6	)		737.4			799.7		(7.8	)
Contracted services		32.9			26.2		25.6			119.9			96.5		24.2
Aircraft fuel		170.9			135.6		26.0			626.6			472.0		32.8
Aircraft maintenance		41.7			34.5		20.9			185.2			145.8		27.0
Aircraft rent		29.6			28.0		5.7			116.8			113.5		2.9
Food and beverage service		12.5			11.9		5.0			47.7			49.8		(4.2	)
Selling expenses		29.0			31.1		(6.8	)		126.9			132.2		(4.0	)
Depreciation and amortization		32.5			32.9		(1.2	)		125.4			128.1		(2.1	)
Landing fees and other rentals		40.4			35.9		12.5			161.9			142.0		14.0
Other		39.0			38.2		2.1			158.7			148.6		6.8
Restructuring charges		(0.3	)		25.9		NM			20.4			53.4		NM
Impairment of aircraft and related spare parts		—			—		NM			—			36.8		NM
Total Operating Expenses		609.4			588.1		3.6			2,426.9			2,318.4		4.7
Operating Loss		(22.2	)		(56.8	)	NM			(10.8	)		(85.4	)	NM
Interest income		9.4			6.2					32.5			26.2
Interest expense		(14.3	)		(11.0	)				(51.2	)		(44.1	)
Interest capitalized		3.6			0.4					8.1			1.1
Fuel hedging gains (losses)		(21.5	)		(6.8	)				150.6			75.3
Other - net		(1.3	)		(0.9	)				(5.0	)		(0.1	)
		(24.1	)		(12.1	)				135.0			58.4
Income (Loss) Before Income Tax and Accounting Change	$	(46.3	)	$	(68.9	)	NM		$	124.2		$	(27.0	)	NM
Operating Statistics:
Revenue passengers (000)		4,043			3,998		1.1			16,759			16,295		2.8
RPMs (000,000)		4,104			3,976		3.2			16,915			16,231		4.2
ASMs (000,000)		5,556			5,452		1.9			22,292			22,276		0.1
Passenger load factor		73.9	%		72.9	%	1.0	pts		75.9	%		72.9	%	3.0	pts
Yield per passenger mile		12.83	¢		12.02	¢	6.7			12.91	¢		12.47	¢	3.5
Operating revenue per ASM		10.57	¢		9.75	¢	8.4			10.84	¢		10.02	¢	8.2
Operating expenses per ASM (a)		10.97	¢		10.79	¢	1.7			10.89	¢		10.41	¢	4.6
Operating expenses per ASM excluding fuel, navigation fee recovery, restructuring and impairment charges(a)		7.90	¢		7.83	¢	0.9			8.01	¢		7.92	¢	1.1
Raw fuel cost per gallon (a)	$	2.02		$	1.60		26.3		$	1.84		$	1.37		34.3
GAAP fuel cost per gallon (a)	$	1.99		$	1.56		27.6		$	1.81		$	1.33		36.1
Economic fuel cost per gallon (a)	$	1.69		$	1.40		20.7		$	1.53		$	1.26		21.4
Fuel gallons (000,000)		85.7			87.1		(1.6	)		346.4			354.7		(2.3	)
Average number of employees		8,937			9,433		(5.3	)		9,065			9,968		(9.1	)
Aircraft utilization (blk hrs/day)		10.8			10.8		0.0			10.8			11.0		(1.8	)
Operating fleet at period-end		110			108		1.9			110			108		1.9

NM = Not Meaningful

(a) See Note A on page 5.

3

Horizon Air Financial and Statistical Data

	Three Months Ended December 31								Twelve Months Ended December 31
	2005			2004			% Change		2005			2004			% Change
Financial Data (in millions):
Operating Revenues:
Passenger	$	138.2		$	125.1		10.5		$	544.0		$	487.3		11.6
Freight and mail		0.9			0.9		0.0			3.8			3.9		(2.6	)
Other - net		1.8			2.9		(37.9	)		8.6			12.0		(28.3	)
Total Operating Revenues		140.9			128.9		9.3			556.4			503.2		10.6
Operating Expenses:
Wages and benefits		46.8			41.4		13.0			178.4			163.5		9.1
Contracted services		6.1			5.3		15.1			23.8			20.7		15.0
Aircraft fuel		25.9			20.3		27.6			96.2			68.7		40.0
Aircraft maintenance		12.2			11.7		4.3			43.3			38.3		13.1
Aircraft rent		17.4			17.9		(2.8	)		70.2			73.9		(5.0	)
Food and beverage service		0.6			0.5		20.0			2.5			2.1		19.0
Selling expenses		7.0			6.6		6.1			29.1			26.5		9.8
Depreciation and amortization		4.8			3.7		29.7			16.8			13.4		25.4
Landing fees and other rentals		12.0			10.2		17.6			47.7			41.4		15.2
Other		11.2			10.8		3.7			42.2			42.0		0.5
Impairment of aircraft and related spare parts		—			0.6		NM			—			3.4		NM
Total Operating Expenses		144.0			129.0		11.6			550.2			493.9		11.4
Operating Income (Loss)		(3.1	)		(0.1	)	NM			6.2			9.3		NM
Interest income		0.6			0.2					1.6			1.1
Interest expense		(1.2	)		(0.7	)				(5.5	)		(3.9	)
Interest capitalized		0.4			0.2					0.8			0.6
Fuel hedging gains (losses)		(3.2	)		(1.0	)				23.3			10.2
Other - net		(0.1	)		(0.2	)				—			(0.2	)
		(3.5	)		(1.5	)				20.2			7.8
Income (Loss) Before Income Tax and Accounting Change	$	(6.6	)	$	(1.6	)	NM		$	26.4		$	17.1		NM
Operating Statistics:
Revenue passengers (000)		1,613			1,568		2.9			6,481			5,930		9.3
RPMs (000,000)		632			569		11.1			2,475			2,155		14.8
ASMs (000,000)		858			793		8.2			3,400			3,107		9.4
Passenger load factor		73.7	%		71.7	%	2.0	pts		72.8	%		69.3	%	3.5	pts
Yield per passenger mile		21.87	¢		21.99	¢	(0.5	)		21.98	¢		22.61	¢	(2.8	)
Operating revenue per ASM		16.42	¢		16.25	¢	1.1			16.36	¢		16.20	¢	1.0
Operating expenses per ASM (a)		16.78	¢		16.26	¢	3.2			16.18	¢		15.90	¢	1.8
Operating expenses per ASM excluding fuel and impairment charges (a)		13.76	¢		13.62	¢	1.1			13.35	¢		13.58	¢	(1.7	)
Raw fuel cost per gallon (a)	$	2.06		$	1.66		24.1		$	1.90		$	1.42		33.8
GAAP fuel cost per gallon (a)	$	2.04		$	1.62		25.9		$	1.87		$	1.38		35.5
Economic fuel cost per gallon (a)	$	1.74		$	1.48		17.6		$	1.58		$	1.31		20.6
Fuel gallons (000,000)		12.7			12.5		1.6			51.3			49.7		3.2
Average number of employees		3,537			3,493		1.3			3,456			3,423		1.0
Aircraft utilization (blk hrs/day)		8.7			8.5		2.4			8.7			8.3		4.8
Operating fleet at period-end		65			65		0.0			65			65		0.0

NM = Not Meaningful

(a) See Note A on page 5.

4

Note A:

Pursuant to Item 10 of Regulation S-K, we are providing disclosure of the reconciliation of reported non-GAAP financial measures to their most directly comparable financial measures reported on a GAAP basis. The non-GAAP financial measures provide management the ability to measure and monitor performance both with and without the cost of aircraft fuel (including the gains and losses associated with our fuel hedging program where appropriate), the navigation fee refund, restructuring charges or adjustments thereto, and aircraft impairment charges. Because the cost and availability of aircraft fuel are subject to many economic and political factors beyond our control and we record changes in the fair value of our hedge portfolio in our income statement, it is our view that the measurement and monitoring of performance without fuel is important. In addition, we believe the disclosure of financial performance without impairment and restructuring charges is useful to investors. Finally, these non-GAAP financial measures are also more comparable to financial measures reported to the Department of Transportation by other major network airlines.

The following tables reconcile our non-GAAP financial measures to the most directly comparable GAAP financial measures for both Alaska Airlines, Inc. and Horizon Air Industries, Inc.:

Alaska Airlines, Inc.:

($ in millions)

	Three Months Ended December 31,						Twelve Months Ended December 31
	2005			2004			2005			2004
Unit cost reconciliations:
Operating expenses	$	609.4		$	588.1		$	2,426.9		$	2,318.4
ASMs (000,000)		5,556			5,452			22,292			22,276
Operating expenses per ASM		10.97	¢		10.79	¢		10.89	¢		10.41	¢
Operating expenses	$	609.4		$	588.1		$	2,426.9		$	2,318.4
Less: aircraft fuel		(170.9	)		(135.6	)		(626.6	)		(472.0	)
Less: restructuring charges		0.3			(25.9	)		(20.4	)		(53.4	)
Add: navigation fee refund		—			—			4.7			7.7
Less: impairment of aircraft and related spare parts		—			—			—			(36.8	)
Operating expenses excluding fuel, navigation fee refund, restructuring and impairment charges	$	438.8		$	426.6		$	1,784.6		$	1,763.9
ASMs (000,000)		5,556			5,452			22,292			22,276
Operating expenses per ASM excluding fuel, navigation fee refund, restructuring and impairment charges		7.90	¢		7.83	¢		8.01	¢		7.92	¢
Reconciliation to GAAP income (loss) before taxes and accounting change:
Income (loss) before taxes and accounting change, excluding mark-to-market hedging gains (losses), navigation fee refund, restructuring and impairment charges	$	0.5		$	(22.7	)	$	85.8		$	2.1
Add: mark-to-market hedging gains (losses) included in nonoperating income (expense)		(47.1	)		(20.3	)		53.1			50.1
Less: restructuring charges		0.3			(25.9	)		(20.4	)		(53.4	)
Add: navigation fee refund and related interest received		—			—			5.7			11.0
Less: impairment of aircraft and related spare parts		—			—			—			(36.8	)
GAAP income (loss) before taxes and accounting change as reported	$	(46.3	)	$	(68.9	)	$	124.2		$	(27.0	)
	Three Months Ended December 31
	2005						2004
	(000s)			Cost/Gal			(000s)			Cost/Gal
Aircraft fuel reconciliations:
Fuel expense before hedge activities (“raw” or “into-plane” fuel cost)	$	172.7		$	2.02		$	139.3		$	1.60
Less: gains on settled hedges included in fuel expense		(1.8	)		(0.03	)		(3.7	)		(0.04	)
GAAP fuel expense	$	170.9		$	1.99		$	135.6		$	1.56
Less: gains on settled hedges included in nonoperating income (expense)		(25.6	)		(0.30	)		(13.5	)		(0.16	)
Economic fuel expense	$	145.3		$	1.69		$	122.1		$	1.40
Fuel gallons (000,000)		85.7						87.1
Mark-to-market gains (losses) included in non-operating income (expense) related to hedges that settle in future periods, net of the reclassification of previously recorded mark-to-market gains to gains on settled hedges included in nonoperating income (expense)	$	(47.1	)				$	(20.3	)
	Twelve Months Ended December 31
	2005						2004
	(000s)			Cost/Gal			(000s)			Cost/Gal
Fuel expense before hedge activities (“raw” or “into-plane” fuel cost)	$	637.9		$	1.84		$	486.6		$	1.37
Less: gains on settled hedges included in fuel expense		(11.3	)		(0.03	)		(14.6	)		(0.04	)
GAAP fuel expense	$	626.6		$	1.81		$	472.0		$	1.33
Less: gains on settled hedges included in nonoperating income (expense)		(97.5	)		(0.28	)		(25.2	)		(0.07	)
Economic fuel expense	$	529.1		$	1.53		$	446.8		$	1.26
Fuel gallons (000,000)		346.4						354.7
Mark-to-market gains included in non-operating income (expense) related to hedges that settle in future periods, net of the reclassification of previously recorded mark-to-market gains to gains on settled hedges included in nonoperating income (expense)	$	53.1					$	50.1

5

Horizon Air Industries, Inc.

($ in millions)

	Three Months Ended December 31,						Twelve Months Ended December 31
	2005			2004			2005			2004
Unit cost reconciliations:
Operating expenses	$	144.0		$	129.0		$	550.2		$	493.9
ASMs (000,000)		858			793			3,400			3,107
Operating expenses per ASM		16.78	¢		16.26	¢		16.18	¢		15.90	¢
Operating expenses	$	144.0		$	129.0		$	550.2		$	493.9
Less: aircraft fuel		(25.9	)		(20.3	)		(96.2	)		(68.7	)
Less: impairment of aircraft and related spare parts		—			(0.6	)		—			(3.4	)
Operating expenses excluding fuel and impairment charges	$	118.1		$	108.1		$	454.0		$	421.8
ASMs (000,000)		858			793			3,400			3,107
Operating expenses per ASM excluding fuel and impairment charges		13.76	¢		13.62	¢		13.35	¢		13.58	¢
Reconciliation to GAAP income (loss) before taxes and accounting change:
Income before taxes and accounting change, excluding impairment charges and mark-to-market hedging gains (losses)	$	0.4		$	1.8		$	17.8		$	13.7
Add: mark-to-market hedging gains (losses) included in nonoperating income (expense)		(7.0	)		(2.8	)		8.6			6.8
Less: impairment of aircraft and related spare parts		—			(0.6	)		—			(3.4	)
GAAP income (loss) before taxes and accounting change as reported	$	(6.6	)	$	(1.6	)	$	26.4		$	17.1
	Three Months Ended December 31,
	2005						2004
	(000s)			Cost/Gal			(000s)			Cost/Gal
Aircraft fuel reconciliations:
Fuel expense before hedge activities (“raw” or “into-plane” fuel cost)	$	26.1		$	2.06		$	20.8		$	1.66
Less: gains on settled hedges included in fuel expense		(0.2	)		(0.02	)		(0.5	)		(0.04	)
GAAP fuel expense	$	25.9		$	2.04		$	20.3		$	1.62
Less: gains on settled hedges included in nonoperating income (expense)		(3.8	)		(0.30	)		(1.8	)		(0.14	)
Economic fuel expense	$	22.1		$	1.74		$	18.5		$	1.48
Fuel gallons (000,000)		12.7						12.5
Mark-to-market gains (losses) included in non-operating income (expense) related to hedges that settle in future periods, net of the reclassification of previously recorded mark-to-market gains to gains on settled hedges included in nonoperating income (expense)	$	(7.0	)				$	(2.8	)
	Twelve Months Ended December 31,
	2005						2004
	(000s)			Cost/Gal			(000s)			Cost/Gal
Fuel expense before hedge activities (“raw” or “into-plane” fuel cost)	$	97.7		$	1.90		$	70.7		$	1.42
Less: gains on settled hedges included in fuel expense		(1.5	)		(0.03	)		(2.0	)		(0.04	)
GAAP fuel expense	$	96.2		$	1.87		$	68.7		$	1.38
Less: gains on settled hedges included in nonoperating income (expense)		(14.7	)		(0.29	)		(3.4	)		(0.07	)
Economic fuel expense	$	81.5		$	1.58		$	65.3		$	1.31
Fuel gallons (000,000)		51.3						49.7
Mark-to-market gains included in non-operating income (expense) related to hedges that settle in future periods, net of the reclassification of previously recorded mark-to-market gains to gains on settled hedges included in nonoperating income (expense)	$	8.6					$	6.8

6

Air Group Net Income and EPS Reconciliation:

The following table reconciles Alaska Air Group, Inc.'s net income (loss) and diluted earnings per share during 2005 and 2004 excluding the cumulative effect of the accounting change, mark-to-market hedging gains (losses) net of related reclassifications, the navigation fee refund, and restructuring and impairment charges to the reported GAAP amounts (in millions except per share amounts):

	Three Months Ended December 31,
	2005						2004
	Dollars			Diluted EPS			Dollars			Diluted EPS
Net income (loss) and diluted EPS excluding mark-to-market hedging gains (losses), restructuring and impairment charges	$	0.6		$	0.02		$	(14.3	)	$	(0.53	)
Mark-to-market hedging gains (losses), net of tax		(33.8	)		(1.18	)		(14.2	)		(0.53	)
Restructuring charges, net of tax		0.2			0.01			(16.0	)		(0.59	)
Impairment charges, net of tax		—			—			(0.4	)		(0.01	)
Reported GAAP amounts	$	(33.0	)	$	(1.15	)	$	(44.9	)	$	(1.66	)

	Twelve Months Ended December 31,
	2005						2004
	Dollars			Diluted EPS			Dollars			Diluted EPS
Net income and diluted EPS excluding the cumulative effect of the accounting change, mark-to-market hedging gains, navigation fee refund, restructuring and impairment charges	$	55.0		$	1.78		$	5.2		$	0.19
Cumulative effect of accounting change, net of tax		(90.4	)		(2.66	)		—			—
Mark-to-market hedging gains, net of tax		38.6			1.14			31.7			1.18
Navigation fee refund, net of tax		3.6			0.10			6.3			0.23
Restructuring charges, net of tax		(12.7	)		(0.37	)		(31.8	)		(1.18	)
Impairment charges, net of tax		—			—			(26.7	)		(0.99	)
Reported GAAP amounts	$	(5.9	)	$	(0.01	)	$	(15.3	)	$	(0.57	)

7

Air Group EPS Calculations:

The following table summarizes Alaska Air Group, Inc.'s basic and diluted per share calculations for income (loss) before the accounting change and net income (loss) (in millions except per share amounts):

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2005			2004			2005			2004
Basic Earnings Per Share:
Income (loss) before accounting change	$	(33.0	)	$	(44.9	)	$	84.5		$	(15.3	)
Weighted average shares outstanding		28.629			26.975			27.609			26.859
Income (loss) per share before accounting change	$	(1.15	)	$	(1.66	)	$	3.06		$	(0.57	)
Cumulative effect of accounting change, net of tax		NA			NA		$	(90.4	)		NA
Weighted average shares outstanding		NA			NA			27.609			NA
Per share cumulative effect of accounting change		NA			NA		$	(3.27	)		NA
Net loss	$	(33.0	)	$	(44.9	)	$	(5.9	)	$	(15.3	)
Weighted average shares outstanding		28.629			26.975			27.609			26.859
Net loss per share	$	(1.15	)	$	(1.66	)	$	(0.21	)	$	(0.57	)
Diluted Earnings Per Share:
Income (loss) before accounting change	$	(33.0	)	$	(44.9	)	$	84.5		$	(15.3	)
Interest on convertible notes, net of tax		NA			NA			5.5			NA
Income before accounting change for diluted calculation	$	(33.0	)	$	(44.9	)	$	90.0		$	(15.3	)
Weighted average shares outstanding		28.629			26.975			33.917			26.859
Income (loss) per share before accounting change	$	(1.15	)	$	(1.66	)	$	2.65		$	(0.57	)
Cumulative effect of accounting change, net of tax		NA			NA		$	(90.4	)		NA
Weighted average shares outstanding		NA			NA			33.917			NA
Per share cumulative effect of accounting change		NA			NA		$	(2.66	)		NA
Net loss	$	(33.0	)	$	(44.9	)	$	(5.9	)	$	(15.3	)
Interest on convertible notes, net of tax		NA			NA			5.5			NA
Net income for diluted calculation	$	(33.0	)	$	(44.9	)	$	(0.4	)	$	(15.3	)
Weighted average shares outstanding		28.629			26.975			33.917			26.859
Net loss per share	$	(1.15	)	$	(1.66	)	$	(0.01	)	$	(0.57	)

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