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FOR IMMEDIATE RELEASE October 19, 2004

ALASKA AIRLINES FILES TO SERVE LORETO, MEXICO IN PARTNERSHIP
WITH LEADING DEVELOPER LORETO BAY COMPANY

SEATTLE—Alaska Airlines today announced it has applied for authority to provide nonstop service from Los Angeles to Loreto, Mexico. The service will be supported by a marketing partnership with The Loreto Bay Company. The twice-weekly flights will begin February 17, 2005, pending U.S. Department of Transportation approval.

Located on the Sea of Cortez side of Mexico’s Baja Peninsula about 150 miles north of La Paz, Loreto is one of five areas (the others being Cancun, Cabo San Lucas, Huatulco and Ixtapa) identified by FONATUR, Mexico's tourist development agency, as prime tourism growth sites in Mexico. FONATUR selected The Loreto Bay Company as the primary developer of the destination.

“We are pleased to be partnering with The Loreto Bay Company to develop air service to Loreto in conjunction with the resort’s development,” said Gregg Saretsky, Alaska's executive vice president of marketing and planning. “Our customers will be able to enjoy the warmth and uniqueness of a charming Mexico resort within same-day service from California, the Pacific Northwest, Alaska and western Canada.”

Loreto is a seaside village sandwiched between the Sierra de la Giganta Mountains and the cobalt blue Sea of Cortez. Steeped in colonial history as the site of Mexico’s first mission, Loreto is renowned for its marina, fishing, water sports, pristine beaches and authentic cuisine.

The proposed flights will operate Sundays and Thursdays. They will depart Los Angeles at 11:10 a.m. and arrive in Loreto at 1:59 p.m. Return flights will depart Loreto at 4:00 p.m. and arrive in Los Angeles at 4:55 p.m. Alaska plans to use MD-80 series aircraft on the route--seating 12 in first class and 128 in the main cabin.

Loreto will be Alaska Airlines’ eighth destination in Mexico. Alaska currently serves Mazatlan, Puerto Vallarta, Los Cabos, Ixtapa/Zihuatanejo, Manzanillo/Costa Alegre, Cancun and Guadalajara. Alaska Airlines Vacations plans to offer a complete range of vacation packages to Loreto.

Alaska and its sister carrier, Horizon Air, together serve more than 80 cities in Alaska, the Lower 48, Canada and Mexico. Upon government approval, reservations and vacations to Loreto may be found at www.alaskaair.com. For more news and information, visit the Alaska Airlines Newsroom on the Internet at [ http://newsroom.alaskaair.com ]http://newsroom.alaskaair.com.

The Loreto Bay Company, a Canadian American corporation headquartered in Scottsdale Arizona, is developing The Villages of Loreto Bay, a series of seaside villages built on 8,000 acres in the foothills near Loreto. For more news and information visit [ http://www.loretobay.com ]www.loretobay.com.