Alaska Air increases cargo capacity of jets    Alaska Airlines plans to retrofit five of its 737-400 passenger planes to carry main-deck cargo to replace five older 737-200s that are being

retired from the fleet.    The airline said it signed a $15 million contract with Taiwan-based InterContinental Aircraft Services to convert four 737-400s to a “combi” configuration with 70

passenger positions and four pallet positions. The fifth aircraft will be converted to an all-cargo configuration.    Alaska Airlines said it is studying several options to replace the

capacity lost by retiring aircraft.    The 737-200s are twice as old as the 400s, more costly to maintain and consume about 30 percent more fuel.