Category Archives: Horizon Air

Horizon Air celebrates 40 years of flying in the Pacific Northwest

From the Alaska Airlines blog:

On September 1, 40 years ago, Horizon Air, our sister airline in the Pacific Northwest, flew its first flight between Seattle and Yakima, Washington.

If you’re from the PNW there’s a strong chance you’ve flown with Horizon. They’re the regional airline for Alaska Airlines and help connect our guests in the West with the world.

“Horizon connects us all to the Pacific Northwest’s incredible outdoor communities and amazing small cities and enables our connection to the country and world. Horizon Air employees make travel feel personal and bring incredible heart and care to every guest,” said Ben Minicucci, Alaska CEO.

Meet Travion Smith, a ground service agent in Seattle who stays “grounded” through kindness and awareness. Read more

Did you know?

  • Horizon flies to more than 50 destinations in our route network.
  • First airline to serve Starbucks coffee in the sky.
  • Are always looking for great new team members. Check out current job openings!
  • Known for delivering performance with excellence and developing industry leading innovations to create safe, incomparable flying experiences.
  • Flies 32 Bombardier Q400 aircraft—perfectly suited for serving smaller communities in the PNW—and 30 Embraer E175 aircraft.
  • Well known for offering FREE beer + wine to guests 21 years young on Q400 flights!

To commemorate Horizon’s momentous day, a special flight will fly the same route that started it all on Sept 1, 1981. This time, it will be flown on Horizon’s “Meatball” plane, a custom-painted retro-themed aircraft, which will fly some of its beloved employees and guests from Seattle to Yakima.

“We’re flying our meatball livery on the same route Horizon flew 40 years ago,” said Capt. Perry Solmonson, 40th Anniversary Committee Chair. “This is a huge milestone for us and this anniversary flight recognizes not only the hard and successful work accomplished to date, but also celebrate our up-and-coming team members of the future.”

40 years of history

Founded in 1981 by entrepreneur Milt Kuolt and a group of venture capitalists in Seattle, Horizon had fewer than 100 employees at that time and operated a fleet of two Fairchild F-27 propjets.

Kuolt believed that every guest deserved more than just a ride from point A to B, which turned into the superior service that Horizon is still known for today.

“Service began with complimentary wine then blossomed into other little but much-appreciated amenities such as free newspapers handed out at the gate, complimentary coffee, and baskets on board filled with munching snacks that included all kinds of goodies,” wrote Robert J. Serling in the chapter on Horizon Air in the book, Character & Characters: The Spirit of Alaska Airlines.

The service created a culture, a way of life and a state of mind that was “firmly embedded in the work ethic and attitude of every Horizon employee,” wrote Serling.

Today, Horizon has more than 3,500 employees and operates a fleet of 62 aircraft.

Reaching 40 years is a huge milestone. Despite the ups and downs of the industry, it’s been the people of Horizon who have carried the company forward. Our 40th anniversary is all about our people.

First Officer Perry Solmonson waves from the cockpit.

“What I love most about Horizon is our family unit. I have never seen a group of people come together more for the good of a company or each other as I have witnesses during my time with QX. The commitment to our values, the love and respect we show each other and the service to our guests across all work groups is unmatched. I look forward to seeing my colleagues who I consider extended family.” – Natalie Razor, Flight Attendant. SEA

“I love the opportunities to travel around the world on behalf of Horizon Air. I love the opportunities I’ve had to mentor the next generations of Maintenance Technicians. I love the opportunities to travel through the system and assist in new station openings. I love the dynamics of the business, always learning the new aircraft, working through the highs and lows, (9-11, the pandemic). Raising my family.” – Willard Clark, lead technician, GEG

“Being a part of the Horizon family is exactly that. Like any family, we have our ups and downs, highs and lows. We support our Horizon family members and help each other overcome our problems. Some say you can’t pick your family; Horizon is the exception.” – Bill Bowling, Q400 Captain, PDX

“Growing up in the tiny town of Connell, WA; Horizon Air was the airline I trusted to get me to the nearest major airport. It is always the airline I flew on my voyage outside of home and back to my home. Now I am living in Seattle and Horizon still connects me to my parents in my hometown that I love flying to! I am proud to be part of the airline that keeps us connected through the years. #PSC” – Jaime Chavez, passenger service agent, SEA

“I love the loyalty and dedication the employees have and flying with a regional airline I see that same loyalty with our customers. In the short 10 months I have already seen several of our elites on a regular basis and it feels good to be able to build that relationship with them.” – Catherine Alder, Flight Attendant, PDX 

Updated 2021 University of Washington college livery

Above Copyright Photo: Alaska Horizon (Horizon Air) Bombardier DHC-8-402 (Q400) N435QX (msn 4232) (Huskies – Go Dawgs) SEA (Michael B. Ing). Image: 954699.

Horizon Air aircraft slide show:

Alaska Horizon aircraft slide show:

Alaska Airlines to reward its vaccinated employees with a $200 payment

Alaska Airlines made this announcement:

Throughout the pandemic, the safety of our employees and guests has always come first, and we are committed to protecting our fellow employees, guests and loved ones from the impacts of the COVID-19 virus.

We believe having as many people as possible vaccinated is the is best path for protection against COVID-19 and we will continue to strongly encourage our employees to be vaccinated. As of today, 75% of Alaska and Horizon employees who have shared their vaccination status are vaccinated. This is good progress, but we have more work to do. That’s why we are implementing new measures designed to increase vaccination rates and enhance our multi-layered approach to safety.

Moving forward, we will implement a testing protocol for unvaccinated employees as another layer of safety, while continuing to enforce safety protocols such as masking and distancing. We will also require all unvaccinated employees to participate in a vaccine education program and have stopped special COVID pay for unvaccinated employee absences due to exposure or infection. All new hires, effective immediately, will be required to be vaccinated before being hired at Alaska Airlines or Horizon Air. Finally, we will recognize those employees who provide proof of vaccination with a $200 payment.

And as we have throughout the pandemic, we’ll continue to adjust our safety protocols as we learn.

Alaska Air Group reports second quarter 2021 results

Alaska Air Group issued this financial statement for the second quarter:

Financial Results:

  • Reported net income for the second quarter of 2021 under Generally Accepted Accounting Principles (GAAP) of $397 million, or $3.15 per share, compared to a net loss of $214 million, or $1.74 per share in the second quarter of 2020.
  • Reported a net loss for the second quarter of 2021, excluding CARES Act Payroll Support Program (PSP) wage offsets, special items and mark-to-market fuel hedge accounting adjustments, of $38 million, or $0.30 per share, compared to an adjusted net loss of $439 million or $3.57 per share, in the second quarter of 2020.
  • Reported a debt-to-capitalization ratio, including short-term borrowings related to COVID-19, of 56%.
  • Held $4.0 billion in unrestricted cash and marketable securities as of June 30, 2021.
  • Generated $840 million in operating cash flow in the second quarter, inclusive of $489 million of PSP funding, bolstered by improved advance bookings on a surge in demand for air travel. Excluding PSP funding, quarterly operating cash flows improved over $580 million from the first quarter of 2021.

Operational Updates:

  • Announced plans to grow our mainline and regional fleets, exercising options for 13 Boeing 737-9 MAX with deliveries in 2023 and 2024, and nine E175 to be operated by Horizon Air with deliveries in 2022 and 2023. In addition, expanded our long-term capacity agreement with SkyWest Airlines by eight aircraft to be delivered in 2022.
  • Announced new service to Central America with new routes to Belize from Seattle and Los Angeles, with service slated to begin in November 2021.
  • Issued recall notices to all pilots on incentive lines for return to work by October 2021.
  • Continued our history of providing meaningful incentive programs to our employees with $67 million in cash bonuses earned to date.
  • Announced seven new domestic routes aimed at providing our West Coast guests more options to sun-filled destinations, including three new routes serving Boise, Idaho.

Liquidity Updates:

  • Received $664 million through a combination of grants and loans from the U.S. Treasury under an extension of the PSP.
  • Repaid approximately $570 million in debt, including the full $135 million loan from the U.S. Treasury made available under the CARES Act and the $363 million outstanding balance on two credit facilities.

Sustainability Updates:

  • Announced five-part pathway to achieve a net zero carbon footprint by 2040, putting the airline on track to meet the annual carbon intensity target that is part of its performance-based pay program for all employees.
  • First airline to implement network optimization software, Flyways, using artificial intelligence and machine learning to optimize air traffic and enable more fuel-efficient flight paths for aggregate savings of fuel, carbon emissions and time.
  • Partnered with Boeing to launch a 737-9 ecoDemonstrator to test advanced technologies that can enhance the safety and sustainability of air travel.  The aircraft will conduct five months of flight tests across the U.S.
  • Revealed “Our Commitment” aircraft in partnership with long-time partner UNCF, a symbol of the airline’s commitments to increase diverse representation in our leadership, advance education as a critical component of equity, and to make Alaska Airlines a place where everyone feels they belong.

Alaska Air Group Inc. today reported second quarter 2021 GAAP net income of $397 million, or $3.15 per share, compared to a net loss of $214 million, or $1.74 per share in the second quarter of 2020. Excluding the impact of payroll support program wage offsets, special items and mark-to-market fuel hedge adjustments, the company reported an adjusted net loss of $38 million, or $0.30 per diluted share, compared to an adjusted net loss of $439 million, or $3.57 per diluted share in 2020.

“As we put the worst of last year’s downturn behind us, Alaska is back on the path to profitability,” said CEO Ben Minicucci. “We are executing our plan, rebuilding our network, leveraging our capacity to meet growing demand, and delivering exceptional service and value to our guests. I’m incredibly proud and grateful for how hard our employees are working and how they show up for each other and our guests every day with focus on safety, operational excellence and care.”

The following table reconciles the company’s reported GAAP net income (loss) per share (EPS) for the three and six months ended June 30, 2021 and 2020 to adjusted amounts.

Three Months Ended June 30,
2021 2020
(in millions, except per-share amounts) Dollars Diluted EPS Dollars Diluted EPS
GAAP net income (loss) per share $ 397 $ 3.15 $ (214) $ (1.74)
Payroll support program wage offset (503) (3.99) (362) (2.94)
Mark-to-market fuel hedge adjustments (46) (0.37) (6) (0.05)
Special items – impairment charges and other (4) (0.03) 69 0.56
Special items – restructuring charges (23) (0.18)
Special items – merger-related costs 1 0.01
Income tax effect of reconciling items above 141 1.12 73 0.59
Non-GAAP adjusted net loss per share $ (38) $ (0.30) $ (439) $ (3.57)
Six Months Ended June 30,
2021 2020
(in millions, except per-share amounts) Dollars Diluted EPS Dollars Diluted EPS
GAAP net income (loss) per share $ 266 $ 2.12 $ (446) $ (3.62)
Payroll support program wage offset (914) (7.27) (362) (2.94)
Mark-to-market fuel hedge adjustments (68) (0.54) 3 0.02
Special items – impairment charges and other 14 0.11 229 1.86
Special items – restructuring charges (12) (0.10)
Special items – merger-related costs 4 0.03
Income tax effect of reconciling items above 240 1.91 31 0.25
Non-GAAP adjusted net loss per share $ (474) $ (3.77) $ (541) $ (4.40)

Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables. A glossary of financial terms can be found on the last page of this release.

A conference call regarding the second quarter results will be streamed online at 8:30 a.m. PDT on July 22, 2021. It can be accessed at www.alaskaair.com/investors. For those unable to listen to the live broadcast, a replay will be available after the conclusion of the call.

References in this update to “Air Group,” “Company,” “we,” “us,” and “our” refer to Alaska Air Group, Inc. and its subsidiaries, unless otherwise specified.

This news release may contain forward-looking statements subject to the safe harbor protection provided by Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. These statements relate to future events and involve known and unknown risks and uncertainties that may cause actual outcomes to be materially different from those indicated by any forward-looking statements.  For a comprehensive discussion of potential risk factors, see Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Some of these risks include the risks associated with contagious illnesses and contagion, such as COVID-19, general economic conditions, increases in operating costs including fuel, competition, labor costs and relations, our indebtedness, inability to meet cost reduction goals, seasonal fluctuations in our financial results, an aircraft accident, and changes in laws and regulations. All of the forward-looking statements are qualified in their entirety by reference to the risk factors discussed therein. We operate in a continually changing business environment, and new risk factors emerge from time to time. Management cannot predict such new risk factors, nor can it assess the impact, if any, of such new risk factors on our business or events described in any forward-looking statements. We expressly disclaim any obligation to publicly update or revise any forward-looking statements after the date of this report to conform them to actual results. Over time, our actual results, performance or achievements will likely differ from the anticipated results, performance, or achievements that are expressed or implied by our forward-looking statements, and such differences might be significant and materially adverse.

Alaska Airlines and its regional partners serve more than 120 destinations across the United States and to Mexico, Canada and Costa Rica. The airline emphasizes Next-Level Care for its guests, along with providing low fares, award-winning customer service and sustainability efforts. Alaska is a member of oneworld. With the global alliance and the airline’s additional partners, guests can travel to more than 1,000 destinations on more than 20 airlines while earning and redeeming miles on flights to locations around the world. Learn more about Alaska at newsroom.alaskaair.com and blog.alaskaair.com. Alaska Airlines and Horizon Air are subsidiaries of Alaska Air Group (NYSE: ALK).

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Alaska Air Group, Inc.
Three Months Ended June 30, Six Months Ended June 30,
(in millions, except per-share amounts) 2021 2020 Change 2021 2020 Change
Operating Revenues:
Passenger revenue $ 1,352 $ 309 338 % $ 2,011 $ 1,790 12 %
Mileage Plan other revenue 118 73 <td style=”font-family: arial, verdana; BORDER-BOTTOM: 1pt; BORDER-LEFT

Horizon Air pilots pass vote to amend labor contract

Horizon Air pilots, represented by the Airline Professionals Association, Teamsters Local 1224 (IBT), have voted to ratify a new wage agreement. IBT represents Horizon’s more than 800 pilots.

The agreement, which passed with 74% of the vote, includes competitive wage increases aimed to attract and retain pilots.

Airline employees are covered by the Railway Labor Act, so labor agreements do not expire; they become amendable and remain in effect until a new contract is ratified.

Horizon Air is a subsidiary of Alaska Air Group and flies to 63 cities across the United States, Canada and Mexico.

Alaska Airlines grows in Boise, Idaho

Alaska Airlines made this announcement:

Boise is booming! And Alaska Airlines keeps growing in the dynamic city where we’ve long been the largest carrier. We’re flying our guests in Idaho’s Treasure Valley to the places they’re eager to visit. Starting today, we’re launching daily nonstop service between Boise and Chicago O’Hare, and Boise and Austin. Also today, we’re announcing new nonstop flying between Boise and Pullman-Moscow Regional Airport in Washington, and Boise and Phoenix.

Newly added flights

Start
Date
End
Date
City Pair Departs Arrives Frequency Aircraft
Aug. 17 Boise –

Pullman-Moscow

11:10 a.m. 11:15 a.m. 5x/Weekly Q400
Aug. 17 Pullman-Moscow –
Boise
11:55 a.m. 1:34 p.m. 5x/Weekly Q400
Nov. 19 April 18 Boise – Phoenix 10:30 a.m. 12:30 p.m. Daily E175
Nov. 19 April 18 Phoenix – Boise 1:10 p.m. 4:15 p.m. Daily E175

Flight times based on local times.

Alaska Air Group orders nine new E175 aircraft for operation with Horizon Air

Embraer has agreed the sale of nine new E175 jets to Alaska Air Group and its subsidiary Horizon Air. The E175 aircraft will fly exclusively with Alaska Airlines under a Capacity Purchase Agreement (CPA).

Alaska Airlines, a new member of the oneworld Alliance, currently has 62 Embraer E175 jets in their fleet, operated by Horizon Air and SkyWest Airlines. The 76-seat aircraft will be delivered in Alaska’s livery and three-class configuration, starting in 2022.

Alaska Air Group reports a first quarter GAAP net loss of $232 million

Alaska Air Cargo (Alaska Airlines) Boeing 737-790 (F) WL N626AS (msn 30793) ANC (Michael B. Ing). Image: 951702.

Alaska Airlines Group issued this financial report:

Financial Results:

  • Reported a net loss for the first quarter of 2021 under Generally Accepted Accounting Principles (GAAP) of $131 million, or $1.05 per share, compared to a net loss of $232 million, or $1.89 per share in the first quarter of 2020.
  • Reported a net loss for the first quarter of 2021, excluding CARES Act Payroll Support Program (PSP) wage offsets, special items and mark-to-market fuel hedge accounting adjustments, of $436 million, or $3.51 per share, compared to an adjusted net loss of $102 million or $0.83 per share, in the first quarter of 2020.
  • Decreased adjusted net debt to $1.6 billion at March 31, 2021 from $1.7 billion at December 31, 2020.
  • Reported a debt-to-capitalization ratio, including short-term borrowings related to COVID-19, of 62%.
  • Held $3.5 billion in unrestricted cash and marketable securities as of March 31, 2021, and available total liquidity of $5.3 billion.
  • Generated $167 million in operating cash flow in the first quarter, inclusive of PSP funding, bolstered by improved advance bookings for increased demand for air travel.

Operational Updates:

  • Welcomed Ben Minicucci as Air Group CEO and Constance von Muehlen as Alaska COO.
  • Formally joined the oneworld alliance on March 31 as the 14th member airline. Entry into the alliance transforms Alaska into a global airline, provides guests a seamless travel experience and increases the value of our loyalty and corporate travel offerings.
  • Finalized a previously announced amendment to the existing aircraft purchase agreement with Boeing to expand our total 737-9 MAX firm deliveries to 68 between 2021 and 2024, inclusive of 13 leased aircraft.
  • Took delivery of four 737-9 MAX aircraft during the first quarter.
  • Announced 12 new routes during the first quarter, aimed at offering our guests greater connectivity to and from West Coast destinations.
  • Announced plans to open a new Alaska Lounge in Terminal 2 of San Francisco International Airport.
  • Issued early recall notices to nearly 350 Alaska pilots on extended leaves to prepare for capacity growth.

Liquidity Updates:

  • Received $546 million through a combination of grants and loans from the U.S. Treasury under an extension of the PSP, and anticipate a supplemental payment of $80 million in late April.
  • Received notification from the U.S. Treasury that Alaska, Horizon and McGee are eligible to obtain an additional $584 million in incremental payroll support funding under a third round of the PSP.
  • Extended maturity of the 364-day Senior Secured Term Loan previously due to expire in March 2021 to March 2022, and in conjunction funded an incremental $54 million.

Sustainability Updates:

  • Published 2020 LIFT Sustainability Report including final data on our 2020 sustainability goals and Sustainable Accounting Standards Board disclosure, and shared new 2025 goals related to Environmental Social Governance.
  • Announced specific commitments for diversity, equity, and inclusion to increase diverse leadership representation, cultivate an inclusive culture, and to continue supporting education.
  • Set a course for net-zero carbon emissions by 2040, with 2025 milestone goals to be the most fuel-efficient U.S. airline, maintain carbon neutral growth, and cut ground service equipment climate emissions by 50%. As part of the net-zero commitment, joined The Climate Pledge alongside Amazon and other major businesses.
  • Announced a memorandum of understanding with SkyNRG focused on increasing the supply and production of sustainable aviation fuel from municipal solid waste and other waste streams, especially in the western United States.

Alaska Air Group Inc. today reported a first quarter 2021 GAAP net loss of $131 million, or $1.05 per share, compared to a net loss of $232 million, or $1.89 per share in the first quarter of 2020. Excluding the impact of payroll support program wage offsets, special items and mark-to-market fuel hedge adjustments, the company reported an adjusted net loss of $436 million, or $3.51 per diluted share, compared to an adjusted net loss of $102 million, or $0.83 per diluted share in 2020.

“This has been a long road, and I want to thank the employees at Alaska and Horizon for providing great guest service and everything they’ve done to get through the last challenging year and help us achieve positive cash flow in March,” said CEO Ben Minicucci. “We’re a big company, but still small enough that each person’s work makes a difference. We’re now laser focused on a return to profitability and growth, with aggressive cost control, optimal productivity across all our work groups, and the operational and financial discipline that Alaska is known for.”

The following table reconciles the company’s reported GAAP net loss per share (EPS) for the three months ended March 31, 2021 and 2020 to adjusted amounts.

Statistical data, as well as a reconciliation of the reported non-GAAP financial measures, can be found in the accompanying tables. A glossary of financial terms can be found on the last page of this release.

Alaska Airlines and its regional partners serve more than 120 destinations across the United States and to MexicoCanada and Costa Rica. The airline emphasizes Next-Level Care for its guests, along with providing low fares, award-winning customer service and sustainability efforts. On March 31, 2021Alaska became the 14th member of oneworld. With the global alliance and Alaska Airlines’ additional partners, guests can travel to more than 1,000 destinations on more than 20 airlines while earning and redeeming miles on flights to locations around the world. Learn more about Alaska at newsroom.alaskaair.com and blog.alaskaair.com. Alaska Airlines and Horizon Air are subsidiaries of Alaska Air Group (NYSE: ALK).

 

Given the unusual nature of 2020, we believe that some analysis of specific financial and operational results compared to 2019 provides meaningful insight. The table below includes comparative results from 2021 to 2019.

 

 

 

 

Note A: Pursuant to Regulation G, we are providing reconciliations of reported non-GAAP financial measures to their most directly comparable financial measures reported on a GAAP basis. We believe that consideration of these non-GAAP financial measures may be important to investors for the following reasons:

  • By eliminating fuel expense and certain special items (including the payroll support program wage offset, impairment and restructuring charges and merger-related costs) from our unit metrics, we believe that we have better visibility into the results of operations as we focus on cost-reduction initiatives emerging from the COVID-19 pandemic. Our industry is highly competitive and is characterized by high fixed costs, so even a small reduction in non-fuel operating costs can result in a significant improvement in operating results. In addition, we believe that all domestic carriers are similarly impacted by changes in jet fuel costs over the long run, so it is important for management (and thus investors) to understand the impact of (and trends in) company-specific cost drivers such as labor rates and productivity, airport costs, maintenance costs, etc., which are more controllable by management.
  • Cost per ASM (CASM) excluding fuel and certain special items, such as the payroll support program wage offset, impairment and restructuring charges and merger-related costs, is one of the most important measures used by management and by the Air Group Board of Directors in assessing quarterly and annual cost performance.
  • Adjusted income before income tax (and other items as specified in our plan documents) is an important metric for the employee incentive plan, which covers the majority of Air Group employees.
  • CASM excluding fuel and certain special items is a measure commonly used by industry analysts, and we believe it is the basis by which they have historically compared our airline to others in the industry. The measure is also the subject of frequent questions from investors.
  • Disclosure of the individual impact of certain noted items provides investors the ability to measure and monitor performance both with and without these special items. We believe that disclosing the impact of these items as noted above. Industry analysts and investors consistently measure our performance without these items for better comparability between periods and among other airlines.
  • Although we disclose our passenger unit revenues, we do not (nor are we able to) evaluate unit revenues excluding the impact that changes in fuel costs have had on ticket prices. Fuel expense represents a large percentage of our total operating expenses. Fluctuations in fuel prices often drive changes in unit revenues in the mid-to-long term. Although we believe it is useful to evaluate non-fuel unit costs for the reasons noted above, we would caution readers of these financial statements not to place undue reliance on unit costs excluding fuel as a measure or predictor of future profitability because of the significant impact of fuel costs on our business.

GLOSSARY OF TERMS

Adjusted net debt – long-term debt, including current portion, plus capitalized operating leases, less cash and marketable securities

Adjusted net debt to EBITDAR – represents net adjusted debt divided by EBITDAR (trailing twelve months earnings before interest, taxes, depreciation, amortization, special items and rent)

Aircraft Utilization – block hours per day; this represents the average number of hours per day our aircraft are in transit

Aircraft Stage Length – represents the average miles flown per aircraft departure

ASMs – available seat miles, or “capacity”; represents total seats available across the fleet multiplied by the number of miles flown

CASM – operating costs per ASM, or “unit cost”; represents all operating expenses including fuel and special items

CASMex – operating costs excluding fuel and special items per ASM; this metric is used to help track progress toward reduction of non-fuel operating costs since fuel is largely out of our control

Debt-to-capitalization ratio – represents adjusted debt (long-term debt plus capitalized operating lease liabilities) divided by total equity plus adjusted debt

Diluted Earnings per Share – represents earnings per share (EPS) using fully diluted shares outstanding

Diluted Shares – represents the total number of shares that would be outstanding if all possible sources of conversion, such as stock options, were exercised

Economic Fuel – best estimate of the cash cost of fuel, net of the impact of our fuel-hedging program

Load Factor – RPMs as a percentage of ASMs; represents the number of available seats that were filled with paying passengers

Mainline – represents flying Boeing 737, Airbus 320 and Airbus 321neo family jets and all associated revenues and costs

Productivity – number of revenue passengers per full-time equivalent employee

RASM – operating revenue per ASMs, or “unit revenue”; operating revenue includes all passenger revenue, freight & mail, Mileage Plan and other ancillary revenue; represents the average total revenue for flying one seat one mile

Regional – represents capacity purchased by Alaska from Horizon and SkyWest. In this segment, Regional records actual on-board passenger revenue, less costs such as fuel, distribution costs, and payments made to Horizon and SkyWest under the respective capacity purchased arrangement (CPAs). Additionally, Regional includes an allocation of corporate overhead such as IT, finance, other administrative costs incurred by Alaska and on behalf of Horizon.

RPMs – revenue passenger miles, or “traffic”; represents the number of seats that were filled with paying passengers; one passenger traveling one mile is one RPM

Yield – passenger revenue per RPM; represents the average revenue for flying one passenger one mile

Top Copyright Photo: Alaska Air Cargo (Alaska Airlines) Boeing 737-790 (F) WL N626AS (msn 30793) ANC (Michael B. Ing). Image: 951702.

Alaska Airlines aircraft slide show:

Alaska Airlines officially joins oneworld

Alaska Airlines has made this announcement:

Marking a milestone in its 89-year history, Alaska Airlines today (March 31) celebrated its first day as a member of oneworld. Alaska becomes the 14th full member of the global alliance, just eight months after receiving a formal invitation from oneworld in July 2020.

N487AS is the first to wear the oneworld livery at AS.

With safety protocols in place due to the pandemic, Alaska and oneworld hosted a virtual celebration and news conference today in Seattle, the airline’s hometown. Fellow airline members from around the world welcomed Alaska to the alliance with video greetings and provided versions of employees performing the Alaska Safety Dance (see below), briefly renamed the Global Safety Dance.

Effective today, all Alaska Mileage Plan members can earn miles when they fly any of the other 13 member airlines. Mileage redemption for flights on airlines that Alaska did not have previous partnerships with will occur in the coming months.

The 14 full members of oneworld are: Alaska Airlines; American Airlines; British Airways; Cathay Pacific Airways; Finnair; Iberia; Japan Airlines; Malaysia Airlines; Qantas; Qatar Airways; Royal Air Maroc; Royal Jordanian; S7 Airlines and SriLankan Airlines. Fiji Airways is a oneworld connect partner offering select alliance benefits to frequent flyers from any oneworld member airline traveling on their flights.

Video:

In other news from Horizon Air:

Alaska Airlines expands Pacific Northwest service with four new routes

Alaska Airlines has made this announcement:

With an eye on recovery and growth, Alaska Airlines continues to strengthen its Pacific Northwest connections with the announcement today of four new routes, which includes linking Boise to Chicago O’Hare and Austin and two new destinations from Seattle/Tacoma.

On June 17, 2021 Alaska will begin daily nonstop service between Boise and Chicago, and between Boise and Austin. Both routes will be flown year-round with Horizon Air’s Embraer 175 jet and its three-class cabin. With these new flights, Alaska will have 28 daily departures to 12 cities from Boise this year.

The flights between Idaho’s largest city to the Windy City will allow Alaska’s guests to connect to American Airlines’ domestic and international network. With Alaska joining American in the oneworld alliance on March 31, guests can expect a seamless travel experience.

Two new destinations are coming to Alaska’s schedule this summer: Idaho Falls, Idaho, and Redding, California. Both locations offer excellent outdoor opportunities, especially this summer as more and more travelers search for open spaces to spread their wings. Idaho Falls is the western gateway to Yellowstone and Grand Teton National Parks, and Redding in Northern California provides easy access to Mt. Shasta and the Redwoods.

The year-round service will connect both Idaho Falls and Redding to Seattle/Tacoma on Horizon’s Q400 turboprop aircraft starting on June 17. Idaho Falls currently does not have a year-round flight to any West Coast airport, and this new service will be the only nonstop flight between Seattle/Tacoma and Redding.

Start Date City Pair Frequency Aircraft
 June 17, 2021 Boise – Chicago O’Hare Daily E175
 June 17, 2021 Boise – Austin Daily E175
 June 17, 2021 Seattle – Idaho Falls Daily Q400
 June 17, 2021 Seattle – Redding Daily Q400

The new departures from Boise will be on the E175 aircraft.

Alaska Air Group reports fourth quarter 2020 and full-year results

Alaska Air Group has released its 4Q and 2020 financial results:

Financial Results:

  • Reported net loss for the fourth quarter and full year 2020 under Generally Accepted Accounting Principles (GAAP) of $430 million, or $3.47 per diluted share, and $1.3 billion, or $10.59 per diluted share. These results compare to fourth quarter 2019 net income of $181 million, or $1.46 per diluted share, and full year 2019 net income of $769 million, or $6.19 per diluted share.
  • Reported adjusted net loss for the fourth quarter and full year 2020, excluding payroll support program wage offsets, special items, and mark-to-market fuel hedging adjustments, of $316 million, or $2.55 per diluted share, and $1.3 billion, or $10.17 per diluted share. These results compare to fourth quarter 2019 adjusted net income of $181 million, or $1.46 per diluted share, and full year 2019 adjusted net income of $798 million, or $6.42 per diluted share.
  • Reported adjusted net debt of $1.7 billion, flat from December 2019 despite a 59% decline in operating revenues for the year.
  • Reported a debt-to-capitalization ratio, including certain short-term borrowings, of 61%.
  • Held $3.3 billion in unrestricted cash and marketable securities as of Dec. 31, 2020.

Liquidity and Fleet Updates:

  • Accessed approximately $5 billion in new liquidity in 2020, including $1.2 billion raised in the capital markets and approximately $600 million in bank financing.
  • Reached an agreement with the U.S. Treasury in January 2021 to receive an extension of payroll support totaling $533 million, $266 million of which was received on Jan. 15, 2021.
  • Extended the period available to draw funds under the CARES Act loan program from March 26, 2021 to May 28, 2021.
  • Announced plans to expand the mainline fleet and restructure the existing aircraft purchase agreement with Boeing. In total, Air Group will take delivery of 68 737-9 MAX aircraft between 2021 and 2024, inclusive of 32 previous purchase commitments and 13 aircraft to be leased from Air Lease Corporation. https://twitter.com/AlaskaAir/status/1341466170688466945?s=20
  • Took delivery of Alaska’s first 737-9 MAX aircraft on January 24, 2021, which is expected to enter revenue service on March 1, 2021.
  • Permanently removed an additional 20 Airbus A320 aircraft from the fleet in the fourth quarter, resulting in 40 Airbus aircraft removed in 2020. A total of 31 Airbus aircraft remain in the operating fleet as of the end of the year.
  • Held $3.4 billion in cash and marketable securities as of Jan. 22, 2021, and total liquidity of $5.2 billion.

Operational and Guest Safety Updates

  • Announced seven new routes in the fourth quarter, including three “fun and sun” destinations connecting Anchorage to Las Vegas, Denver and San Francisco, and expanded service from Southern California to Austin and New York.
  • Eliminated change fees and extended the flexible travel policy for tickets purchased through March 31, 2021.
  • Implemented Next-Level Care initiative, which includes more than 100 measures designed to create a safe experience for guests and employees.
  • Named the safest U.S. airline by AirlineRatings.com in their annual Top 20 Safest Airline report.
  • Launched the West Coast International Alliance with American Airlines on Jan. 1, 2021, which will unlock new benefits for Alaska Mileage Plan members in the spring.
  • Partnered with healthcare providers to offer rapid and standardized COVID-19 testing for those guests traveling to destinations that require a negative result.
  • Received diamond level certification from the Airline Passenger Experience Association for the health and safety standards Alaska and Horizon Air implemented to keep guests safe throughout their journey.
  • Launched pre-clearance program for guests traveling to the Hawaiian Islands from the West Coast with an approved negative COVID-19 test.
  • Announced a partnership with Microsoft to use sustainable aviation fuel to offset the environmental impact of certain business air travel.
  • Announced oneworld benefits for elite Mileage Plan members, providing tier status in the global alliance to Alaska’s elite members, as the company works toward joining oneworld on March 31, 2021.

Alaska Air Group Inc. today reported a fourth quarter 2020 GAAP net loss of $430 million, or $3.47 per diluted share, compared to net income of $181 million, or $1.46 per diluted share in 2019. Excluding the impact of payroll support program wage offsets, special items and mark-to-market fuel hedge adjustments, the company reported a fourth quarter adjusted net loss of $316 million, or $2.55 per diluted share, compared to adjusted net income of $181 million, or $1.46 per diluted share in the fourth quarter of 2019.

The company reported a full-year 2020 GAAP net loss of $1.3 billion, compared to net income of $769 million in the prior year. Excluding the impact of payroll support program wage offsets, special items and mark-to-market fuel hedge adjustments, the company reported an adjusted net loss of $1.3 billion, or $10.17 per diluted share for 2020, compared to adjusted net income of $798 million, or $6.42 per diluted share in 2019.

“We are not out of the woods, but we are seeing signs of brighter days ahead,” said Air Group CEO Brad Tilden. “The people of Alaska and Horizon have really shown their grit over the past year, and the rest of the leadership team and I could not be more proud of them. We’re positioned to come out of this crisis with our balance sheet unimpaired and our competitive advantages intact, and both of these set us up for a strong future and a long runway for growth.”