Tag Archives: Alaska Horizon (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:

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 to resume full schedule at Paine Field by spring 2022

"Honoring those who serve"

Alaska Airlines has made this announcement:

With increasing confidence that air travel is on a steady climb to return to pre-pandemic levels in the coming year, Alaska Airlines is planning to resume our full schedule of 18 daily nonstop departures at Paine Field-Snohomish County Airport by spring 2022, possibly earlier. The airport in Everett, north of Seattle, remains very popular with our guests.

As part of the path to recovery, we’ll have 13 daily departures at Paine Field later this fall – up from five now – as we bring back more destinations, increase flight frequencies and even add an exciting new route to Tucson, Arizona.

On June 17, Alaska will fly to five destinations from Everett: Las Vegas, Orange County, Phoenix, San Diego and San Francisco. Here’s more of what’s ahead at Paine Field:

  • On Sept. 8, we’ll jump to 11 daily departures to seven destinations as we add two flights a day to both Boise and Spokane, along with second daily flights to both Las Vegas and Phoenix.
  • On Oct. 7, we bring back our seasonal flight to Palm Springs.
  • On Nov. 19, we’ll launch our new seasonal service to Tucson, another popular getaway for wintertime warmth in the desert.

That means, just in time for the holiday travel season, Alaska will have 13 daily departures to nine destinations from the north Puget Sound airport that’s easy to get in and out of.

Horizon Air provides the all-jet service for our flights that serve Paine Field with the Embraer 175 aircraft, which features First Class and Premium Class, and only window and aisle seating – there are no middle seats. Guests can enjoy hundreds of free movies and TV shows available for viewing on personal devices; free texting on most flights; and Wi-Fi connectivity for purchase.

Top Copyright Photo: Alaska Horizon (Horizon Air) Embraer ERJ 170-200LR (ERJ 175) N651QX (msn 17000812) (Honoring those who serve) PAE (Nick Dean). Image: 947388.

Alaska Horizon aircraft slide show:

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 to grow its fleet by 30 aircraft, will add Belize City

First MAX 9 for Alaska Airlines, in service March 1, 2021 SEA-SAN

Alaska Airlines has made this announcement:

With recovery on the horizon, Alaska Airlines is taking advantage of strategic opportunities by adding 30 mainline and regional aircraft to fulfill capacity needs in the years ahead. And as more travelers search for additional leisure getaways, Alaska will begin flying to Belize City, Belize.

Growing the Alaska Air Group fleet

Alaska expects domestic travel to return to pre-COVID levels by the summer of 2022, which will require more aircraft across Air Group. To prime the airline for growth, Alaska is taking the following actions:

  • Adding 17 new Embraer 175 jets to the regional fleet in 2022 and 2023 – nine to be operated by Horizon Air and eight by SkyWest.
  • Exercising options for 13 Boeing 737-9 MAX deliveries in 2023 and 2024.

"Honoring Those Who Serve"

Above Copyright Photo: Alaska Horizon (Horizon Air) Embraer ERJ 170-200LR (ERJ 175) N651QX (msn 17000812) (Honoring those who serve) PAE (Nick Dean). Image: 947748.

The 17 regional aircraft additions grow Air Group’s regional fleet to 111 planes: 71 at Horizon and 40 with SkyWest. Horizon will receive its nine additional E175s in the next two years: five scheduled for delivery in 2022 and four in 2023. This is in addition to three existing firm E175 orders to be operated by Horizon. All eight SkyWest aircraft will enter service for Alaska in 2022.

Photo: Alaska Airlines. In order to fly the 737-9, pilots are required to take eight hours of flight simulator and computer-based training that focus on the operation of the MAX. The pilot training program for the MAX is more extensive than what’s required by the FAA.

Alaska announced a restructured agreement with Boeing in December 2020 to acquire 68 737-9 MAX aircraft between 2021 to 2024, with options for another 52 deliveries between 2023 and 2026. The airline will accept the first 13 options over two years: nine in 2023 and four in 2024.

Alaska adds Belize to its international destinations

Alaska also announced today new nonstop service to Belize City, Belize, in Central America from the West Coast. Belize will be the fourth country Alaska flies to from its West Coast hubs, joining Canada, Mexico and Costa Rica.

Routes and schedules to Belize will be announced when ticket sales begin in early June.

Video:

Top Copyright Photo: Alaska Airlines Boeing 737-9 MAX 9 N915AK (msn 44080) PAE (Nick Dean). Image: 947423.

Alaska Airlines aircraft slide show:

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 announces additional service from Monterey to San Diego

Alaska Airlines today announced a second nonstop flight between Monterey Regional Airport and San Diego, California beginning on September 9, 2020. The new flight will be in addition to the existing service Alaska provides between the two markets.

The new flight begins operation on September 9, 2020 and compliments the airlines existing daily flight between Monterey and San Diego. The flight will leave San Diego at 4:30 pm and will arrive Monterey at 5:58 pm. The flight to San Diego will leave Monterey at 6:40pm arriving San Diego at 8:03 pm.

The all-jet service between San Diego and Monterey will be provided by Alaska’s sister carrier, Horizon Air, flying the Embraer 175 aircraft featuring first class and premium class cabins. On the E175, every seat is either a window or an aisle seat, there are no middle seats. Guests will enjoy Wi-Fi connectivity, hundreds of free movies and TV shows that can be streamed on personal devices and free texting while onboard. It’s all part of Alaska’s award-winning service and focus on offering low fares and great value to our guests.

Alaska Horizon aircraft photo gallery:

Alaska to add Paine Field – Boise service

Alaska Airlines meanwhile will add new daily Everett (Paine Field) – Boise service on June 18, 2020.

The new route will be operated by Alaska Horizon.

Alaska Horizon aircraft photo gallery:

Current Alaska routes from PAE:

Alaska Airlines announces new service between Paine Field and Spokane

Alaska Horizon (Horizon Air) Embraer ERJ 170-200LR (ERJ 175) N629QX (msn 17000683) PAE (Nick Dean). Image: 947300.

Alaska Airlines announced today it will launch daily nonstop service between Spokane International Airport and Paine Field-Snohomish County Airport in Everett on November 4.

 

Spokane becomes the 10th destination served by Alaska at the new terminal in Everett.

Effective Date City Pair Departs Arrives Frequency Aircraft
Nov. 4, 2019 Everett-Spokane 7:55 p.m. 9:10 p.m. Daily E175
Nov. 5, 2019 Spokane-Everett 7:40 a.m. 8:55 a.m. Daily E175

Alaska started commercial service at Paine Field on March 4, 2019. In that short time, flying in and out of Everett has become a popular, convenient option for many travelers, especially those who live north of Seattle who don’t want to drive to Sea-Tac Airport. As of late July, nearly 300,000 guests have flown Alaska’s flights at Paine Field.

All Alaska flights at Paine Field are operated by Horizon Air with jet service using the Embraer 175 aircraft, which features a three-class cabin. From Paine Field, guests can currently fly to eight destinations: Las Vegas; Los Angeles; Orange County, California; Phoenix; Portland, Oregon; San Diego; San Francisco; and San Jose, California.

Top Copyright Photo: Alaska Horizon (Horizon Air) Embraer ERJ 170-200LR (ERJ 175) N629QX (msn 17000683) PAE (Nick Dean). Image: 947300.

Alaska Horizon aircraft slide show:

Alaska Air Group returns two Q400 to service due to the 737 MAX 9 delays

Alaska Horizon (Horizon Air) Bombardier DHC-8-402 (Q400) N447QX (msn 4364) SEA (Michael B. Ing). Image: 947263.

The Alaska Air Group has announced in its filing that two of the three Boeing 737-MAX 9 aircraft that were originally scheduled for delivery in 2019 have been shifted to 2020 in light of the recent MAX grounding, based on the best estimate of the expected delivery dates.

Two Bombardier Q400 aircraft (above) that were previously removed from the operating fleet will be returning to revenue service. The expect changes are expected to occur in late 2019.

The Group also updated and outlined its fleet plans in the filing below:

The Alaska Air Groups, Inc. quarterly report to the United States Securities and Exchange Commission:

At June 30, 2019, the Company had operating leases for 10 Boeing 737 (B737), 62 Airbus, and 9 Bombardier Q400 aircraft. Additionally, the Company operates 32 Embraer 175 (E175) aircraft through its capacity purchase arrangement with SkyWest Airlines, Inc. (SkyWest). Remaining lease terms for these aircraft extend up to 12 years, with options to extend, subject to negotiation at the end of the term. As extension is not certain, and rates are highly likely to be renegotiated, the extended term is only capitalized when it is reasonably determinable. While aircraft rent is primarily fixed, certain leases contain rental adjustments throughout the lease term which would be recognized as variable expense as incurred. Variable lease expense for aircraft was $1 million and $2 million for the three and six months ended June 30, 2019, respectively.

Capacity purchase agreements with aircraft (CPA aircraft)

At June 30, 2019, Alaska had CPAs with three carriers, including the Company’s wholly-owned subsidiary, Horizon. Horizon sells 100% of its capacity under a CPA with Alaska. Alaska also has CPAs with SkyWest to fly certain routes in the Lower 48 and Canada, and with Peninsula Aviation Services, Inc., (PenAir) to fly certain routes in the state of Alaska. Under these agreements, Alaska pays the carriers an amount which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates for those services. As Horizon is a wholly-owned subsidiary, intercompany leases between Alaska and Horizon have not been recognized under the standard. The agreement with PenAir does not contain a leasing arrangement, resulting in no asset or liability recognized.

Remaining lease terms for CPA aircraft range from 8 years to 11 years. Financial arrangements of the CPAs include a fixed component, representing the costs to operate each aircraft and is capitalized under the new lease accounting standard. CPAs also include variable rent based on actual levels of flying, which is expensed as incurred. Variable lease expense for CPA aircraft for the three and six months ended June 30, 2019 was not material.

As of June 30, 2019, the Company has one scheduled lease delivery of an A321neo aircraft remaining in 2019, valued at $52 million. We also had three scheduled lease deliveries of E175 aircraft in 2021 to be operated by SkyWest. Subsequent to June 30, 2019, the Company canceled these aircraft deliveries through an amendment to the capacity purchase agreement. All future lease contracts have remaining non-cancelable lease terms ranging from 2019 to 2033.

Aircraft purchase commitments include non-cancelable contractual commitments for aircraft and engines.

As of June 30, 2019, the Company had commitments to purchase 32 Boeing 737 MAX 9 aircraft, with deliveries in the remainder of 2019 through 2023. Future minimum contractual payments for these aircraft have been updated to reflect the most current anticipated delivery timing for Boeing 737 MAX 9 aircraft, which has been delayed as a result of the grounding order mandated by the FAA on March 13, 2019.

The Company also has commitments to purchase five E175 aircraft with deliveries in the remainder of 2019 through 2021 and has cancelable purchase commitments for 30 Airbus A320neo aircraft with deliveries from 2023 through 2025. In addition, the Company has options to purchase 37 B737 MAX aircraft from 2021 through 2024 and 30 E175 aircraft from 2021 through 2023. The Company also has the option to increase capacity flown by SkyWest with eight additional E175 aircraft with deliveries from 2021 to 2022.

Aircraft Commitments

As of June 30, 2019, we have firm orders to purchase or lease 41 aircraft. We also have cancelable purchase commitments for 30 Airbus A320neo with deliveries from 2023 through 2025. We could incur a loss of pre-delivery payments and credits as a cancellation fee. We also have options to acquire 37 B737 aircraft with deliveries from 2021 through 2024 and 30 E175 aircraft with deliveries from 2021 through 2023. In addition to the 32 E175 aircraft currently operated by SkyWest in our regional fleet, we have options in future periods to add regional capacity by E175 aircraft.

The following table summarizes expected fleet activity by year as of June 30, 2019, and are subject to change:

Top Copyright Photo: Alaska Horizon (Horizon Air) Bombardier DHC-8-402 (Q400) N447QX (msn 4364) SEA (Michael B. Ing). Image: 947263.

Alaska Horizon aircraft slide show: