Alaska Airlines and Horizon Air 2009 Annual Report Download - page 137

HORIZON AIR
Horizon reported income before income taxes of
$22.8 million in 2009 compared to a loss of
$55.8 million in 2008. The improvement is
primarily due to declines in aircraft fuel costs
and non-fuel operating expenses, partially offset
by a $79.5 million decline in operating revenues.
Excluding the items noted in the table below,
Horizon would have reported income before
income taxes of $7.7 million in 2009 compared
to a loss before income taxes of $10.4 million in
2008. See the previous discussion under
“Adjusted Non-GAAP Earnings and Per-Share
Amounts” for additional information about these
non-GAAP measures.
Year Ended
December 31
(in millions) 2009 2008
Income (loss) before income taxes,
excluding items below .............. $ 7.7 $(10.4)
Fleet transition costs—CRJ-700 ........ —(13.5)
Mark-to-market fuel hedge adjustments . . 15.1 (23.4)
Realized losses on hedge portfolio
restructuring ..................... —(8.5)
Income (loss) before income taxes as
reported ......................... $22.8 $(55.8)
HORIZON REVENUES
During 2009, operating revenues decreased
10.8% compared to 2008. Horizon’s passenger
revenues are summarized in the following table:
Years Ended December 31
2009 2008
(dollars in millions) Revenues % ASMs Revenues % ASMs
Passenger revenue
from Horizon
“brand” flying . . . $381.9 59 $429.2 61
Revenue from
capacity
purchase
arrangements
(CPA) with
Alaska ........ 261.7 41 293.7 39
Total passenger
revenue and % of
ASMs ......... $643.6 100% $722.9 100%
Line-of-business information is presented in the table below. In the CPA, Horizon is insulated from
market revenue factors and is guaranteed contractual revenue amounts based on operational capacity.
As a result, yield and load factor information for the CPA arrangement are not presented.
Year Ended December 31, 2009
Capacity and Mix Load Factor Yield RASM
Actual
(in
millions)
%
Change
Y-O-Y
Current
%
Total Actual
Point
Change
Y-O-Y Actual
%
Change
Y-O-Y Actual
%
Change
Y-O-Y
Brand Flying .................. 1,927 (13.2) 59 72.4% 1.3 27.36¢ 0.6 20.38¢ 2.8
Alaska CPA ................... 1,365 (2.2) 41 NM NM NM NM 19.17¢ (8.9)
System Total ................. 3,292 (9.0) 100 73.1% 0.2 26.73¢ (2.6) 19.88¢ (2.0)
NM = Not meaningful
Passenger revenue from Horizon brand flying fell
$47.3 million, or 11.0%, on a 13.2% reduction in
brand capacity, partially offset by a 2.8%
improvement in unit revenue. The increase in
unit revenue is due to the slight improvements in
both load factor and ticket yield.
Revenue from CPA flying performed on behalf of
Alaska totaled $261.7 million during 2009
compared to $293.7 million during 2008. The
decrease is primarily due to a 2.2% reduction in
capacity provided under this arrangement and a
significant decline in the associated fuel cost,
which is reimbursed by Alaska. This revenue is
eliminated in consolidation.
41
ŠForm 10-K