Alaska Airlines and Horizon Air 2009 Annual Report Download - page 126

on May 1, 2010 and May 1, 2011 and will
participate in PBP. The flight attendants received
a bonus upon ratification of the contract totaling
$2.0 million in the aggregate.
In August 2009, Alaska and its aircraft
technicians reached an agreement on a two-year
contract extension. The extended contract, which
becomes amendable on October 17, 2011,
provides technicians with 1.5% pay scale
increases in October 2009 and 2010.
Technicians now also participate in PBP. The
technicians received a bonus upon ratification of
the contract totaling $1.3 million in the aggregate.
In December 2009, Alaska’s ramp service and
stores agents, represented by the IAM, ratified a
two-year extension of their collective bargaining
agreement, which will now become amendable
on July 19, 2012. This agreement includes
participation in PBP, a 1.5% pay increase in June
2010 and 2011, and a signing bonus of
approximately $0.5 million in the aggregate.
Alaska’s clerical, office and passenger service
employees (COPS), also represented by the IAM,
rejected a two-year extension proposal nearly
identical to the terms of the proposal ratified by
the ramp service employees and stores agents.
As a result, COPS employees are the only
remaining work group at Alaska, besides station
personnel in Mexico, that participate in a profit-
sharing plan other than PBP.
Horizon Labor Contracts
Horizon’s dispatchers, represented by the TWU,
ratified a new contract in July 2009, expiring in
October 2010. This contract includes a transition
from the former profit-sharing plan to PBP.
In December 2009, Horizon’s flight attendants,
represented by the AFA, ratified a new two-year
contract. The agreement includes participation in
PBP in 2009 and beyond, at least a 3% pay
increase over the life of the contract, and a
signing bonus of $0.3 million in the aggregate.
Historically, only a small percentage of
non-represented employees at Horizon
participated in the PBP plan. To better align the
incentive plans for this group with other Horizon
and Alaska employees, Horizon has also added
all remaining non-represented employees
(approximately 1,400 people) to the PBP plan in
2009.
Horizon is currently in negotiations with its pilots
and aircraft technicians. Horizon and the IBT
recently filed separate requests for assistance
for the NMB in the ongoing pilot contract
negotiations. Horizon’s aircraft technicians voted
in 2009 to be represented by the IBT. They were
previously represented by the Aircraft Mechanics
Fraternal Association. Horizon’s pilots and
mechanics remain in a profit-sharing plan
program other than PBP.
Horizon Fleet Transition
Horizon’s long-term goal is to transition to an
all-Q400 fleet. In the first quarter of 2009,
Horizon removed the final six Q200 aircraft from
operations. These aircraft were disposed of in
the last six months of 2009 and the related
lease agreements were terminated. We recorded
charges of $8.8 million in 2009 associated with
removing these aircraft from operation.
Although we have been actively pursuing various
alternatives to dispose of our 18 CRJ-700
aircraft in the most economically feasible way,
the current economic conditions have hindered
the remarketing efforts. As a result, the
transition to an all-Q400 fleet will be delayed and
we will continue to operate the CRJ-700 aircraft
in our operating fleet. We have successfully
deferred 2010 and 2011 Q400 deliveries into
future years to better manage our fleet size and
capacity plans.
New Mileage Plan Affinity Card Agreement
In June 2009, we revised our Mileage Plan
affinity credit card agreement with Bank of
America. This revised agreement enhances the
economics of our Mileage Plan program and
provides for, among other things, an increase in
the rate at which we sell miles to the bank. This
revised agreement was effective January 1,
2009 and expires on December 31, 2014.
First Bag Service Charge
In 2009, we joined nearly all major domestic
carriers in charging for a first checked bag. The
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