Alaska Airlines and Horizon Air 2009 Annual Report Download - page 127

$15 service charge began July 7, 2009. This fee
does not apply to our MVP or MVP Gold Mileage
Plan members, for those traveling solely with the
state of Alaska, or for certain other passengers.
This service charge generated $47.4 million of
incremental revenue in the last six months of
2009.
New Baggage Service Guarantee
Concurrent with the first bag service charge, we
introduced a guarantee to compensate
passengers if their bags are not at the baggage
claim within 25 minutes after their flight parks at
the gate. Passengers have the choice of 2,500
Mileage Plan miles or a $25 voucher that can be
used on a future flight. This guarantee is for all
passengers with luggage, including those not
subject to the bag service charge. We believe
that we are the only airline that offers this
guarantee to customers. To date, the cost of
providing this guarantee has been minimal as
our baggage performance has been excellent.
New Markets
In 2009, Alaska added several new cities and
non-stop routes to our overall network. Those
new routes are:
New Non-Stop Routes Frequency Start Date
Between Bellingham, Wash. and
Las Vegas ................ 4xweekly 6/25/2009
Between Portland, Ore. and
Maui .................... Daily 7/3/2009
Between Seattle and Austin,
Tex. ..................... Daily 8/3/2009
Between San Jose and
Austin ................... Daily 9/2/2009
Between Seattle and
Houston ................. Daily 9/23/2009
Between Seattle and Atlanta . . . Daily 10/23/2009
Between Oakland, Calif. and
Maui .................... 4xweekly 11/9/2009
Between Oakland and Kona .... 3xweekly 11/10/2009
Service between Portland and
Chicago ................. Daily 11/16/2009
Horizon also announced expanded seasonal
service to Mammoth Lakes, Calif. from San Jose,
Reno, Seattle and Portland. The flights will
operate from December 17, 2009 to April 11,
2010.
Stock Repurchase
In June 2009, our Board of Directors authorized
the Company to repurchase up to $50 million of
our common stock, at which time the stock price
was $15.60. Through December 31, 2009, we
had repurchased 1,324,578 shares of common
stock for approximately $23.8 million under this
program. This program expires in June 2010.
Outlook
Our primary focus every year is to run safe,
compliant and reliable operations at our airlines.
In addition to our primary objective, in 2010 our
key initiative is to maintain our focus on
optimizing revenue. Our specific focus will be on
the way we merchandise fares and ancillary
products and services, as well as broader
employee involvement in our marketing efforts.
In addition to the focus on revenue, both of our
airlines have initiatives under way designed to
reduce costs. Alaska is focused on improving
productivity and controlling overhead. Horizon
aims to reduce maintenance costs and pilot
labor costs.
Our fourth quarter 2009 revenue performance
marked the first quarter-over-quarter
improvement in the top line in 2009, providing a
solid outlook as we move into 2010.
For the first quarter, our advance booked load
factors are up significantly at both Alaska and
Horizon, although we expect the higher load
factors, which were driven by deep price
discounting, will be offset by a decline in yields,
resulting in only modest unit revenue increases
in the first quarter.
RESULTS OF OPERATIONS
2009 COMPARED WITH 2008
Our consolidated net income for 2009 was
$121.6 million, or $3.36 per diluted share,
compared to a net loss of $135.9 million, or
$3.74 per share, in 2008. Items that impact the
comparability between the periods are as
follows:
• Both periods include adjustments to reflect
timing of gain and loss recognition resulting
from mark-to-market fuel hedge accounting.
For 2009, we recognized net mark-to-market
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ŠForm 10-K