Alaska Airlines and Horizon Air 2010 Annual Report Download - page 12
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ŠAnd finally – costs. Alaska’s
non-fuel unit costs have declined
from 8.73 cents in 2001 to 7.85
cents in 2010. In fact, we
reduced unit costs more than any
other major domestic airline in
2010. However, we know we’re
not done. Customers want low
fares, and to have low fares, we
must have low costs.
Alaska Airlines Mainline Unit Costs*
7.00¢
7.50¢
8.00¢
8.50¢
8.73¢
8.52¢
8.34¢
7.92¢
7.90¢
7.76¢
7.50¢
7.49¢
8.26¢
7.85¢
7.60¢
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011 Guidance
9.00¢
* Represents costs per available seat mile, excluding fuel and special items.
A LOOK AHEAD
In 2011, we will make two major changes at Horizon. First, our transition to an all-Q400 fleet is
becoming a reality as we are scheduled to be out of the remaining 13 CRJ-700 aircraft by June of this
year. And second, effective January 1, we moved to an industry-standard capacity purchase model
where Alaska purchases all of Horizon’s capacity. We will phase out the Horizon external brand and put
the Eskimo on the tail. This was a difficult decision
because we recognize the strength of the
Horizon brand in our home region – the Pacific
Northwest – and our employees’ pride in the
30-year-old brand. We believe that putting our
resources behind a single brand will ultimately
strengthen the Alaska brand, eliminate duplicate
marketing efforts, increase efficiency and
enhance our profitability.
Air Group Ancillary Revenue per Passenger
2005 2006 2007 2008 2009 2010
$0
$2
$4
$6
$8
$10
$12
$14
$3.60
$4.34 $4.60
$5.76
$8.76
$11.55
In 2011, we will keep our focus on increasing
revenues. In addition to tailoring capacity to
match demand and optimizing our fare levels, we
will continue to enhance our ancillary offerings,
such as hotel and car bookings. Just last week,
we rolled out a redesigned alaskaair.com Web
site that will make booking your entire trip
easier. And speaking of ancillary revenues, we’ve
shown great improvement over the past several
years in that area going from $3.60 per
passenger in 2005 to $11.55 per passenger in
2010.