Alaska Airlines and Horizon Air 2010 Annual Report Download - page 120

OUR AIRCRAFT ARE AMONG THE MOST FUEL-EFFICIENT IN THEIR
RESPECTIVE CLASSES.
We believe that operating fuel-efficient aircraft is
the best hedge against high fuel prices. Alaska
operates an all-Boeing 737 fleet. Horizon is
currently undergoing a transition to an all-Q400
turboprop fleet, with expected completion in
2011. Because of these changes, Alaska’s fuel
burn expressed in available seat miles flown per
gallon (ASMs/g) improved from 65.9 ASMs/g in
2006 to 76.5 ASMs/g in 2010. Similarly,
Horizon’s fuel burn has improved from 51.7
ASMs/g in 2006 to 56.1 ASMs/g in 2010.
These reductions have not only reduced our fuel
cost, but also the amount of greenhouse gases
and other pollutants that our operations emit.
MARKETING AND COMPETITION
ALLIANCES WITH OTHER AIRLINES
We have marketing alliances with a number of
airlines that provide reciprocal frequent flyer
mileage credit and redemption privileges as well
as code sharing on certain flights as shown in
the table below. Alliances are an important part
of our strategy and enhance our revenues by:
• offering our customers more travel
destinations and better mileage credit/
redemption opportunities;
• giving our Mileage Plan program a
competitive advantage because of our
partnership with carriers from two major
global alliances (Oneworld and Skyteam);
• giving us access to more connecting traffic
from other airlines; and
• providing members of our alliance partners’
frequent flyer programs an opportunity to
travel on Alaska and Horizon while earning
mileage credit in our partners’ programs.
Most of our codeshare relationships are free-sell
codeshares, where the marketing carrier sells
seats on the operating carrier’s flights from the
operating carrier’s inventory, but takes no
inventory risk. Our marketing agreements have
various termination dates, and at any time, one
or more may be in the process of renegotiation.
Our marketing alliances with other airlines as of
December 31, 2010 are as follows:
Frequent
Flyer
Agreement
Codeshare—
Alaska
Flight # on
Flights
Operated by
Other Airline
Codeshare—
Other Airline
Flight # On
Flights
Operated by
Alaska/
Horizon
Major U.S. or
International Airlines
American Airlines/
American Eagle . . . Yes Yes Yes
Air France .......... Yes No Yes
British Airways ...... Yes No No
Cathay Pacific
Airways .......... Yes No Yes
Delta Air Lines/
DeltaConnection
(1) ............. Yes Yes Yes
Icelandair .......... Yes No Yes
KLM .............. Yes No Yes
Korean Air ......... Yes No Yes
Lan S.A. ........... Yes No Yes
Air Pacific (2) ....... Yes No Yes
Qantas ............ Yes No Yes
Regional Airlines
Era Alaska (2) ...... Yes Yes No
PenAir (2) .......... Yes Yes No
Kenmore Air (2) ..... Yes No No
(1) Alaska has codeshare agreements with the Delta
Connection carriers Skywest, ASA, Pinnacle, Mesaba,
Comair and Compass as part of its agreement with
Delta.
(2) These airlines do not have their own frequent flyer
program. However, Alaska’s Mileage Plan members can
earn and redeem miles on these airlines’ route systems.
COMPETITION
Competition in the airline industry is intense. We
believe the principal competitive factors in the
industry that are important to customers are:
• safety record and reputation,
• fares,
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