Alaska Airlines and Horizon Air 2010 Annual Report Download - page 150

HORIZON AIR
Horizon reported pretax income of $7.6 million in
2010 compared to pretax income of $22.8
million in 2009. The decline in earnings is
primarily due to higher aircraft fuel expense and
higher restructuring and fleet transition costs,
partially offset by an increase in operating
revenue.
Excluding the items noted in the table below,
Horizon would have reported pretax income of
$22.8 million in 2010 compared to $7.7 million
in 2009. 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) 2010 2009
Income before income taxes, excluding
items below ..................... $ 22.8 $ 7.7
Fleet transition costs—CRJ-700 ....... (13.2) —
Mark-to-market fuel hedge
adjustments ..................... (2.0) 15.1
Income before income taxes as
reported ........................ $7.6 $22.8
HORIZON REVENUES
During 2010, operating revenues increased 3.9%
compared to 2009. Horizon’s passenger
revenues are summarized in the following table:
Years Ended December 31
2010 2009
(dollars in millions) Revenues % ASMs Revenues % ASMs
Passenger revenue
from Horizon
“brand” flying .... $394.5 59 $381.9 59
Revenue from
capacity purchase
arrangements
(CPA) with
Alaska .......... 274.4 41 261.7 41
Total passenger
revenue and % of
ASMs ........... $668.9 100% $643.6 100%
Line-of-business information is presented in the table below. Beginning January 1, 2011, all of the flying
performed by Horizon will be under a CPA arrangement with Alaska.
Year Ended December 31, 2010
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 .......... 1,797 (6.7) 56 74.4% 2.0 29.51¢ 7.8 22.58¢ 10.8
Alaska CPA .......... 1,438 5.3 44 NM NM NM NM 19.08¢ (0.5)
System Total ......... 3,235 (1.7) 100 75.7% 2.6 27.30¢ 2.1 21.02¢ 5.7
NM = Not Meaningful
Passenger revenue from Horizon brand flying
increased $12.6 million, or 3.3%, on a 10.8%
increase in passenger unit revenues, partially
offset by a 6.7% decline in brand capacity. The
increase in unit revenue is due to a 2.0-point
improvement in load factor and a 7.8% increase
in ticket yield.
Revenue from CPA flying performed on behalf of
Alaska totaled $274.4 million during 2010
compared to $261.7 million during 2009. The
increase is primarily due to a 5.3% increase in
capacity provided under this arrangement. This
revenue is eliminated in consolidation.
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