Alaska Airlines and Horizon Air 2012 Annual Report Download - page 115

Alliances with Other Airlines
In October 2012, Delta Air Lines announced
expanded service to Asia through Seattle. Delta
will add a flight between Seattle and Shanghai
beginning in June 2013 and is proposing a flight
between Seattle and Tokyo-Haneda to begin in
March 2013. Through our existing codeshare
partnership, Delta is able to connect passengers
to more than 50 destinations on the Alaska
route network via Seattle. Increasing
international flow traffic will help support
Alaska’s continued capacity expansion in Seattle
and beyond.
In December 2012, we announced a new code-
sharing and frequent flier agreement with
Aeromexico. The new agreement will allow
Aeromexico and our customers the ability to
connect across 45 cities around Mexico and 11
countries in Central and South America. We also
announced enhanced frequent flier awards
benefits with Emirates, allowing members to
redeem awards for travel on each others’
programs in addition to earning miles on a
reciprocal basis as established when the
partnership began in March 2012.
In February 2013, we announced an expansion
of the existing code-share agreement with
American Airlines, allowing passengers from both
carriers greater access to their combined route
networks. New American code on our northern
California to Hawaii flights will continue to
support our growth in these markets. American
passengers will also find greater access to new
mid- and trans-continental flights on us, helping
build brand awareness and demand in many of
our newest destinations. Additionally, we will
code-share on 19 more American routes,
including 13 new destinations to which our
customers will be able to book travel through
alaskaair.com.
Update on Labor Negotiations
In July 2012, our ramp and stores agents,
represented by the International Association of
Machinists and Aerospace Workers (IAM), ratified
a six-year contract by a 91% margin before the
amendable date. The contract provides for an
initial wage increase of 2.5% followed by 1.5%
annual increases over the six-year term, and
contains important productivity improvements. It
also offers both the Company and our employees
the certainty that comes with a long-term deal.
In December 2012, we entered into a six-year
agreement with Horizon’s pilot union,
represented by the International Brotherhood of
Teamsters (IBT), for an extension of their
contract through December 2018. The deal is
mutually beneficial to both the company and our
pilots and calls for a signing bonus, wage step
increases and productivity gains over the term of
the contract. We also ratified a three-year
agreement with Horizon’s station personnel in
Vancouver and Victoria, represented by the
National Automobile, Aerospace, Transportation
and General Workers, in January 2013.
We are currently in negotiations with Alaska’s
and Horizon’s flight attendants, represented by
the Association of Flight Attendants (AFA), whose
contracts became amendable in April 2012 and
December 2011, respectively. In addition, we are
in early discussions with Alaska’s pilots,
represented by the Airline Pilots Association
(ALPA), whose contract is amendable in April
2013. We are also in negotiations with Horizon’s
maintenance store employees, represented by
IAM.
Stock Repurchase
In 2012, we repurchased 1,685,951 shares of
our common stock for $60 million under the
share repurchase plans authorized by our Board
of Directors. Since 2007, we have repurchased
18 million shares of common stock under such
programs for $320 million for an average price of
approximately $17 per share.
Outlook
Our primary focus every year is to run safe,
compliant and reliable operations at our airlines.
In addition to our primary objective, we will
remain focused on providing a hassle-free
experience for our customers. Specifically, we
plan to enhance mobile features and expand our
self-bag tagging capabilities. Additionally, as part
of our strategy of enhancing our brand, we are
considering ways to enhance the onboard
experience, such as seats, cabin layout, seat
power, and in-flight entertainment.
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