Alaska Airlines and Horizon Air 2013 Annual Report Download - page 132
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CONTRACTUAL OBLIGATIONS AND COMMITMENTS
Aircraft Purchase Commitments
Overall, we have firm orders to purchase 69 aircraft. We have options to acquire 62 additional B737
aircraft and options to acquire 7 Q400 aircraft.
The following table summarizes aircraft purchase commitments by year, as of February 13, 2014:
Actual Fleet Count Expected Fleet Activity
Aircraft
Dec 31,
2012
Dec 31,
2013
2014
Changes
Dec 31,
2014
2015
Changes
Dec 31,
2015
B737 Freighters & Combis ............... 6 6 — 6 6
B737 Passenger Aircraft ................. 118 125 3 128 1 129
Total Mainline Fleet ................. 124 131 3 134 1 135
Q400 ................................ 48 51 — 51 — 51
Total ............................. 172 182 3 185 1 186
For future firm orders and if we exercise our
options for additional deliveries, we may finance
the aircraft through internally generated cash,
long-term debt, or lease arrangements.
Future Fuel Hedge Positions
We use both call options for crude oil forwards and swap agreements for jet fuel refining margins to
hedge against price volatility of future jet fuel consumption. We have refining margin swaps in place for
approximately 50% of our first quarter 2014 estimated jet fuel purchases at an average price of 70
cents per gallon. Our crude oil positions are as follows:
Approximate
%of
Expected
Fuel
Requirements
Weighted-Average
Crude Oil Price
per Barrel
Average
Premium
Cost per
Barrel
First Quarter 2014 .................................. 50% $103 $9
Second Quarter 2014 ................................ 50% $103 $8
Third Quarter 2014 .................................. 44% $103 $8
Fourth Quarter 2014 ................................. 33% $104 $7
Full Year 2014 ................................. 44% $103 $8
First Quarter 2015 .................................. 28% $104 $7
Second Quarter 2015 ................................ 22% $103 $6
Third Quarter 2015 .................................. 17% $106 $5
Fourth Quarter 2015 ................................. 11% $106 $5
Full Year 2015 ................................. 19% $104 $6
First Quarter 2016 .................................. 6% $105 $4
Full Year 2016 ................................. 1% $105 $4
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