Alaska Airlines and Horizon Air 2014 Annual Report Download - page 106

public perception of our airline. Vendor bankruptcies, unionization, regulatory compliance issues or
significant changes in the competitive marketplace among suppliers could adversely affect vendor
services or force us to renegotiate existing agreements on less favorable terms. These events could
result in disruptions in our operations or increases in our cost structure.
Our operations are often affected by factors beyond our control, including delays, cancellations, and
other conditions, which could harm our business, financial condition and results of operations.
Like other airlines, our operations often are affected by delays, cancellations and other conditions
caused by factors largely beyond our control.
Other conditions that might impact our operations include:
‰lack of a national airline policy;
‰lack of operational approval (e.g. new routes, aircraft deliveries, etc.) due to government
shutdown;
‰congestion at airports or air traffic control problems;
‰adverse weather conditions;
‰increased security measures or breaches in security;
‰contagious illness and fear of contagion;
‰international or domestic conflicts or terrorist activity; and
‰other changes in business conditions.
Due to our concentration of flights in the Pacific Northwest and Alaska, we believe a large portion of our
operation is more susceptible to adverse weather conditions. A general reduction in airline passenger
traffic as a result of any of the above-mentioned factors could harm our business, financial condition
and results of operations.
STRATEGY
The airline industry is highly competitive and susceptible to price discounting and changes in
capacity, which could have a material adverse effect on the Company. If we cannot successfully
compete in the marketplace, our business, financial condition and operating results will be materially
adversely affected.
The U.S. airline industry is characterized by substantial price competition. In recent years, the market
share held by low-cost carriers has increased significantly and is expected to continue to increase.
Airlines also compete for market share by increasing or decreasing their capacity, including route
systems and the number of markets served. Several of our competitors have increased their capacity in
markets we serve, particularly on the West Coast, therefore increasing competition for those
destinations. This increased competition in both domestic and international markets may have a
material adverse effect on the Company’s results of operations, financial condition or liquidity.
We continue to strive toward aggressive cost-reduction goals that are an important part of our business
strategy of offering the best value to passengers through competitive fares while achieving acceptable
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