Alaska Airlines and Horizon Air 2014 Annual Report Download - page 110
Download and view the complete annual report
Please find page 110 of the 2014 Alaska Airlines and Horizon Air annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65
-
66
-
67
-
68
-
69
-
70
-
71
-
72
-
73
-
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100 -
101 -
102 -
103 -
104 -
105 -
106 -
107 -
108 -
109 -
110 -
111 -
112 -
113 -
114 -
115 -
116 -
117 -
118 -
119 -
120 -
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
-
140
-
141
-
142
-
143
-
144
-
145
-
146
-
147
-
148
-
149
-
150
-
151
-
152
-
153
-
154
-
155
-
156
-
157
-
158
-
159
-
160
-
161
-
162
-
163
-
164
-
165
-
166
-
167
-
168
-
169
-
170
-
171
-
172
-
173
-
174
-
175
-
176
-
177
-
178
-
179
-
180
-
181
-
182
-
183
-
184
-
185
-
186
-
187
-
188
-
189
-
190
-
191
-
192
-
193
-
194
-
195
-
196
 |
 |
LABOR RELATIONS AND LABOR STRATEGY
A significant increase in labor costs, unsuccessful attempts to strengthen our relationships with
union employees, or loss of key personnel could adversely affect our business and results of
operations.
Labor costs are a significant component of our total expenses, accounting for approximately 41%, 42%
and 42% of our non-fuel operating expenses in 2014, 2013 and 2012, respectively. Each of our
represented employee groups has a separate collective bargaining agreement, and could make
demands that would increase our operating expenses and adversely affect our financial performance if
we agree to them. The same result could apply if we experience a significant increase in vendor labor
costs that ultimately flow through to us.
As of December 31, 2014, labor unions represented approximately 83% of Alaska’s and 48% of
Horizon’s employees. Although we have been successful in maturing communications, negotiating
approaches, and other strategies to enhance workforce engagement in the Company’s long-term vision,
future uncertainty around open contracts could be a distraction, affecting employee focus in our
business and diverting management’s attention from other projects and issues.
We compete against the major U.S. airlines and other businesses for labor in many highly skilled
positions. If we are unable to hire, train and retain qualified employees at a reasonable cost, sustain
employee engagement in the Company’s strategic vision, or if we are unsuccessful at implementing
succession plans for our key staff, we may be unable to grow or sustain our business. In recent years,
there have been pilot shortages in the regional market. Attrition beyond normal levels could negatively
impact our operating results and our business prospects could be harmed.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None
ITEM 2. PROPERTIES
AIRCRAFT
The following table describes the aircraft we operate and their average age at December 31, 2014:
Aircraft Type Seats Owned Leased Total
Average
Age in
Years
B737 Freighters & Combis 0/72 6 – 6 21.2
B737-400/700 144/124 17 18 35 16.9
B737-800/900/900ER 163/181/181 86 10 96 6.1
Total Mainline Fleet 109 28 137 9.5
Q400 76 36 15 51 8.1
CRJ-700(a) 70 2 6 8 12.3
Total Regional Fleet 38 21 59 8.7
Total 147 49 196 9.3
(a) We also have eight leased CRJ-700s currently subleased to a third party to be operated for other carriers.
26