Friday April 25, 2008

Alaska Air Group, parent of Alaska Airlines and Horizon Air, reported a $35.9 million first-quarter loss that deepened from a $10.3 million deficit in the year-ago period.

Excluding the effect of mark-to-market fuel hedge accounting, AAG lost $36.3 million compared to $15.8 million last year. Chairman and CEO Bill Ayer said the company "is in a good position relative to the rest of the industry," but that "high fuel prices are eroding our profits and revenues are not increasing enough to offset them."

Among the "range of actions" the company will take will be to eliminate Horizon's fleet of 20 CRJ700s in addition to its already-announced decision to part with 12 remaining Q200s and transition to a fleet composed entirely of Q400s within two years. It will fly at least 48 of the type and still holds 20 purchase options with Bombardier.

"The Q400 is the best aircraft for the majority of our markets," Horizon President and CEO Jeff Pinneo said. "Simplifying to a single fleet of Q400s will result in increased fuel efficiency, plus substantially reduced costs for aircraft maintenance, spare parts and pilot and mechanic training." AAG said "some workforce reductions" will accompany the transition.

It has been interesting to see that the Canadian carriers haven't seemed as effected by high fuel costs as their American counterparts but I think this will only be temporary.

F-16 wrote:The 190/195 is a mainline aircraft - think 737-200/DC-9, etc.

F-16 wrote:ozguy,

Hmmm, more than just AC run the EMB's at mainline...

The 190/195 is a mainline aircraft - think 737-200/DC-9, etc.

PC12flyer wrote:Given that Horizon is making the transition to an all turbo-prop fleet and many of the American regional players are looking at needing to make drastic changes to stay alive as the American airline industry under goes a major facelift(i.e. mergermania).

The question becomes since Air Canada Jazz is flying around 57 of the CRJ 100/200's and 16 CRJ 705's when will Air Canada either force Jazz to modify the fleet into Dash 8-400's or replace a majority of the fuel inefficient CRJ's with more used Dash 8 100's and 300's. Or would Air Canada just change their business model slightly by adding larger aircraft (eg//EMB190's) to good routes thus keeping capacity but reducing frequency in order to save money.

It has been interesting to see that the Canadian carriers haven't seemed as effected by high fuel costs as their American counterparts but I think this will only be temporary. Air Canada is currently stuck in having to pay for 133 Jazz aircraft under the CPA. It will be very interesting to see what changes are made to ensure continued profitability as the two companies renegotiate the aircraft rates this year.

prop2jet wrote:Rudder: Jet Blue operates the E190 and I believe was in fact the launch customer for this type.

prop2jet wrote:Rudder: Jet Blue operates the E190 and I believe was in fact the launch customer for this type. As mentioned it will be a cold day in hell before anything the size of an E190 makes it's way under the CPA with AC.

PC12: The decision to operate the CRJ's is not that of Jazz but AC. AC "owns" or if you prefer controls the aircraft in question. Any fleet renewal at Jazz will be a function of what AC wants. I do not think that losing CRJ's at Jazz should be a big deal, they are obviously no longer cost effective. The Q400 or additional 705's would be a better arrangement.

In an ideal world, AC would drop the E175's, Jazz would get more 705's and Q400's.

prop2jet wrote:
The high frequency flights into the New York area are already far from full, but the New York passengers ... well, lets just say they are a bit more fussy about stepping into a turboprop no matter how good or quiet an airplane it is. The 175 is needed at AC.
Of course the next step is the 195. A little less range than the 190 but more seats. Once AC starts to return the 319s I think AC will start to acquire the 195 via their options.
Yes, the Q400 is an amazing plane, in the end I'd envision Jazz flying the Q400 only, all jets at AC, and NO CRJ anywhere.

... and if Jazz is going to fly Q400's, they'd better get in line. There's a 3+ year backlog on deliveries... and that's before Horizon announced their plans to switch to an all Q400 fleet.

ozguy wrote:Foreget the dash a/c all together.

(Mightymouse), who posted JAZZ should only fly "q400's and NO CRJ'S." I have a better idea, how about Jazz fly all crj's 700/705/900/1000. Let the Dash 8's go to Georgian or CMA or Pasco....

I hate the prententious and self righteous attitude of some of the AC people. This industry is so sleasy sometimes. Professionalism you would think would be a given, however its few and far between. Big kids in a sandbox.

I believe that the legacy carriers are waiting for either the C-series or a next-gen 100 seater from either Boeing or Airbus. Both still many years away.

Rudder,

US Airways (a legacy carrier) operates the EMB190/5 at the mainline.

I've got an even better idea, why not cut Jazz out altogether and let georgian/CMA fly the crj, after they've done that for a while they can then have all the 320's 767,787, and the 777's. A race to the bottom where the cheapest labour wins and a 777 captain makes $75,000/year.

This BS has to stop somewhere and the line in the "sandbox" will be drawn with the 175/190.

Localizer wrote:

Ummmmm ... The Boeing 717? ... Is that the big Next-Gen 100 seater from Boeing that is still many years away? Because it is Next-Gen and 100 seats .. but its alreay in the past?


I don't really know if i'd call US Airways a "Legacy Carrier" anymore considering they are now owned by a LLC? Also those E190's they have came from the merger with America West ... So i'd say we're back to there being only one "Legacy Carrier" flying the E190 ... Oh and just for the sake of it Embraer on there website refers to the 175, 190 as Regional Jets.


Cheers ...

Loc