CPAs also include variable rent based on actual levels of flying, which is expensed as incurred. Financial arrangements of the CPAs include a fixed component, representing the costs to operate each aircraft and is capitalized under the new lease accounting standard. Remaining lease terms for CPA aircraft range from 8 years to 11 years. The agreement with PenAir does not contain a leasing arrangement, resulting in no asset or liability recognized. As Horizon is a wholly-owned subsidiary, intercompany leases between Alaska and Horizon have not been recognized under the standard. Under these agreements, Alaska pays the carriers an amount which is based on a determination of their cost of operating those flights and other factors intended to approximate market rates for those services. Alaska also has CPAs with SkyWest to fly certain routes in the Lower 48 and Canada, and with Peninsula Aviation Services, Inc., (PenAir) to fly certain routes in the state of Alaska. Horizon sells 100% of its capacity under a CPA with Alaska. Variable lease expense for aircraft was $1 million and $2 million for the three and six months ended June 30, 2019, respectively.Ĭapacity purchase agreements with aircraft (CPA aircraft)Īt June 30, 2019, Alaska had CPAs with three carriers, including the Company’s wholly-owned subsidiary, Horizon. While aircraft rent is primarily fixed, certain leases contain rental adjustments throughout the lease term which would be recognized as variable expense as incurred. As extension is not certain, and rates are highly likely to be renegotiated, the extended term is only capitalized when it is reasonably determinable. Remaining lease terms for these aircraft extend up to 12 years, with options to extend, subject to negotiation at the end of the term. Additionally, the Company operates 32 Embraer 175 (E175) aircraft through its capacity purchase arrangement with SkyWest Airlines, Inc. quarterly report to the United States Securities and Exchange Commission:Īt June 30, 2019, the Company had operating leases for 10 Boeing 737 (B737), 62 Airbus, and 9 Bombardier Q400 aircraft.
The Group also updated and outlined its fleet plans in the filing below: The expect changes are expected to occur in late 2019. Two Bombardier Q400 aircraft (above) that were previously removed from the operating fleet will be returning to revenue service. The Alaska Air Group has announced in its filing that t wo of the three Boeing 737-MAX 9 aircraft that were originally scheduled for delivery in 2019 have been shifted to 2020 in light of the recent MAX grounding, based on the best estimate of the expected delivery dates. Top Copyright Photo: Alaska Horizon (Horizon Air) Embraer ERJ 170-200LR (ERJ 175) N629QX (msn 17000683) PAE (Nick Dean). From Paine Field, guests can currently fly to eight destinations: Las Vegas Los Angeles Orange County, California Phoenix Portland, Oregon San Diego San Francisco and San Jose, California. As of late July, nearly 300,000 guests have flown Alaska’s flights at Paine Field.Īll Alaska flights at Paine Field are operated by Horizon Air with jet service using the Embraer 175 aircraft, which features a three-class cabin. Alaska started commercial service at Paine Field on March 4, 2019. In that short time, flying in and out of Everett has become a popular, convenient option for many travelers, especially those who live north of Seattle who don’t want to drive to Sea-Tac Airport.
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