Alaska’s Horizon swings to profit amid regional jet shift

Aviation

Alaska Air Group says it has straightened out problems at regional subsidiary Horizon Air, which in recent years suffered labour strife, operational snarls and an acute pilot shortage.

Horizon is again posting profits following a management overhaul and a fleet transition that has seen the unit divest Bombardier turboprops while acquiring Embraer regional jets.

“Momentum is building at Horizon,” Alaska chief executive Brad Tilden said on 24 January. “I think the turnaround of Horizon has been stunning.”

“Our on-time performance was the best in the regional industry last year,” he adds, speaking during an earnings call.

Horizon earned a $27 million profit in 2018, a reversal from its $8 million loss one year earlier. The 2017 loss largely stemmed from a jump in expenses related to flight cancellations, pilot training and a new pilot contract.

Those troubles became evident in early 2017, when a pilot shortage caused the airline to cancel flights and delay delivery of some E175s.

Pilots union International Brotherhood of Teamsters and its affiliate Airline Professionals Association also sued the company for paying bonuses to newly hired pilots and for transitioning incoming Embraer 175s to regional partner SkyWest Airlines, actions the union said violated its contract.

Alaska responded to Horizon’s operational troubles by stepping up pilot hiring and moving some Horizon operations from Portland to Seattle, where Alaska is based. Alaska also replaced former Horizon chief executive David Campbell with current head Gary Beck.

Horizon has since continued transitioning from a turboprop-heavy fleet toward a fleet equally composed of turboprops and regional jets.

The carrier now operates 26 E175s and 39 Bombardier Q400s, but by the end of 2019 plans to operate 30 E175s and 30 Q400s, according to Tilden.

By comparison, Horizon’s fleet included only 52 Q400s two years ago, Flight Fleets Analyzer shows.