Alaska Airlines Earnings Call Becomes A Mid-2022 Update

Alaska Airlines’ recent earnings call has been a sharing of important news about the future of Alaska Airlines’ fleet, the power of Alaska Airlines’ Premium Class, and several topics about labor relations. We reflect on the most important elements of this update.

New horizons for Horizon Air

For Horizon Air, the future is now with more Embraer 175 jets and more capability coming on line.

Photo: Joe Kunzler | Simple Flying

A significant topic of the earnings call was the situation around Horizon Air, Alaska Airlines’ regional carrier. As Alaska Airlines’ Horizon Air goes full jet – now quite possibly sunsetting the mighty de Haviland of Canada Dash-8-400s (formerly Bombardier Q400s) by January 2023 – the airline will purchase more ERJ-175s to replace them.

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The Embraer 175s, as per the airline’s aircraft guide, has a range of 1,800 NM with a cabin of 52 economy seats, 12 premium class seats, and 12 first class seats for a total of 76. While the 12 first class passengers enjoy 20 ” wide seats, the others enjoy 18.2 “of width. The Brazilian-built regional jets fly at 495 mph (797 km / h) and have WiFi, unlike the Canadian-built Dash-8-400 turboprops they are replacing. Furthermore, a check of ch-aviation.com shows that Horizon Air has 30 active ERJ-175s with an average age of 4.2 years. There are 29 owned plus seven leased Dash-8-400s with an average age of 14.4 years at Horizon.


Although the de Haviland of Canada Dash-8-400 is popular with aviation enthusiasts like this author who recently reviewed a flight, the future of Alaska Airlines will be multi-class for better revenue returns per service. In that review, I noticed that the ERJ-175 flew higher and faster on the same route. Plus, CEO Ben Minicucci said on the call that having the regional airline use a “single fleet” of regional jets versus turboprops does help with pilot retention. Minicucci also said the national pilot shortage is most acutely felt at the regional airline level.

That said, as Joe Sprague, President of Horizon Air, stated on the earnings call;

There’s never been a better time in history to become an airline pilot. We’re seeing that interest in both horizon and Alaska with a strong applicant pool, and some things that we’re doing at the sort of the top end of the funnel to encourage people to come in into the industry. And there definitely is interest.

Alaska Airlines’ leaders reaffirm commitment to regional Horizon Air

CEO Ben Minicucci is clear about the importance of Horizon Air to Alaska Airlines: “Our regional network is critical to our success.”

Photo: Joe Kunzler | Simple Flying

CEO Ben Minicucci also underlined the point that Horizon Air is critical to Alaska Airlines’ business model, commenting,

Our regional network is critical to our success. So you know, all the Pacific Northwest markets we serve are just integral to our entire domestic network.

Shane Tackett – the airline’s Executive Vice President Finance and Chief Financial Officer – clearly stated, “

We’re committed to those communities – we have not exited a community yet. We don’t want to. “

Instead, the plan is to reduce Horizon service frequency and use some mainline / Alaska Airlines airplanes with bigger Boeing 737s until Horizon can sufficiently hire enough pilots to overcome the current shortage.

Airbus A320s and A321s are also to be released

The Airbus A320s of Alaska Airlines won’t be making that many more touches for the airline.

Photo: Joe Kunzler | Simple Flying

It’s worth noting also that Alaska Airlines ‘Airbus A320s and A321s, left over from its acquisition of Virgin America, are still on glide slope to be released from Alaska Airlines’ mainline fleet. The A320s will start retiring in the fourth quarter of 2022, with the higher capacity A321s expected to fly for Alaska Airlines through 2023. This will help Alaska Airlines go to a single fleet of different types of Boeing 737s for lower overhead costs and better pilot retention .


Alaska Airlines did receive nine Boeing 737-9 MAX aircraft in the second quarter, bringing the total number of 737-9 MAX jets to 28. Simple Flying reviewed Alaska Airlines 737-9 MAX Premium premium class and first class in April.

Alaska Airlines is renovating its 737-800s

Alaska Airlines will be renovating their 737-800s

Photo: Joe Kunzler | Simple Flying

Alaska Airlines fleet recently noted that it is renovating its Boeing 737-800 fleet. According to ch-aviation.com, it currently has 57 active and four inactive jets with an average age of 14.3 years. The airline confirmed the renovation will replace one of three rear lavatories with three additional seats to bring the 737-800 up to industry standard 120 economy seats instead of the 117 economy seats now on Alaska Airlines aircraft.

The 737-800s will retain 30 premium and 12 first class seats post-renovation. Nonetheless, Alaska Airlines’ flight attendants shared on their Association of Flight Attendants (AFA) union blog concerns voiced to management about “excessively long lavatory lines” which “will be exacerbated by the upcoming removal of the third aft lavatory on the 737-800s. “

Premium Class is a win for Alaska Airlines

Premium class on Alaska Airlines is taking the airline’s finances to new places, especially as the regional partner gets more ERJ-175s as pictured here to provide premium class & first class seating.

Photo: Joe Kunzler | Simple Flying

For Alaska Airlines, premium class is a source of revenue growth as the airline recovers customers. According to the earnings call, both first class and premium class revenues were up 30%, with the premium class about a quarter of the airline’s total seats – and that’s before a complete transition from the single-class de Haviland Dash-8-400 ( Q400) to the Embraer ERJ-175 that has premium class plus first-class seating.

Pilot negotiations will conclude ‘at market’

Alaska Airlines management pledges to pay her pilots market rate, including these two Embrarer ERJ-175LR pilots.

Photo: AvgeekJoe Productions

When Jamie Baker of JPMorgan asked Alaska Airlines for comment on ongoing pilot negotiations, Tackett responded,

We are at the table regularly, almost weekly. With our pilots, we’re looking forward to getting a TA with them as soon as we can. Yeah, we understand the economic impact on the business, and it’s totally fine. Our employees across both companies need to be at market. And that’s where we’re ultimately going to take, take folks.

TA is a Tentative Agreement, tentative as the pilot’s union would have to ratify. The pilots union reported on their latest podcast that negotiations are “making progress” in several key areas.

Furthermore, in a general statement on US airlines’ recent success, Air Line Pilots Association (ALPA) President Joe DePete said,

“Now it is time for airline managements to recognize the sacrifices pilots made — and the support they received — and come to the negotiating table with meaningful compensation, quality of life, and career-progression enhancements.”

Uncertainty about implementing California work rules, but …

The potential imposition by the US state of California on Alaska Airlines flight attendants is far from being resolved.

Photo: Alaska Airlines

When asked during the earnings call about the incoming California work rules, Alaska Airlines executives like Tackett felt that “We need to figure out what happens next” for cabin crew. But Sara Nelson, President of the AFA, issued a statement on the work rules situation commenting,

It’s really simple. Flight Attendants need to eat during the course of their work day. We are human and we have basic needs like every other worker. We also know the realities of aviation and there’s no reason we can’t come to an agreement with the airlines for a legislative technical fix that allows airlines to comply with California meal and rest rules while maintaining the operation. We are ready to resolve this, and we hope they will get serious with us about doing that now too.

During the call, Alaska Airlines CEO Ben Minicucci did say, “We’re going slow on that.” Simple Flying will keep tabs on developments knowing this could change the future of Alaska Airlines ‘service and dramatically increase airlines’ costs.

What are your views on these developments from the earnings call? Please share in the comments.

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