From management this morning
Horizon 2018 fleet plan finalized
13 more E175s to be delivered, 15 Q400s to be retired
Nov. 29, 2017
As Horizon Air plans to resume E175 deliveries starting in March, it’s also time to say goodbye to our Q400s as we begin phasing some of our turboprops out of the fleet.
E175 deliveries will resume in March, with 13 jets scheduled to be delivered in 2018.
Currently, the fleet plan calls for the delivery of 13 more E175s and the retirement of 15 Q400s through 2018, leaving us with 37 Q400s and 23 E175 jets by the end of next year. With another 10 E175s scheduled to join the fleet in 2019, that would give us a fleet of 70 aircraft, 10 more than today. We also hold options for another 30 E175s. Future Horizon fleet needs and retirements beyond 2018 continue to be examined.
The retirement of some of our Q400s will provide a number of benefits:
Reduced maintenance costs: Despite much effort and many gains made in this area since bringing the aircraft on in 2001, the Q400 remains an expensive aircraft to maintain.
More service, more revenue: E175 jets will make up a large portion of the fleet, allowing Horizon to offer three classes of service and increase revenue.
Level playing field: We will be better matched with competitors, many of which are using multi-cabin jets in head-to-head markets that previously had only turboprops or smaller, single-class jets.
Younger fleet: More than half of our Q400s joined the fleet over a decade ago. The new fleet mix will bring an overall younger fleet.
“Generally, our bias will be to retire the older units, which includes scheduled lease returns,” says Jerry Gundlach, fleet and finance manager.
The 15 oldest Q400s in our fleet (N400-N414) are all leased, with the remaining 37 owned by Horizon. Those 15 leases will all expire in 2018. Some of those leases may be extended, and some we may let expire and return the Q400 to the lessor.
The company has hired a remarketing agent to help us find potential buyers for the owned aircraft. There are some countries that we can’t do business with due to U.S. sanctions, but for the most part, this will be a worldwide sales effort.
N418 and N419 were the first two Horizon Q400s to be retired. They were removed from the operating fleet last month and are currently parked at our Portland Ops Center.
Prep work involved
The first two retired Q400s, N418 and N419, were removed from the operating fleet last month. They’re currently parked at our Portland Ops Center.
“If a buyer doesn’t come forward soon, we’ll put them in storage in a dryer climate like Arizona or California,” says David Heath, managing director of engineering.
Retirement plan evolves
When Horizon’s “Commit to Compete” initiative was launched in 2015, the original plan was to eventually decrease the number of Q400s in our fleet by at least 20, starting in 2017, as we brought on regional jets. With the acquisition of Virgin America in 2016 (and corresponding need for more regional feeder traffic in California), that plan was revisited and the retirements were delayed.
Before any Q400s leave the fleet, Horizon’s Maintenance and Engineering team prepare the aircraft for sale. This includes a number of maintenance tasks, plus removing proprietary equipment and anything with the Horizon or Alaska logo, and collecting all aircraft records. The exterior logos will also be painted over, but not until the aircraft is set to go to its new owner.
“For aircraft we’re selling, we’ll move engines and props around so we avoid unnecessary maintenance costs on equipment we’re selling,” Heath says. “For the owned aircraft, we also want to make sure we don’t give away our best engines. For lease returns, the aircraft must meet all lease conditions, so there might be more maintenance tasks and we’ll need to put the original engine and props back on it.”
Aircraft that end up going to a dry storage program would also require a few preservation tasks ahead of such a move.
All of this prep work is done in addition to other necessary maintenance work on the rest of the fleet. The M&E team has budgeted roughly a month of out-of-service time for each aircraft before it’s officially removed from the fleet.