Horizon Airlines, a subsidiary of Alaska Airlines (ALK), posted a $12.2 million operating income on $556.4 million in operating revenues for 2006. Operating income was down significantly over the $29.5 million in the year-ago period. However, the operating revenues represented a 15.7 percent gain.

Alaska is changing the way it reports Horizon's earnings in an effort to mirror the reporting of capacity purchase agreements posted by other airlines. It expects to issue a white paper on the subject in February. The move, it said, was being done to recognize Horizon's size and to move the revenue and expenses "to the people who are responsible for them." It denied it was part of a strategy to spin the company off, noting Horizon was extremely important to Alaska. It pointed out that Alaska is 50 percent of the market at Seattle, but would only be 36 percent without Horizon.

Horizon Air's passenger traffic in the fourth quarter increased 4.3 percent on a 5.2 percent capacity increase. Horizon's load factor decreased by 0.7 points to 73 percent. Horizon's operating revenue per ASM increased 7.1 percent, and its operating costs per ASM excluding fuel increased 6.8 percent. Horizon's pretax loss for the quarter was $3.5 million, compared to a pretax loss of $6.6 million in 2005. Excluding the fuel-hedging adjustments, Horizon's pretax loss was $0.5 million for the quarter, compared to pretax income of $0.4 million in the fourth quarter of 2005. More