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Bombardier tables proposal covering Horizon Q400 deferrals

Bombardier has tabled a new schedule for future Q400 deliveries to Horizon Air, which is seeking to defer and retime delivery of the 14 remaining 76-seat turboprops it has on order with the Canadian airframer.

The proposed schedule would see Horizon take one Q400 in the fourth quarter of this year, five in 2009, and a further five in 2010. Three more Q400s would be delivered to Horizon thereafter.

However, the second largest Q400 operator in the world is "continuing to negotiate and the schedule is subject to change", says Horizon parent Alaska Air Group in a filing with the US Securities and Exchange Commission (SEC).

Of the 46 Q400s ordered by Horizon, a total of 32 have already been delivered. Horizon wants to time the delivery of its remaining Q400s to coincide with the remarketing and removal of its 20 Bombardier CRJ700s, as it transitions to an all-Q400 fleet.

As previously announced, the regional carrier currently expects capacity in the first quarter of 2009 to be 14% to 15% lower than the first quarter of 2008. Additionally, it anticipates that full year 2009 capacity will decline by approximately 9%, although plans for the full year have not been finalized.

During Imperial Capital's second annual global opportunities conference in New York today, Alaska Air Group VP finance and controller Brandon Pedersen said Horizon hopes to be operating an all-Q400 fleet by the end of 2009 "but that will adjust slightly depending on how our remarking efforts go".

He says the regional carrier is in the process of subleasing two Bombardier CRJ700s to another carrier but is looking for homes for the remaining 18 aircraft.

The two aircraft are expected to exit the fleet during the fourth quarter, according to Alaska Air Group's SEC filing. "The amount of any fourth quarter charge is not currently expected to be significant," it adds.

If and when a new delivery schedule is agreed, it would be the first such deferral by a Q400 customer.

"We are in discussions with our customers regarding our business plan, their fleet mixes and delivery scenarios. But to date there have been no confirmed aircraft deferrals," says a Bombardier spokesman.

"We are conscious of the current financial crisis and we're monitoring the situation very closely and frankly we cannot fully predict the impact of the current situation on our business because there are still elements that are unknown to us."

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