COMMITMENTS

Future minimum fixed payments for commitments (in millions):



September 30, 2012	Aircraft Leases		Facility Leases		Aircraft Commitments		Capacity Purchase Agreements		Engine Maintenance
Remainder of 2012	$	16.9	$	17.8	$	113.7	$	4.3	$	10.4
2013	141.6		47.2		351.2		17.4		31.7
2014	126.1		42.1		215.7		17.7		25.3
2015	104.4		31.7		49.1		18.0		9.2
2016	81.9		23.0		18.4		18.3		—
Thereafter	130.7		157.8		36.8		26.5		—
Total	$	601.6	$	319.6	$	784.9	$	102.2	$	76.6

Lease Commitments

The Company had lease contracts for 63 aircraft, which have remaining noncancelable lease terms ranging up to nine years at September 30, 2012. Of these aircraft, 14 are non-operating (i.e. not in our fleet) and subleased to third-party carriers. In May 2012, the Company entered into an agreement to sell and leaseback three Boeing 737-700 aircraft. The lease terms are less than two years and qualify as operating leases. The sale of the aircraft resulted in a gain of $3.2 million, which was deferred and will be amortized over the life of the leases to aircraft rent expense on the consolidated statement of operations. The majority of airport and terminal facilities are also leased. Rent expense was $68.8 million and $69.4 million for the three months ended September 30, 2012 and 2011, respectively, and $206.7 million and $207.9 million for the nine months ended September 30, 2012 and 2011, respectively.

Aircraft Commitments

As of September 30, 2012, the Company is committed to purchasing three Boeing 737-800 aircraft and 22 Boeing 737-900ER aircraft, with deliveries in 2012 through 2015, and has options to purchase an additional 39 Boeing 737 aircraft. The Company is committed to selling two Q400 aircraft in the fourth quarter of 2012, and has options to purchase an additional 10 Q400 aircraft.

Subsequent to September 30, 2012, the Company signed an aircraft purchase agreement with the Boeing Company (Boeing). Refer to Note 14 for further details.

On October 25, 2012, the Company sold one Q400, which did not have a material impact on the financial statements.

Capacity Purchase Agreements (CPAs)

At September 30, 2012, Alaska had CPAs with three carriers, including our wholly-owned subsidiary, Horizon. Horizon sells 100% of its capacity to Alaska under a CPA, which is eliminated upon consolidation. On May 14, 2011, SkyWest Airlines, Inc. (SkyWest) began flying certain routes under a CPA with Alaska. In addition, Alaska has a CPA with Peninsula Airways, Inc. (PenAir) to fly in the state of Alaska. Under these agreements, Alaska pays the third-party carriers an amount which is based on a determination of their cost of operating those flights and other factors. The costs paid by Alaska to Horizon are based on similar data and are intended to approximate market rates for those services. Future payments (excluding Horizon) are based on minimum levels of flying by the third-party carriers, which could differ materially due to variable payments based on actual levels of flying and certain costs associated with operating flights such as fuel.

Engine Maintenance

The Company had power-by-the-hour maintenance agreements for all Boeing 737 engines other than the Boeing 737-800 at September 30, 2012. These agreements transfer risk to third-party service providers and fix the amount the Company pays per flight hour in exchange for maintenance and repairs under a predefined maintenance program. Future payments are based on minimum flight hours. Accordingly, payments could differ materially based on actual flight hours.