Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Ray Neidl from Calyon Securities.
Raymond Neidl - Calyon Securities
Congratulations on Horizon. Looks like it is finally turning around, but with the weakening economy and other things happening in the Pacific Northwest, what other further actions might have to be taken or do you feel you are pretty much on the track for solving the problems completely now?
Bradley D. Tilden
The things that characterize the actions we have taken thus far will lay a real firm foundation to weather this storm. We’ve done significant capacity shifts and in many cases reductions although the mix change between Q200s and Q400s has had some effect, but in all of those cases the frequency reductions that we made and down to levels that preserve a pattern that is suitable for both the local and network support are what we consider to be sustainable levels, and we’re working very closely with all the communities we serve to engage in whatever stimulative activity is appropriate there, and I feel that the adjustments were made in terms of trending markets was foreseeable given the updates for Q400s, but that we’re at a place now that we think is pretty sustainable going forward.
William S. Ayer
And Ray, I might just add that the fleet moves at Horizon are very significant and we’re not quite done with the Q200 as you heard and there are identifiable expenses that go away when that fleet type goes away and even more so with CRJs. So we’re looking forward to getting Horizon to a single fleet of Q400s and we think that will be the most efficient, clearly the most fuel efficient, and we’ll get some specific savings as we make those transitions.
Bradley D. Tilden
And we estimate between the two, the overhead reductions are in the order of $10 million as a step function once the two fleet types go away.
Raymond Neidl - Calyon Securities
Okay great. And you’re doing a great job in that area which had been a drag on the company. The other thing is, just to clarify the fuel hedges, you guys are smarter than other airlines, it sounds like your fuel hedges were less risky from other airlines with oil prices coming down, and why did you decide to do it that way and what was the trade-off as far as the cost goes?
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