eponymous_coward

From Fairview Fanny's profile of AS:

NOOOOOOOOOOOOOOO

Another tidbit:

I never expected VX to push much SEA (since they are CA-based- I figured they'd right-size capacity eventually once they snagged some share), but WN surprised me. Seeing WN retreat from SEA is probably some of the genesis behind pushing hard in PDX in 2010.

COS flyer

While I agree with the analysis, the good news is that Alaska would have to be a willing partner as neither Delta nor American have the money to "buy" Alaska. So it would have to be a merger with Alaska wanting to merge. My gut says the next real move for Alaska is to join an alliance. If Continental and United elope, American will be hot to get Alaska into OneWorld as will Delta with SkyTeam. My bet is Alaska joins an alliance by the end of 2011. (At least we will get free bags on the alliance airlines then.)

Discus…..

dave1013

At the table I sat at during the recent JNU Gold lunch, the fellow who is in charge of scheduling spoke on the matter of a merger or a takeover of AS by another airline. AS's stock is so high now (relatively speaking) that such action seems unlikely (to him, at least). So "we should be safe for now". What happens tomorrow, can always be another story. Stay tuned.

tombiro

My only caveat to that sort of line of thinking (you know, reality-based logic) is that we just went through a process where not one, but two airlines that were bankrupt were able to get together, so the way money flows through the world of airlines w/r/t mergers probably doesn't work the way we're all used to it happening in other industries. But I digress.

dave1013

Understood. I was merely sharing what the AS fellow told us.....

muji

The Seattle Times article points out that Alaska Airlines is doing better financially than most other airlines. And it notes Alaska’s addition of routes to Hawaii in recent years (“When Aloha Airlines and ATA both folded in 2008, Alaska stepped into the breach of service to Hawaii. It now runs 14 flights a day to the islands from the West Coast, up from zero three years ago.”)

The article points out, however, that either Delta or American, which at present have code-sharing arrangements with Alaska “could make a move on their junior partner in a year or two”.

For now as both these airlines expand their trans-Pacific routes they “may not want to (continue sharing) …flight connections with (Alaska).”

http://seattletimes.nwsource.com/htm..._alaska29.html

eponymous_coward

http://www.flyertalk.com/forum/alask...-mckenzie.html

LuvAirFrance

Just hope they are inspecting their planes on schedule nowadays.

beckoa

Decent article... and although AS could be a tempting target, with its current increasing stock price, and building several strong niches including an amazing expansion into Hawaii... I surely hope other airlines keep their paws off AS...

CDKing

Why would an airline thats doing so well, need/want anyone to take them over? Havn't all the major airline mergers in the last several years been an airline that doing ok financially taking over an airline that is struggeling or bout to fail? Since AS is doing so well, I think they should continue doing what they are doing. The day AS goes away is the day I stop flying

3Cforme

If there's a deal between UA and CO, IMHO Alaska will be put into play. It will be chased by AA or DL, with the other trying to make sure the winner pays too much. That will be to the benefit of AS shareholders.

DL's end of quarter cash on hand was about 3x AS's market cap. Lots of cash is necessary in the airline business but this suggests financing should be available, especially as the DL/NW merger is widely recognized as meeting its cost-reduction targets.

tombiro

Couldn't agree more, and I'd be surprised if you didn't see some movement on just that speculation. On a related note, sat in front of an AA pilot (deadheading with a crew on AS) a week or so ago who conversed with his neighbor for most of our trip, who spoke quite a bit about how he really expected the alliance sites to start becoming the hub for booking, even if the individual airlines continued to have "sites" of their own, online. Looks like UA/CO might be just the next big step we're all taking to the "global airline" concept.

eponymous_coward

AS CASM: 11.50 cpm
DL CASM: 12.46 cpm
AA CASM: 14.56 cpm

Keep in mind that not only would big portions of AS's network lose money in DL or AA's network, but you lose codeshare revenue (RASM) from the AS side as well, because the losing bidder will likely go "screw you, we're killing the codeshare".


DL or AA buying AS is great news... for WN, VX and B6, as historically when legacy carriers eat LCCs, the legacy carrier eventually fritters away a lot of the non-core routes by dumping traffic into their hubs. What happened when DL took over WA might be instructive. The SLC hub got kept, but DL lost the rest of WA's network (in fact, AS flies a great deal of that network profitably). For AA, replace "WA" with "QQ" and "SLC" with "SJC"- except AA BARELY kept a presence at SJC.

I would guess that SEA and PDX would lose the AS East Coast routes pretty quickly (funneling people into ATL/DTW/SLC on DL, or ORD/DFW on AA), with SEA-DCA turning into SFO/SJC-DCA, SLC-DCA or extra LAX-DCA frequencies, depending on who "wins" AS. The AK and North-South routes plus Hawaii might hang around for longer, though I'd bet some of them would slowly bleed away under a higher cost structure, the same way DL is bleeding away NW's Hawaii-West Coast routes. I'd expect DL or AA to surrender on BUR, LGB, SNA, GEG, BOI... and they'd probably redeploy some QX props to their East Coast markets (since there's TONS of 300+ mile flights you can make there).

But hey, we'll get SkyPesos(tm)!

Anyways, the shareholders might cash in, but then again, they may not if they end up with DL or AA stock, unless they sell promptly... since I still have doubts that most of the US airline industry is doing it right and on a path to consistent profits.

dc333

In this theorhetical scenario, SEA benefits from DCA's out of perimiter slot expemptions not being changeable in any way. City pair and slot hour would have to remain as originally accepted or it would have to be put back up for bid to all interested parties. This is why Alaska still operates DCA-LAX with times more suited to east coast travelers.

eponymous_coward

Hmm. OK. Still think EWR, BOS and MCO would be toast (and probably one of MIA/ATL, depending on who won the bidding), along with some combination of ORD/DFW/AUS/MSP. I can't see DL or AA trying very long stage lengths out of SEA when they can dump people into East Coast hubs on connecting flights and use those 738s elsewhere (read: desperately propping up their failing business model).

But hey, I imagine AS flyers would LOOOOOVE being forced through ORD and ATL going to the East Coast, huh?