AS should beware of AA
May 4, 2010, 2:12 pm
#1
Original Poster
Join Date: Mar 2000
Location: Santa Cruz, CA USA
Programs: AA, UA, WN, HH, Marriott
Posts: 7,290
AS should beware of AA
With the CO/UA merger, AA may be getting a bit anxious to pursue some mergers and AS is certainly a prime candidate.
I'm sure the execs as AS are aware of AA's west coast history and will not be lured into some pseudo-lucrative deal. Those with a good memory can remember what AA has done.
In the 80's they bought AirCal, with a great intra-California route system and was an excellent reliable carrier. Within a year or so, AA had totally disbanded AirCal's route system.
Then in the 90's, Reno Air established a great north-south system with SJC and RNO as hubs. AA bought Reno Air and did the same thing they did with AirCal.
The problem is that carriers like AirCal, Reno Air, as AS have a business model and "culture" that is totally incompatible with that of AA, and when AA has picked up these carriers, instead of maintaining their system as a semi-independent unit, they tried to impose their culture on the west coast airline and the system failed.
Go away, AA. Leave AS alone.
I'm sure the execs as AS are aware of AA's west coast history and will not be lured into some pseudo-lucrative deal. Those with a good memory can remember what AA has done.
In the 80's they bought AirCal, with a great intra-California route system and was an excellent reliable carrier. Within a year or so, AA had totally disbanded AirCal's route system.
Then in the 90's, Reno Air established a great north-south system with SJC and RNO as hubs. AA bought Reno Air and did the same thing they did with AirCal.
The problem is that carriers like AirCal, Reno Air, as AS have a business model and "culture" that is totally incompatible with that of AA, and when AA has picked up these carriers, instead of maintaining their system as a semi-independent unit, they tried to impose their culture on the west coast airline and the system failed.
Go away, AA. Leave AS alone.
May 4, 2010, 2:22 pm
#2
Join Date: Sep 2001
Location: Seattle, WA
Posts: 5,956
With the CO/UA merger, AA may be getting a bit anxious to pursue some mergers and AS is certainly a prime candidate.
I'm sure the execs as AS are aware of AA's west coast history and will not be lured into some pseudo-lucrative deal. Those with a good memory can remember what AA has done.
In the 80's they bought AirCal, with a great intra-California route system and was an excellent reliable carrier. Within a year or so, AA had totally disbanded AirCal's route system.
Then in the 90's, Reno Air established a great north-south system with SJC and RNO as hubs. AA bought Reno Air and did the same thing they did with AirCal.
The problem is that carriers like AirCal, Reno Air, as AS have a business model and "culture" that is totally incompatible with that of AA, and when AA has picked up these carriers, instead of maintaining their system as a semi-independent unit, they tried to impose their culture on the west coast airline and the system failed.
Go away, AA. Leave AS alone.
I'm sure the execs as AS are aware of AA's west coast history and will not be lured into some pseudo-lucrative deal. Those with a good memory can remember what AA has done.
In the 80's they bought AirCal, with a great intra-California route system and was an excellent reliable carrier. Within a year or so, AA had totally disbanded AirCal's route system.
Then in the 90's, Reno Air established a great north-south system with SJC and RNO as hubs. AA bought Reno Air and did the same thing they did with AirCal.
The problem is that carriers like AirCal, Reno Air, as AS have a business model and "culture" that is totally incompatible with that of AA, and when AA has picked up these carriers, instead of maintaining their system as a semi-independent unit, they tried to impose their culture on the west coast airline and the system failed.
Go away, AA. Leave AS alone.
You may also remember a small carrier called TWA. Apparently, AA doesn't discriminate based on west coast, east coast, midwest, etc... They just buy carriers and tear them down.
May 4, 2010, 3:17 pm
#3
Join Date: Jan 2010
Location: CONUS
Posts: 474
Completely agreed...but the bigger screw job by American (and it's unions I may add) was on TWA. Yeah, yeah, TWA was going to fail...But American bought them, made all these verbal promises - and barely anyone from TWA is employed today at AA - and just ask STL about the deal.
American is a massive 0-3 in mergers and while that is still good enough to be a designated hitter in the Mariners order, it stinks for airlines.
American is a massive 0-3 in mergers and while that is still good enough to be a designated hitter in the Mariners order, it stinks for airlines.
May 4, 2010, 3:20 pm
#4
Join Date: Nov 2007
Location: SEA, SoCal
Programs: AS 75K, DL Plat, AA, WN, Hertz, HHonors, Marriott
Posts: 1,306
TWA would've gone under if AA hadn't bought it. Unlike CO and UA, AS isn't loosing money and doesn't need to merge with another carrier in order to survive. How many examples are there of money loosing airlines buying profitable ones? I can't think of any...
May 4, 2010, 3:53 pm
#6
Join Date: Nov 2007
Location: SEA, SoCal
Programs: AS 75K, DL Plat, AA, WN, Hertz, HHonors, Marriott
Posts: 1,306
Does anyone have a compelling argument for how AA buying/merging with AS would a) be good for ALK investors, or b) make AA a more profitable airline?
May 4, 2010, 4:47 pm
#7
FlyerTalk Evangelist
Join Date: Aug 2007
Location: SEA, but up and down the coast a lot
Programs: Oceanic Airlines Gold Elite
Posts: 20,392
So, let me see...
- Buy AS/QX, with a route structure that's mostly unprofitable at our current costs
- ???
- Profit!
Why does AA want to make WN, VX and other airlines money, at their expense, by coughing up market share and revenue they have access to via codeshare? I mean, really, if they just want to set a bunch of money on fire (representing running AS's route system at a loss) while buying some 738s and Q400s (representing the planes), I'm sure they could do that.
BTW, the same goes for DL, too, just a little bit less. NW was different, because DL figured they could run NW's routes better as part of a behemoth... but it's a VERY hard argument to make that they could run AS's network better than AS can (historically, DL has flopped their West Coast routes, MULTIPLE times). Or do DL and AA figure "screw it, we'll let WN fly PDX-SJC, LAX-BOI, SAN-KOA and SEA-ANC when the frontal assault from LCCs inevitably shows up, we just want some planes and bitter ex-AS employees"?
Well, a) is easy- cash out the AA/DL shares and buy a competently run company. The second point, though, good luck with that.
- Buy AS/QX, with a route structure that's mostly unprofitable at our current costs
- ???
- Profit!
Why does AA want to make WN, VX and other airlines money, at their expense, by coughing up market share and revenue they have access to via codeshare? I mean, really, if they just want to set a bunch of money on fire (representing running AS's route system at a loss) while buying some 738s and Q400s (representing the planes), I'm sure they could do that.
BTW, the same goes for DL, too, just a little bit less. NW was different, because DL figured they could run NW's routes better as part of a behemoth... but it's a VERY hard argument to make that they could run AS's network better than AS can (historically, DL has flopped their West Coast routes, MULTIPLE times). Or do DL and AA figure "screw it, we'll let WN fly PDX-SJC, LAX-BOI, SAN-KOA and SEA-ANC when the frontal assault from LCCs inevitably shows up, we just want some planes and bitter ex-AS employees"?
Does anyone have a compelling argument for how AA buying/merging with AS would a) be good for ALK investors, or b) make AA a more profitable airline?
May 4, 2010, 5:07 pm
#8
Join Date: Aug 2000
Programs: I am an AS employee, but my comments do not represent the company in any official capacity.
Posts: 4,343
May 4, 2010, 6:15 pm
#9
Join Date: Jun 2004
Location: Anchorage, AK
Programs: Lifetime AS 1MM & MVPG, AS MVPG100K, AA, DL, HH-G
Posts: 8,259
May 4, 2010, 6:44 pm
#10
Join Date: Nov 2007
Location: (PHL) Cape May, NJ
Programs: MVP Gold 75K, Board Room, Marriott Gold, Hertz Gold
Posts: 2,439
I think AA is having a grand old time underselling alaska on their own flights. As long as this continues, i don't see much action. especially with the pending american reciprocal agreement (which AA elites based on the west coast complain about most)
Oh, check out the AE flight im about to step on:
Yes, thats 0.7 stars of 5.
Oh, check out the AE flight im about to step on:
Route: From (ORD) Chicago, IL, US to (PIT) Pittsburgh, PA, US
Duration: 1h 25m
Equipment: Embraer RJ145 (Scheduled)
On-time Rating: 0.7 of 5 What is this?
Duration: 1h 25m
Equipment: Embraer RJ145 (Scheduled)
On-time Rating: 0.7 of 5 What is this?
May 4, 2010, 10:26 pm
#11
Join Date: Jan 2008
Programs: AS MVPG, CO, NW(now DL), Flying Blue
Posts: 6,554
while the idea is not impossible because nothing is. However It is very very unlikely that an airline losing hand over fist would be able to sucessfully buy or merge an airline thats making profits arm over legs. 
Any Alaska air group shareholder that would vote to agree to merge or be sold to AA would have to be a complete idiot in this current climate. AA would have a way better shot at picking off F9 or HA. Maybe if AA was making money and had an up to date fleet Id be concerned....but they dont have either. OR if AS was losing a lot of money they would be a soft target....but they aint
Any Alaska air group shareholder that would vote to agree to merge or be sold to AA would have to be a complete idiot in this current climate. AA would have a way better shot at picking off F9 or HA. Maybe if AA was making money and had an up to date fleet Id be concerned....but they dont have either. OR if AS was losing a lot of money they would be a soft target....but they aint
Last edited by ANC; May 4, 2010 at 10:33 pm
May 4, 2010, 10:39 pm
#13
Join Date: Jan 2008
Programs: AS MVPG, CO, NW(now DL), Flying Blue
Posts: 6,554
The bad part is they dont get better. Theyre getting significantly worse. Like I said if all possible Im routing through MSP from now on to PHL and MKE even if its a few bucks more. If Im 2, 3, 4, 5 hours plus late routinely using AE its worth the extra $100 or $200 bucks going via DL through MSP to arrive close to on time. Nothing is funner than expecting to arrive at 7 or 8 pm to actually arrive at 12 or 1am and have to head to be at a meeting at 8am. I know that happens sometimes but with AE its become the standard. Im not adding an additional day of travel just for AE/AA to arrive in plenty of time. I'll just spend $200 to route through MSP and arrive at a decent hour.
May 5, 2010, 6:22 am
#14
Join Date: Nov 2001
Location: Portland, Oregon
Programs: Hilton Platinum, Alaska MVP Gold
Posts: 2,363
Completely agreed...but the bigger screw job by American (and it's unions I may add) was on TWA. Yeah, yeah, TWA was going to fail...But American bought them, made all these verbal promises - and barely anyone from TWA is employed today at AA - and just ask STL about the deal.
American is a massive 0-3 in mergers and while that is still good enough to be a designated hitter in the Mariners order, it stinks for airlines.
American is a massive 0-3 in mergers and while that is still good enough to be a designated hitter in the Mariners order, it stinks for airlines.
May 5, 2010, 12:05 pm
#15
Join Date: Apr 2010
Location: SF Bay Area
Programs: Marriott Bonvoy Ambassador, AA EXP
Posts: 2,704
I am Plat on AA, and I have to agree with you guys over here. I hope any attempt by AA to buy AS will fall though. What I do fear of any takeover, we can be sure that the PDX hub will be dismantled, the point-to-point routes (the ones that don't involve LAX, PDX, SEA, and ANC) will be deleted. As a AA flyer based in SFO, the Alaska/Horizon flights give me a lot more choice, even if I might not get upgraded on them. But any AA takeover will probably eliminate all choice, with the only surviving flight out of SFO might be to SEA.
I hope that AA and Alaska do not merge. I do like how we get EQM and RDMs, including the 100% bonus on AS as if we took an AA flight, whether it is an AA codeshare or regular AS flight. I know that we do not get the upgrades. But one thing I like about AS is how paid F is much cheaper than it is on other airlines, and it gives complementary access to the board room. While reciprocal upgrades might not be realistic, I would like AA and AS to have more agreements for their elites, like 1 free checked bag for elites.
The reason I am skeptical about any potential takeover of AS is because of AA's history. AA took over Reno Air, and SJC became a mini hub. But now SJC is now a spoke, with little presence. The same thing with the AA-TWA merger. The St Louis hub is now gone, and is just a spoke. Looking at AA's track record, I do fear that they could do the same thing to AS. AS currently maintains a hub in both SEA an PDX (as well as ANC and LAX). And any merger will likely cause the PDX hub to disappear. And what about all those intra-Alaska flights? Will AA maintain them because they will somehow not be able to profit on them?
AA flyers at SFO gets some nice additional destinations though AS with also come with the sought-after EQMs, just like the AA flights. We may not get upgrades, but we do get domestic service to ANC, PDX, SEA, service to Mexican destinations of SJD and PVR, and a intra-California route to PSP. And with nearby SJC and OAK, we also get destinations to Hawaii (OGG, KOA), US destinations GEG, BOI, AUS (the nerd bird), and a very short intra-California route to SMF (perfect for getting extra elite miles when headed up the west coast). Any takeover of AS here would probably cause many of these routes to disappear based on AA's previous actions. And thus, we SFO elites will probably lose more than what we gain in upgrades.
The reason I am skeptical about any potential takeover of AS is because of AA's history. AA took over Reno Air, and SJC became a mini hub. But now SJC is now a spoke, with little presence. The same thing with the AA-TWA merger. The St Louis hub is now gone, and is just a spoke. Looking at AA's track record, I do fear that they could do the same thing to AS. AS currently maintains a hub in both SEA an PDX (as well as ANC and LAX). And any merger will likely cause the PDX hub to disappear. And what about all those intra-Alaska flights? Will AA maintain them because they will somehow not be able to profit on them?
AA flyers at SFO gets some nice additional destinations though AS with also come with the sought-after EQMs, just like the AA flights. We may not get upgrades, but we do get domestic service to ANC, PDX, SEA, service to Mexican destinations of SJD and PVR, and a intra-California route to PSP. And with nearby SJC and OAK, we also get destinations to Hawaii (OGG, KOA), US destinations GEG, BOI, AUS (the nerd bird), and a very short intra-California route to SMF (perfect for getting extra elite miles when headed up the west coast). Any takeover of AS here would probably cause many of these routes to disappear based on AA's previous actions. And thus, we SFO elites will probably lose more than what we gain in upgrades.