milypan

I own some ALK shares, but it's a tiny percentage of my portfolio, so I'm not too concerned about the financial implications.

As an SFO-based passenger the most concerning part of the call was the repeated assurances that very few new routes will be added next year. The AS+VX route network out of SFO still isn't that great – they have no service to the 5th largest MSA (Houston), no service to two of the 10 largest MSAs (Atlanta), and no service to 7 of the 20 largest MSAs. I was hoping they'd address the biggest holes in their ex-SF Bay Area network in short order, but it doesn't sound like they have any plans to do that. In the case of IAH I can understand that they don't want to go head-to-head with the 8 trillion frequencies that UA offers on that route, but then at least do something slightly asymmetric like a well-timed SJC-IAH flight. Throw us a bone here.

To be clear, it was CO management that took over UA. They kept the higher-profile UA brand name, but Smisek was from CO.

sfozrhfco

If the bleeding continues, I would expect that cuts would be more likely than adds. They won't have any product differentiation to count on and won't have a fan base behind them. They are being hit from all sides with competitors that have either a better product or better network or that are bigger and can take losses to keep or gain market share which AS can't absorb. They have really boxed themselves into a corner.

Baze

Believe me, I am WELL aware of this.

One thing that made it easier to leave UA is that I am a Million Miler so, at least for now, I will always have at least Gold status.

And for a lot of the repliers to my pst, it is obvious you didn't live the the horror of the UA/CO merger that still isn't complete. I can only hope AS crosses the finish line better than UA/CO that hasn't been able to do. And doing my research I honestly feel the DL and AA alliances would have gone away anyways regardless of the merger.

edit to add, that is Million Miler on UA.

bkojote

On the east coast, Alaska's reputation has started out on the wrong foot. Virgin America flyers are already worried Alaska's going to destroy an airline they love, and Alaska's first impression of what's to come has been the disastrous JFK terminal move. I think it's a good example of Alaska not understanding VX's customer base- no way in hell the style conscious and techy VX fliers are going to tolerate a cramped terminal with no Starbucks, PreCheck, or Shake Shack (hell, Delta was very quick about this with their LAX move.)

While they're bungling their east coast service, JetBlue is launching Mint in a few months to Seattle, so there goes Alaska's transcon business.

eponymous_coward

Jet Blue's going to destroy AS's transcon business in SEA with 1x daily from JFK? Riiiiiiiiight. Sure thing.

JFK is actually a weaker market in some respects than EWR as far as SEA goes (note: AS flies 3x SEA-EWR, 1x SEA-JFK, and the JFK is a redeye, which screams "this is a crappy market but we might as well get some plane utilization out of it"). Note that AA also only flies 1x JFK-SEA, and DL had DeltaOne flop in the SEA-JFK market, with a hub on BOTH ends. I think B6 Mint will do fine but it's not going to nuke AS's transcons. Hell, B6 doesn't even fly FLL-SEA.

It's JFK-SFO/LAX they need to be worried about... but that's everyone. But AS is definitely the weakest one in that market.

Yeah, and so far the record is decidedly mixed at best. On the other hand, they have chances to get the systems merger right that UA/CO completely blew (I can recall the mess when UA/CO systems merged that AA/US avoided).

ucdtim17

BOS terminal situation is worse

bkojote

1x daily flight is Alaska's transcon business to JFK, so this isn't some bulletproof operation. They're stronger out of EWR, but their situation there isn't what I'd call great.

But once the Mint effect hits in with other carriers dropping prices (the only other flat bed nonstop from JFK-SEA goes for $3k round trip on Delta currently) , I don't see Alaska charging the prices they do now.

eponymous_coward

AS flies transcon to a LOT of markets out of SEA, most of which will never see Mint's lie-flat seats.

Same daily frequencies to EWR as UA. Same NYC frequencies as DL (4 daily, and DL has a hub on both ends). Seems fine to me.

SEA is not a hugely transcon market the way LAX/SFO are. Check out SEA's top 10 domestic destinations. Now LAX. Now SFO. Notice the lack of NYC in SEA's top 10.

This is why AS is in the big leagues now. Transcon matters if you want to be a player in LAX/SFO. SEA not so much.

tphuang

Mint won't be on all of the transcons, but it's likely to be on most of the high yielding transcon. AS will be fine in SEA, but the yield will be lower once the mint enter. It's the markets out of LAX/SFO/SAN that are in trouble.

I think it's far more likely that they exit out of at least one of the JFK/BOS/FLL-SFO market.

WebTraveler

There are all sorts of WHAT IFs and other speculative theories. I deal with the reality, the whole Virgin America purchase has been a disaster for me...cancelled flights, terminated destinations (they say temporarily, we'll see), codeshares and mileage accrual/benefits with AA, and so forth.

Right now I have been pushed off to Southwest and United for many flights, and I am starting to take those flights to other places Alaska flies as well. I am the exact passenger of why Wall Street has concerns.

sfozrhfco

Same thing happening on the VX side. With no incentive to get 50,000 status points to achieve gold, I dropped the VX credit card and have spent the year using up my accumulated points. Saturday will be my 20th VX flight with a total out of pocket expenditure of $138--mostly all free with a few $29-49 fares thrown into the mix.

Transcons all went to Jetblue--15 Mint flights. Even took UA and WN a few times which I never would have even considered before. Now if JetBlue or an international carrier can't get me to where I am going, I just pick the carrier that offers the best value--and that has only been AS once--to use up the 10,000 Mileageplan free points for a trip back from PDX. Knowing that next year the VX product is going completely away, it really makes no difference for a intra-West trip taking WN/UA/DL/AA/AS.

channa

There was not a lot of overlap between AS and VX to begin with, and we still have AA til 12/31. VX goes away 4/25, so it's only about 4 months of headache.

It sucks, but it's not as bad at it seems.


IAH is not a Top 10 market from SFO. Aside from CO, nobody flies there nonstop. And much of CO's traffic is fabricated (connections through Houston, not to/from Houston). Go to IAH Terminal A. All domestic carriers aside from UA make up 75% of that terminal. UA runs out of the rest of A, B, C, and E. While IAH has a lot of population, it's simply not that big of a air destination.

bdhaliwa

That was the case when Alaska had this little corner of the country all do itself. Now it is trying to be a big league player on trans cons and intra California, both places where it is going to run into a brick wall of AA/DL/UA on transcons and SW on intra CA. The paid billions of dollars fox VX which had a pretty good brand among high earning and spending customers of Bay Area and NYC. What do they do with it, converted in into Eskimo!! Dumbest move post merger. I have talked to several bay area friends and associates who have stop flying VX altogether, these are not weekly air warriors, but occasional travelers who were buying F to places like LAS/DFW/PHL, the core of VX's most profitable customer base. They already started feeling the degradation of service after AS acquisition, and have switched to usual suspects.

Nevsky

Also, way more expensive in First. Seriously, JetBlue, as well as AA and DL are often less than half the price of a NY/LA ticket on AS. In fact, I wonder how well VX would have held up even without the merger. Its hard product has fallen way behind everyone else.

sfozrhfco

The only one that is worse is AS itself which will be the replacement product. They need to either start offering $400 OW F tickets for transcons or just pull out of JFK/BOS/FLL all together from California.