BearX220

AS/QX is certainly relevant to people who live their lives flying up and down the west coast corridor. It's when those people have to go somewhere else, and/or spend more than two hours on the plane, that AS runs into trouble. Between the loss of the AA and DL alliances and a last-in-class transcon proposition, the total relevance case is weak and getting weaker. If you fly SEA-LAX once a month, plus SEA-YYZ or SEA-JFK five or six times a year, you're chasing middling status, but only if you stick with one airline. Why fly AS at all in that case, especially as the transcon offer is overpriced and underprovisioned?

There's the problem in a nutshell. I'm alarmed at how little thought Tilden and company seem to have given to it. They don't seem to get the difference between opening OMA or CHS and being greeted as heroes... and plunging into SFO/LAX-JFK/BOS with the lamest product offering among five or six entrants.

sfozrhfco

..and even worse complaining that you are not gaining any traction with pricing AND being in denial that premium passengers are going elsewhere...AND admitting both on a conference call with your investors AND telling them at the same time that they haven't even taken a look at the VX network yet.

I mean seriously, that is like buying a house through craigslist you have never seen from somebody that claims the deed and the keys are in the Philippines and just as soon as you wire the money, both will be Fedexed to you.

I am still in shock from that call.

ucdtim17

You sort of assume, even when they're making decisions you disagree with, that they know what they're doing, that they have a plan. Turns out they're just winging it (pun intended) and don't really have a clear strategy going forward beyond integrating the airlines and then figuring out what to do. Shocking indeed.

notquiteaff

Are you talking about someone buying F, or the 120-150 people behind the curtain?

Adelphos

What Alaska should have done is not take away the Virgin branding, but fortify and expand it as part of a stronger, combined airline. Keep the Alaska brand as well from the PNW. Offer a combined loyalty program. Hotel companies have dozens of brands per comapny, why couldn't an airline have two?

sfozrhfco

That became crystal clear this week. I was wondering why they would piss off their existing customers by using planes for new service to random cities rather than accommodate existing customers which actually have built up loyalty to AS. I was wondering how they thought they were going to compete with VX's network and a weaker product and still make money. I was wondering why they were doing nothing to compel VX Gold members to stick with AS beyond trying to sell Mileage Plan and the AS credit card as the best things ever. Now, I know it was just an impulse purchase with no planning or strategy behind it. It got delivered, and management now has to figure out what the heck to do with this thing.

Buster

Not true for me. QX issues have forced AS changes to my route of BUR-PDX, so now we're down to 2 flights a day, at really inconvenient times. I, like others on this thread, have started moving my flights to Southwest for greater reliability and better scheduling. My flights next weekend are the last on AS for a while...all of my upcoming flights are now on Southwest. I won't make Gold again (I've been Gold for almost 10 years now), I status matched over to Southwest, and that's pretty much it for me unless something improves over at AS. I'll fly whoever has the better schedule, and I'm not going to bother chasing status at AS anymore.

sfozrhfco

..but that is the whole point. Their idea of relevance is to offer a flight a day out of SFO to a few random destinations and now they are relevant to those travelling from there. At the same time, they are cancelling flights that ARE already relevant to people who built up loyalty to AS. Now they have a bunch of empty low yielding flights to ABQ/BNA, etc and pissed off their formerly loyal passengers. Great job killing two birds with one stone. Unfortunately both are killing off yield and not building up loyalty.

BearX220

Immaterial. Whether you are an F buyer or K buyer, if you're motivated to consolidate spend with one carrier and you have missions outside the west coast corridor, it's harder to stick with AS without the DL and AA alliances. Harder still if you are in SFO or LAX and wand a comfortable transcon and/or good frequencies at a competitive price.

wrkngonit

The other thing they probably did not anticipate when they signed up for the merger was that the AA partnership would end up significantly diluted (which in turn watered down MP ... but that's a separate topic). Their network needs some serious beefing up in reach and frequency.

Might also be worth noting that today Hawaii is a major market for Alaska, which must generate decent revenue for them. With WN coming in next year, that market may also come under pressure. They definitely need to protect that turf.

They're a decent airline ... truly hoping they prevail.

ucdtim17

And needless to say, the QX issues have certainly impacted SMF/OAK-PDX fliers (I am finishing a month of flying WN PDX-OAK). These should be (and have in the past been) core routes for AS but are afterthoughts now, and the large majority of the traffic on either route now flies WN. Gotta chase that key SFO-ABQ market I guess.

sfozrhfco

Maybe they should start by consulting with their passengers to find out what they actually need to stay or to be loyal to AS. Might be better than just saying to investors--we have no idea what is happening but we are almost done with the merger.

milypan

Yes, technically it's not in the top 10 markets, but AS/VX have many more than 10 routes out of SFO, let alone the entire Bay Area! AS/VX serve 37 domestic airports from either SFO, SJC, or OAK. The vast majority are served from SFO, but I'd be fine with service from OAK or SJC instead.

You made me go look up market sizes in the latest BTS data (Q2 2017). Phoenix is the #9 market from the SF Bay Area, Houston is the #14 market, and Atlanta is the #15 market. AS/VX have not announced plans to serve any of those markets, so they're missing one-fifth of the top-15 alone. After the AA announcement people were complaining that they couldn't get to Podunk, WV on an AS partner anymore, but that dramatically understates the problem down in CA. You can't even get to Houston, Phoenix, or Atlanta from here (in any reasonable amount of time).

I'd be willing to grant them a pass on this if their AA partnership hadn't fallen completely apart or if their SEA hub were not entirely useless for connecting to anywhere besides ANC. But in light of those realities, it makes it very difficult for any serious traveler in CA to use them near exclusively.

At this point I have no idea what their SFO/LAX expansion strategy is. They don't want to provide a reasonable network for business travelers, they don't want to compete on price for budget travelers, they don't want to provide a competitive product for people willing to pay for premium cabins...who is going to fly them? I like MileagePlan, and the simple fact that they're not UA, but that's barely enough to keep me, and it's certainly not enough for the other 99% of potential customers. What a mess...

milypan

They're missing three of the top 15 markets from the SF Bay Area (PHX, HOU, ATL). And by "missing" I don't mean "you can't get there on a non-stop." I mean you can't get there on any reasonable itinerary at all. That's not true for UA, AA, DL, or WN. The only large carrier with a worse network here is B6 (and yes, that is exactly why AS paid $2.6b for VX despite having no real plan at all).

notquiteaff

Well, I asked because you are mentioning last-in-class transcon proposition and "lamest product offering". Clearly that is the case in F on premium transcons. Not so clear to me that it's the case for someone like me who buys the cheapest fare because it comes out of my own pocket.

On another unrelated note, the snippets that quote from the earnings call are somewhat surprising to me. I would expect a more well-thought-out description of problems. The questions that will be asked on these calls aren't exactly surprising. Do they not prepare for that?