Alaska Air stock falls sharply on difficulties with Virgin, Horizon Air
Seattle Times article
Alaska Air Group management acknowledged Wednesday that the ongoing challenges of integrating its big Virgin America acquisition have caused “a lot of anxiety around here… a lot of tough conversations,” and have distracted executives from other issues. Chief executive Brad Tilden also said ongoing problems with cancelled flights at Alaska’s regional carrier Horizon Air have prompted him to move its flight operations center from Portland to Seattle. |
Wow... 13% drop.
ALK... wow. Time to buy? Or more bumps ahead... |
Originally Posted by beckoa
(Post 28977353)
Wow... 13% drop.
ALK... wow. Time to buy? Or more bumps ahead... |
Have to see which of the legacies step in to deliver the coup de grace while AS is down.
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Nevertheless, Tilden said, the quarter brought “pricing pressure, especially at our transcontinental and inter-California markets, with walk-up fare levels being well below historical norms.” Delta and Southwest are pressing Alaska in Seattle and those carriers plus American, United and JetBlue are adding fare pressure in California. |
Originally Posted by Adelphos
(Post 28977640)
Why would Alaska buy Virgin, then remove the only advantage it had on many of the Virgin routes just as competitors like B6, AA, United, DL are adding a lot of capacity on these same routes? On transcons, Virgin is far behind all competitors in the premium cabin and more expensive than competitors in economy.
Competition is increasing every day and the only strategy they have implemented in California is to add a bunch of new routes and hope that people pay for it and that there are enough pilots to fly them. They are getting killed on transcons and intra California flights now and it will just get worse with the AS product and giving away premium seats. They are not going to make money as the bottom feeder carrier from California. UA’s conference call was panned last week but the one for ALK today made the UA management team look like geniuses. |
Sure seems like they wish they could just hit the undo button on the whole deal...
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Originally Posted by spongenotbob
(Post 28977982)
Sure seems like they wish they could just hit the undo button on the whole deal...
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Originally Posted by spongenotbob
(Post 28977982)
Sure seems like they wish they could just hit the undo button on the whole deal...
(2) Overall, a down market day (3) Stock overreaction, as is common. I'd say that half of the drop was justified, and half was overreaction. |
Originally Posted by sfozrhfco
(Post 28977702)
They are getting killed on transcons and intra California flights now and it will just get worse with the AS product and giving away premium seats. If it wasn't for the BUR-SEA flight, I'd switch entirely. As it is I'm not going to requal for next year, so I guess I'll be a free agent. |
Full transcript:
https://seekingalpha.com/article/411...all-transcript Most interesting quote (to me): Brandon S. Pedersen - Alaska Air Group, Inc. It's Brandon. Maybe I'll disclose – I can assure you that we are more frustrated than you about this whole thing. And there's a lot of anxiety around here. There's been a lot of tough conversations in the last few weeks about this. We've already started talking about this notion of a glide slope to get from the place we are now to the place we want to be. |
Originally Posted by northwesterner
(Post 28978046)
I'm LA based and travel mostly for leisure. I know that pricing does not equal yields, but ... VX seems awfully expensive for their transcons out of LAX, especially when compared to the likes of Delta.
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Originally Posted by spongenotbob
(Post 28978051)
Full transcript:
https://seekingalpha.com/article/411...all-transcript Most interesting quote (to me): Yes, I think they are having tremendous buyers' remorse... |
Disappointing that there wasn't more focus on the Horizon debacle and the lasting impact that will have on Alaska's reputation. Allowing that to happen (and continue and continue) will ultimately be as or more important than many of the Virgin integration challenges. It's really tough to win back a customer treated so poorly for all these months.
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Originally Posted by spongenotbob
(Post 28978051)
Full transcript:
https://seekingalpha.com/article/411...all-transcript Most interesting quote (to me): Yes, I think they are having tremendous buyers' remorse... Just my $0.02 of course, but if you read the entire transaction between Hunter Keay and the senior leadership, there's nothing that would lead any reasonable person to conclude there's "buyer's remorse" of any kind. |
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