milypan

tphuang

Which is why WN is treating this AS threat so seriously. If you don't think WN entering HI and adding capacity in its west coast focus cities will depress AS yields, then I guess we can wait until Q4 2018 and see where AS yields are at. WN is not looking to battle AS in PNW to California market. It's looking to kill yield of AS in the secondary intra-cali market and possibly to PDX.

Seat 2A

I logged just over 100000 BIS revenue status miles aboard Alaska operated flights in 2017. Were all of the flights up to Alaska's usual fine standards? Of course not - especially catering on mid-con and trans-con flights. But aside from that, I'm hard pressed to think of any instances on the ground or in the air where I witnessed or experienced overtly egregious lapses in service standards sufficient enough to make me consider switching my loyalty to Delta or anyone else. Nobody's perfect but on the whole I'm still quite pleased with the overall product offered by Alaska, especially the benefits offered to Gold and higher Mileage Plan members.

I logged a few flights on Southwest last year because they were convenient and/or cheap (routes like MCI/LAS/PHX to DEN come to mind) and while I appreciate the cost savings, had Alaska offered nonstops in the same markets I would've happily paid more to fly AS - if only for an assigned seat regardless of upgrade potential.

diver858

How can additional WN capacity in its west coast focus cities depress AS yields in markets where they do not compete? WN is not expected to enter HI until at least August 2018 Southwest Hawaii Update | New Details Revealed, would not be surprised to see this pushed back in to 2019, later if there is a recession in the second half of 2018. As I illustrated earlier, there is limited head-to-head non-stop competition in much of the intra-California market.

tphuang

They added frequency in quite a few lines that competes against WN directly like SJC-PDX (from 4 to 6), OAK-PDX (5 to 6), SJC-SEA (4 to 5), OAK-SEA(6 to 7), SMF-SEA(4 to 6)

Southwest Declares War Against Alaska and Anyone Else Who Wants a Piece of California | Cranky Flier

They also added some routes which clearly competes against AS like EWR-SAN, EWR-OAK (competes against EWR-SJC), SFO-AUS, SAN-PVR.

As for HI, not only is WN an issue, but HA armed with A321NEO will be a huge game changer in the west coast to HI market. Now, A321NEO allows HA to enter market that did not justify daily 767 and add frequency in markets that supported more than daily 767/330. It will allow HA match AS schedules much better. We have already seen that at SAN, OAK and PDX.

PV_Premier

My 2c based on 3 years of MVPG

• AS was great if you can work within the confines of their network, as pricing on "codeshares" are not competitive.
• F product lacks, bigtime, relative to the competition
• Connecting in SEA generally sucks when trying to go eastward. Not particularly efficient.
• IRROPS is a disaster, but when things are on time, AS customer service is best
• The mix and match of partners is not as powerful as a full fledged well run alliance
• The customer-facing roles are generally staffed by happier and more flexible people at AS than any other US airline

In limited AS flying in 2017, I did notice some substantial slips in service and product compared to years past.
I moved to DL more or less completely last year. They've got plenty of issues and the miles are far less valuable, but at least I have the backing of a much more powerful network and a somewhat decent alliance. And instead of one major hub and two or three half-baked focus cities, I have a handful of major domestic hubs at my disposal when things go wrong or my schedule is tight (which it almost always is). For me, those are the most important things at the end of the day. I also took the WN companion pass offer, we will see how much I end up using it...

diver858

[QUOTE=tphuang;29265832As for HI, not only is WN an issue, but HA armed with A321NEO will be a huge game changer in the west coast to HI market. Now, A321NEO allows HA to enter market that did not justify daily 767 and add frequency in markets that supported more than daily 767/330. It will allow HA match AS schedules much better. We have already seen that at SAN, OAK and PDX.[/QUOTE]

According to https://www.bizjournals.com/pacific/...t-a321neo.html "...Hawaiian (Nasdaq: HA) will launch daily non-stop service between Portland and Kahului, Maui on Jan. 18 and flights between Oakland and Lihue, Kauai will begin April 11. This will be followed by flights between Los Angeles and the Kona Coast on the Big Island next summer..."
This does not put much of a dent in to AS' West Coast Hawaii service, where it currently offers nonstop service to all 4 major islands from OAK, PDX, SAN, SEA and SJC. AS does not offer Hawaii service out of LAX, so HA's LAX-KOA is not a factor.
From personal experience, I have flown AS to all 4 Hawaiian islands out of SAN dozens of times; flights have been consistently full, limited success with upgrades, in some cases unable to us GGU's.

As you suggest above, HA's new A321neo service will increase capacity and competition, ~1 year head start on WN. It is one thing for WN to add service between existing stations in its battle with AS, quite another to build one from scratch, 2500 miles from the mainland - with limited ETOPS experience. Gary Kelly is first and foremost a financial guy, still not convinced he is ready to pull the trigger on what is becoming an increasingly risky proposition.

diver858

I specifically referred Intra-California, making the point that AS has established a solid secondary network, with little to no competition on most routes.

The Situation

Full disclosure, I am a DL flyer, but I saw the Times article and have a couple friends that work for AS, so I figured there would be some interesting threads. It is really disappointing to see how things have gone at AS. Employees are really upset with the way things are being run. Originally they were upset with their contract being below market, but most employees were willing to forgive and take below market pay for what used to be a great place to work (as I am sure most of us would). The work environment changed quite rapidly when the merger did not go as well as anticipated and Horizon began running short on pilots. Horizon cut so many flights, they actually have a surplus of pilots, but they are expecting so many to quit, that they think eventually they will have the right number of pilots. With that kind of strategy, its no wonder employees are upset. Pilots are very upset with how little they are flying and are fleeing as fast as they can - everyone I know that works at AS has submitted applications to work at other airlines in the last month. I would really like to see AS turn the ship around so it can be a race to the top rather than the bottom, but its not looking good. Both airlines definitely have their pros and cons depending on your purpose of travel - the grass isn't always greener on the other side.

jinglish

AS will be flying LAX-HNL and LAX-OGG as soon as VX ceases to exist in April.

And while you're correct to note that HA's announced routes aren't anywhere near a full overlap with AS's Hawaii service, so far HA has had two A321s delivered from an eighteen-aircraft order. There's going to be plenty of expansion by the time the last one leaves the factory in 2020.

ucdtim17

Those are mostly tiny routes though compared to the routes WN dominates (i.e. 3x Q400 on LAX-STS vs 15x 737s on LAX-OAK)

tphuang

The point is that A321NEO will enable them to add service to all 4 islands from non-LAX/SFO airports, where they were not able to before. And those AS flights that were very high yielding won't be so high yielding anymore.

As for WN with their ff base, they can just concentrate on adding service from airports where they dominate like OAK/SJC/SAN/SMF. These are airports where AS currently face the least competition to HI. I don't see why they can't sustain this service when they already fly transcon out of these airports.
exactly, this is a long term challenge for AS. Those 18 A321NEOs will open up a lot of routes that are now dominated by AS. I'm sure the AAG management is not ignoring this looming threat. I would put this as larger threat than WN entering HI.

except my point was that WN adding capacity on routes operated by AS. Yes, not every AS routes got increased capacity from WN next year. As for those secondary airports out of SAN you listed, they are not exactly high yielding routes. I don't see how having them is that important to AS profitability.

Just checking Q2 fares on OO/QX
SANMRY 119
SANSTS 157
SANFAR 140

by comparison for ones dominated by WN
SANSMF 150 for WN and 126 for OO
SANOAK 155
SANSJC 146 for WN and 135 for OO
SANSFO 143 for WN, 141 for VX and 165 for WN

Now considering WN is operating mainline vs OO here, they will have far lower cost. You get a sense of AAG yields on these secondary cali routes out of SAN.

btw just for fun, I did a look up the avg fare from Q2 of non-LAX/SFO west coast airport to non-HNL airport which AS dominates.
OAKOGG 317 for HA and 301 for AS
PDXOGG 390 for AS
SMFOGG 395 for AS
SANOGG 381 for AS
SJCOGG 327 for HA and 314 for AS
SEAOGG 417 for AS and 355 for HA
KOAOAK 348 for AS
KOASAN 343 for AS
KOASJC 349 for AS
KOASEA 413 for AS
LIHOAK 360 for HA and 340 for AS
LIHSAN 359 for AS
LIHSJC 351 for AS
LIHSEA 429 for AS

Notice how AS makes a killing out of the routes it monopolizes and how adding HA lowers their fare. We already know HA is entering SANOGG and they will probably enter KOA/LIH too at some point. And of course, there is the WN factor out of SAN/SJC/OAK.

B787938

To me, the AS and VX combo is starting to seem eerily similar to the UA and CO merger. Perhaps my view is very simple, but it seems like AS management is taking their employees' and customers' good will toward the airline for granted.

I don't see Brad and his team getting on a quarterly earnings release call and disparaging their best customers as "over entitled." At the end of the day, the AS management do like their employees and customers (unlike the former UA/CO team).

Nevertheless, silly cuts like not having pretzels or snack mix any longer, not giving a Biscoff away after 10 AM, or the cheapening of First class meals is apparent to customers. What will be more apparent to customers is if the culture and employee morale begins to flag as the merger really gets going in earnest in 2018.

Mileage Plan is still a great program - but a devaluation and cheapening of the AS value proposition beyond MP - such as an engaged, friendly work force - will be detrimental to the long term viability of this airline.

Anchorite

Last fall my husband, who is AS 75K and only 50,000 miles from AS Million Miler got a status match with Delta and announced that he was going to fly Delta from now on. He noticed a significant reduction in AS customer service even before the Seattle Times article. I am also AS 75K but I'm willing to keep flying Alaska for the time being whenever I can because I like the upgrades. I hope they up their game a little after this article. The Anchorage Daily News reprinted the article on its front page today.
It sounds like some of their cost cutting measures are penny wise and pound foolish.
As for the reduction in Biscoffs, my husband complained that they don't go with a glass of wine anyway.

ucdtim17

Seeing those numbers and then imagining how they'll look when you add WN onto many of the routes has gotta make for some queasy stomachs in Seattle now.

Edit: I don't think stomachs can be "queasy;" perhaps unsettled is the right word.