Upcoming AS Route Cuts
Feb 23, 2018, 6:39 pm
#106
Join Date: Oct 2010
Location: San Diego, Ca
Programs: AA 2MM LT PLT; AS MVP Gold75k; HHonors Diamond; IHG PLT
Posts: 3,502
I have to believe that there are lots of disaffected AA/DL/UA SFO/LAX elites, who don't obsess over lie-flat seats for domestic travel, find AS' lower qualification thresholds, generous elite benefits and award partners as a compelling alternative.
In my case (SAN-based), I will choose an AS nonstop to the east coast and Hawaii over a connection in LAX, DFW or PHX EVERY TIME. I am fortunate to have earned LT PLT status on AA, have that as a fallback, but now consider AS my carrier of choice.
After all is said and done, AS may have no choice but to give up much of the low-margin VX business, continue to carve out niche service where there are profits to be had, resulting in another chapter in the MBA textbook on M&A failures.
In my case (SAN-based), I will choose an AS nonstop to the east coast and Hawaii over a connection in LAX, DFW or PHX EVERY TIME. I am fortunate to have earned LT PLT status on AA, have that as a fallback, but now consider AS my carrier of choice.
After all is said and done, AS may have no choice but to give up much of the low-margin VX business, continue to carve out niche service where there are profits to be had, resulting in another chapter in the MBA textbook on M&A failures.
Feb 23, 2018, 8:06 pm
#107
Original Poster
Join Date: Apr 2003
Programs: B6 Mosaic, Bonvoy LT Titanium (x SPG LT), IHG Spire, UA Silver
Posts: 5,847
The problem for AS—even with SEA based transcons is that the B6 product in economy is also way better AND cheaper. This is not to even mention that lie flats to BOS are going for $399 on B6 and double or more for AS. Would you be willing to pay double or more for an inferior AS product? The marginal perks achieved through Mileage Plan would not be worth it. You also get free entertainment and high speed internet on B6. As the competition ramps up the value proposition of AS falls off the cliff.
Feb 24, 2018, 6:52 am
#109
Join Date: Nov 2001
Location: Portland, Oregon
Programs: Hilton Platinum, Alaska MVP Gold
Posts: 2,363
Yeah, which is why "ditch SFO for LAX" is so peculiar an argument. It's HARDER to make money on a route when five airlines fly it, not just two. Look at how many times SJC-LAX has been a flop for AS (and it was one for VX, too)- or LAX-CUN (flop for both AS and VX).
I always viewed buying Virgin America as a way to eliminate a competitor on CA routes and to prevent Jet Blue from buying it. I never saw it more than that. The airplanes are different type. Brand loyalty is not to Alaska but Virgin Air in SFO. Will all those Airbus planes be retained when leases come due?
Who knows what any of this really means.
Feb 24, 2018, 6:56 am
#110
Join Date: Nov 2001
Location: Portland, Oregon
Programs: Hilton Platinum, Alaska MVP Gold
Posts: 2,363
B6 establishes its first base in JFK, which is such a large market that it can’t really be compared to DL moving into SEA.
BOS is pretty comparable to SEA in size (or at least was before DL built up SEA) and in geography (being in the corner of the country, so limited in domestic connection opportunities). But B6 moved in after AA essentially ended their focus city operation in favor of the cornerstone strategy. So BOS was devoid of a carrier with a broad network and therefore ripe for a lower-cost airline that can appeal to upper middle class leisure travelers (a market that I think all three of VX, B6, and AS are more focused on that the big three). There really aren’t any similar opportunities for AS/VX at this point, at least not ones that are obvious to me. So I don’t think it’s fair to say that AS/VX are failures for being unable to move into SFO and build up a profitable and loyal base as quickly as B6 did in BOS/JFK and DL did in SEA (which was the genesis of this side conversation).
Feb 24, 2018, 8:32 am
#111
Join Date: Dec 2016
Posts: 1,485
AS just needs to figure out what they need to do with the assets they got. Flying all of legacy VX routes is not going to work, since the most profitable routes all are now getting hammered by mint. As part of the merger, they now have 10 gates at LAX for about 90 flights. That’s a solid #5 in the market. Nobody is going to make a lot of money in LAX, but it’s a necessary evil if you want to have a solid west coast strategy. Keep increasing presence from PNW/SFO to BUR/ONT/SNA. Doing OAK/SJC to BUR/ONT/SNA is too costly at the moment. Start from where you are stronger than WN which is SEA/PDX/SFO and add flights to these secondary LA basin markets.
At Bay area, you have a split operation at SFO/SJC. There really isn’t any reason to fly transcon routes like EWR-SJC when you have presence at SFO, those are terribly low yielding Maybe concentrate on west coast routes and mid con routes out of SJC. At SFO, add routes that make things viable for ff and businesses. It’s going to cost money to sustain such an operation, but they already spent $2.6 billion to be in this position. Why would you just give up?
Defend SEA at all cost. This is your home base and your profit center. DL is blowing a lot of money to build up their operation there. There is no way DL is profitable at SEA imo. So you keep adding capacity on the markets that are competing against DL. When there is a recession (and there will be one soon), DL is going to retreat or cut down from all the markets that are less profitable and SEA will be one of them.
And sorry to the SAN/PDX ff, those 2 stations are going to be the ones taking the hit from this. PDX has very little competition, so they don’t need to focus there. SAN this and next year will become very low yielding with WN adding capacity + added HI competition from WN/HA + transcon pressure from mint (BOS was by far their highest yielding transcon out of SAN).
As for DAL operation, those LGA/DCA routes are ridiculous. They are horribly low yielding against AA’s hub-to-hub operation. The walk prices on LGA-DAL is in the low $100s for a 4 hour flight on E75. How is that anything but hemorrhaging money? Sell those slots and add more frequency to west coast, where you can probably really hurt WN.
There is big difference bw B6 at BOS and AS at SEA. AS has far longer history at SEA and faces much less competition and has much greater market share. Even at this point, B6 is only at 31% market share domestically and something like 25% market share overall at BOS. They have very few monopolies and are dominated on most of the major business markets out of BOS, which are mostly AA/UA strongholds. In a sense, it makes DL incursion harder because they have to go into a lot of routes that are B6 + one of AA/UA/WN duopolies vs at SEA which have a lot of routes heavily dominated by AS. B6 had to enter many markets that were legacy strongholds in order to build up to their current position at BOS. Entering LGA/ATL-BOS in fact triggered the recent BOS expansion by DL, which imo hasn't hurt B6 all that much, but is putting a huge dent on DL profits.
They had suffer through several years of pain at BOS before the station became really profitable. Same with FLL, which was the least profitable focus city, but now in the past few quarters have really climbed up the charts now that they have started winning FLL point of sale. My prediction is that once they are out of room to expand at BOS/FLL, they will move into IAD and really challenge UA there.
If anything, B6 expansion at BOS/FLL are good blueprints for what AS needs to do to build its SFO/SJC operation against UA/WN.
At Bay area, you have a split operation at SFO/SJC. There really isn’t any reason to fly transcon routes like EWR-SJC when you have presence at SFO, those are terribly low yielding Maybe concentrate on west coast routes and mid con routes out of SJC. At SFO, add routes that make things viable for ff and businesses. It’s going to cost money to sustain such an operation, but they already spent $2.6 billion to be in this position. Why would you just give up?
Defend SEA at all cost. This is your home base and your profit center. DL is blowing a lot of money to build up their operation there. There is no way DL is profitable at SEA imo. So you keep adding capacity on the markets that are competing against DL. When there is a recession (and there will be one soon), DL is going to retreat or cut down from all the markets that are less profitable and SEA will be one of them.
And sorry to the SAN/PDX ff, those 2 stations are going to be the ones taking the hit from this. PDX has very little competition, so they don’t need to focus there. SAN this and next year will become very low yielding with WN adding capacity + added HI competition from WN/HA + transcon pressure from mint (BOS was by far their highest yielding transcon out of SAN).
As for DAL operation, those LGA/DCA routes are ridiculous. They are horribly low yielding against AA’s hub-to-hub operation. The walk prices on LGA-DAL is in the low $100s for a 4 hour flight on E75. How is that anything but hemorrhaging money? Sell those slots and add more frequency to west coast, where you can probably really hurt WN.
BOS is pretty comparable to SEA in size (or at least was before DL built up SEA) and in geography (being in the corner of the country, so limited in domestic connection opportunities). But B6 moved in after AA essentially ended their focus city operation in favor of the cornerstone strategy. So BOS was devoid of a carrier with a broad network and therefore ripe for a lower-cost airline that can appeal to upper middle class leisure travelers (a market that I think all three of VX, B6, and AS are more focused on that the big three). There really aren’t any similar opportunities for AS/VX at this point, at least not ones that are obvious to me. So I don’t think it’s fair to say that AS/VX are failures for being unable to move into SFO and build up a profitable and loyal base as quickly as B6 did in BOS/JFK and DL did in SEA (which was the genesis of this side conversation).
They had suffer through several years of pain at BOS before the station became really profitable. Same with FLL, which was the least profitable focus city, but now in the past few quarters have really climbed up the charts now that they have started winning FLL point of sale. My prediction is that once they are out of room to expand at BOS/FLL, they will move into IAD and really challenge UA there.
If anything, B6 expansion at BOS/FLL are good blueprints for what AS needs to do to build its SFO/SJC operation against UA/WN.
Feb 24, 2018, 11:16 am
#112
Join Date: Sep 2012
Posts: 1,331
AS just needs to figure out what they need to do with the assets they got. Flying all of legacy VX routes is not going to work, since the most profitable routes all are now getting hammered by mint. As part of the merger, they now have 10 gates at LAX for about 90 flights. That’s a solid #5 in the market. Nobody is going to make a lot of money in LAX, but it’s a necessary evil if you want to have a solid west coast strategy. Keep increasing presence from PNW/SFO to BUR/ONT/SNA. Doing OAK/SJC to BUR/ONT/SNA is too costly at the moment. Start from where you are stronger than WN which is SEA/PDX/SFO and add flights to these secondary LA basin markets.
At Bay area, you have a split operation at SFO/SJC. There really isn’t any reason to fly transcon routes like EWR-SJC when you have presence at SFO, those are terribly low yielding Maybe concentrate on west coast routes and mid con routes out of SJC. At SFO, add routes that make things viable for ff and businesses. It’s going to cost money to sustain such an operation, but they already spent $2.6 billion to be in this position. Why would you just give up?
Defend SEA at all cost. This is your home base and your profit center. DL is blowing a lot of money to build up their operation there. There is no way DL is profitable at SEA imo. So you keep adding capacity on the markets that are competing against DL. When there is a recession (and there will be one soon), DL is going to retreat or cut down from all the markets that are less profitable and SEA will be one of them.
And sorry to the SAN/PDX ff, those 2 stations are going to be the ones taking the hit from this. PDX has very little competition, so they don’t need to focus there. SAN this and next year will become very low yielding with WN adding capacity + added HI competition from WN/HA + transcon pressure from mint (BOS was by far their highest yielding transcon out of SAN).
As for DAL operation, those LGA/DCA routes are ridiculous. They are horribly low yielding against AA’s hub-to-hub operation. The walk prices on LGA-DAL is in the low $100s for a 4 hour flight on E75. How is that anything but hemorrhaging money? Sell those slots and add more frequency to west coast, where you can probably really hurt WN.
There is big difference bw B6 at BOS and AS at SEA. AS has far longer history at SEA and faces much less competition and has much greater market share. Even at this point, B6 is only at 31% market share domestically and something like 25% market share overall at BOS. They have very few monopolies and are dominated on most of the major business markets out of BOS, which are mostly AA/UA strongholds. In a sense, it makes DL incursion harder because they have to go into a lot of routes that are B6 + one of AA/UA/WN duopolies vs at SEA which have a lot of routes heavily dominated by AS. B6 had to enter many markets that were legacy strongholds in order to build up to their current position at BOS. Entering LGA/ATL-BOS in fact triggered the recent BOS expansion by DL, which imo hasn't hurt B6 all that much, but is putting a huge dent on DL profits.
They had suffer through several years of pain at BOS before the station became really profitable. Same with FLL, which was the least profitable focus city, but now in the past few quarters have really climbed up the charts now that they have started winning FLL point of sale. My prediction is that once they are out of room to expand at BOS/FLL, they will move into IAD and really challenge UA there.
If anything, B6 expansion at BOS/FLL are good blueprints for what AS needs to do to build its SFO/SJC operation against UA/WN.
At Bay area, you have a split operation at SFO/SJC. There really isn’t any reason to fly transcon routes like EWR-SJC when you have presence at SFO, those are terribly low yielding Maybe concentrate on west coast routes and mid con routes out of SJC. At SFO, add routes that make things viable for ff and businesses. It’s going to cost money to sustain such an operation, but they already spent $2.6 billion to be in this position. Why would you just give up?
Defend SEA at all cost. This is your home base and your profit center. DL is blowing a lot of money to build up their operation there. There is no way DL is profitable at SEA imo. So you keep adding capacity on the markets that are competing against DL. When there is a recession (and there will be one soon), DL is going to retreat or cut down from all the markets that are less profitable and SEA will be one of them.
And sorry to the SAN/PDX ff, those 2 stations are going to be the ones taking the hit from this. PDX has very little competition, so they don’t need to focus there. SAN this and next year will become very low yielding with WN adding capacity + added HI competition from WN/HA + transcon pressure from mint (BOS was by far their highest yielding transcon out of SAN).
As for DAL operation, those LGA/DCA routes are ridiculous. They are horribly low yielding against AA’s hub-to-hub operation. The walk prices on LGA-DAL is in the low $100s for a 4 hour flight on E75. How is that anything but hemorrhaging money? Sell those slots and add more frequency to west coast, where you can probably really hurt WN.
There is big difference bw B6 at BOS and AS at SEA. AS has far longer history at SEA and faces much less competition and has much greater market share. Even at this point, B6 is only at 31% market share domestically and something like 25% market share overall at BOS. They have very few monopolies and are dominated on most of the major business markets out of BOS, which are mostly AA/UA strongholds. In a sense, it makes DL incursion harder because they have to go into a lot of routes that are B6 + one of AA/UA/WN duopolies vs at SEA which have a lot of routes heavily dominated by AS. B6 had to enter many markets that were legacy strongholds in order to build up to their current position at BOS. Entering LGA/ATL-BOS in fact triggered the recent BOS expansion by DL, which imo hasn't hurt B6 all that much, but is putting a huge dent on DL profits.
They had suffer through several years of pain at BOS before the station became really profitable. Same with FLL, which was the least profitable focus city, but now in the past few quarters have really climbed up the charts now that they have started winning FLL point of sale. My prediction is that once they are out of room to expand at BOS/FLL, they will move into IAD and really challenge UA there.
If anything, B6 expansion at BOS/FLL are good blueprints for what AS needs to do to build its SFO/SJC operation against UA/WN.
Feb 24, 2018, 11:36 am
#113
Join Date: Apr 2009
Location: YYF/YLW
Programs: AA, DL, AS, VA, WS Silver
Posts: 5,950
I always viewed buying Virgin America as a way to eliminate a competitor on CA routes and to prevent Jet Blue from buying it. I never saw it more than that. The airplanes are different type. Brand loyalty is not to Alaska but Virgin Air in SFO.
I think absolutely everyone who has commented on this thread and the other similar ones agrees on that point.
Feb 24, 2018, 11:43 am
#114
Join Date: Dec 2004
Location: SFO
Programs: BART Platinum, AA Plat Pro
Posts: 1,158
My curiosity got the better of me, and I took a bit of time to tabulate the latest available O&D stats (Q4 2016 to Q3 2017). These are (10%) passenger numbers from the SF market (SFO/OAK/SJC) for the top 50. Although I'm using airport codes here for easy identification, they are market level stats (for example, LAX includes BUR, LGB, SNA, JFK includes EWR and LGA, etc.). Sorry about the lack of formatting.
Market (from SFO) Passengers
Market (from SFO) Passengers
- LAX 464819
- JFK 197296
- LAS 153402
- SAN 138973
- SEA 134467
- ORD 102605
- DEN 87734
- IAD 85274
- PDX 83364
- PHX 78721
- BOS 77134
- DFW 66136
- HNL 47756
- SLC 44595
- ATL 41872
- FLL 40706 (note: FLL gets more than MIA!)
- IAH 39855
- AUS 37254
- OGG 34409
- MSP 34308
- MCO 29995
- PHL 29192
- DTW 25550
- MSY 16920
- STL 15802
- RDU 15294
- LIH 15214
- CLT 14628
- KOA 14429
- MCI 14175
- BNA 14160
- ABQ 13109
- CLE 12919
- TPA 12020
- PSP 11267
- IND 10788
- CVG 10674
- PIT 10645
- CMH 9890
- BOI 9625
- RNO 9342
- SAT 9315
- MKE 8940
- TUS 8453
- GEG 8096
- BDL 7450
- OMA 6271
- EUG 5402
- MEM 4478
- BUF 4362
Feb 24, 2018, 5:06 pm
#115
Join Date: Dec 2004
Location: SFO
Programs: BART Platinum, AA Plat Pro
Posts: 1,158
I have to believe that there are lots of disaffected AA/DL/UA SFO/LAX elites, who don't obsess over lie-flat seats for domestic travel, find AS' lower qualification thresholds, generous elite benefits and award partners as a compelling alternative.
In my case (SAN-based), I will choose an AS nonstop to the east coast and Hawaii over a connection in LAX, DFW or PHX EVERY TIME...
In my case (SAN-based), I will choose an AS nonstop to the east coast and Hawaii over a connection in LAX, DFW or PHX EVERY TIME...
After all is said and done, AS may have no choice but to give up much of the low-margin VX business, continue to carve out niche service where there are profits to be had, resulting in another chapter in the MBA textbook on M&A failures.
Feb 24, 2018, 9:01 pm
#116
Join Date: Feb 2014
Location: BOS
Programs: B6/Mosaic/AF/VX/AS Gold Hertz PC HH Dia. AMEX Plat SPG/Marr Gold Nat. EE FPC Plat
Posts: 833
But consider this - LAX has been a loyal Alaska hub and connection destination for various partners for decades. Brand loyalty is strong in LAX. In SFO the Alaska trade name is not as much. Yep, it bought Virgin America, but it's not Alaska and its not the same airline as Virgin America. Will 100% of those customers stay?
I always viewed buying Virgin America as a way to eliminate a competitor on CA routes and to prevent Jet Blue from buying it. I never saw it more than that. The airplanes are different type. Brand loyalty is not to Alaska but Virgin Air in SFO. Will all those Airbus planes be retained when leases come due?
I always viewed buying Virgin America as a way to eliminate a competitor on CA routes and to prevent Jet Blue from buying it. I never saw it more than that. The airplanes are different type. Brand loyalty is not to Alaska but Virgin Air in SFO. Will all those Airbus planes be retained when leases come due?
A B6/VX combo would have been a winner and a strong competitor not to just AS, but the legacy carriers.
I'm now in the B6 camp, especially with Mint. AS will need to definitely adjust F pricing where Mint competes with them. Last spring it was cheaper to go SEA > SFO in VX F and then SFO>BOS in Mint than AS non stop F to Boston.
I had hoped against hope that AS would absorb what made VX special, but with time, it shown me nothing but tone deafness.
Feb 24, 2018, 9:02 pm
#117
Join Date: Jun 2011
Posts: 93
My guess is that AS was hoping that the Q400's cost advantages could grab at least a large share of a few of the smaller markets (e.g. BFL/RDD/ACV) from UX at SFO, which would give them a few seats per flight of feed. We know what happened to that idea.
Feb 24, 2018, 9:42 pm
#118
Moderator, Delta Skymiles and Mileage Run
Join Date: Dec 2009
Location: Seat 2A
Programs: DL Diamond/MM, Hyatt Diamond, former AS MVPG 75K, Marriott Titanium, Hilton Gold
Posts: 2,940
Folks:
I appreciate the passion around this topic, however, personal attacks will not be tolerated. I have cleaned up a number of posts and deleted others here. Please stay on topic, discussing the route cuts.
Ryandc99, Moderator Alaska Airlines
I appreciate the passion around this topic, however, personal attacks will not be tolerated. I have cleaned up a number of posts and deleted others here. Please stay on topic, discussing the route cuts.
Ryandc99, Moderator Alaska Airlines
Feb 25, 2018, 4:50 am
#119
Join Date: Dec 2016
Posts: 1,485
It looks like starting from May 20th, SFO-MEX is severely cut down. The prices on all the still scheduled days are showing $353. Not sure if it's going to get completely or just reduction in schedule.
LAX-FLL is down to once daily starting the same week.
Edited: now SFO-MEX is gone completely. LAX-MEX gets the second daily back.
LAX-FLL is down to once daily starting the same week.
Edited: now SFO-MEX is gone completely. LAX-MEX gets the second daily back.
Last edited by tphuang; Feb 25, 2018 at 7:39 am
Feb 25, 2018, 6:39 am
#120
Original Poster
Join Date: Apr 2003
Programs: B6 Mosaic, Bonvoy LT Titanium (x SPG LT), IHG Spire, UA Silver
Posts: 5,847
One has to wonder if they are expecting another QX meltdown and need the aircraft just in case, if they will just keep more spares around for the summer, or will shift more capacity to the PNW. They haven’t done much route specific advertising and I doubt many people even knew AS was flying to MEX or had service to MSP from SFO. The more west coast campaign may actually be hurting them as people assume they don’t go anywhere but the West Coast and people thinking they now go everywhere from the West Coast find they go to very few places.