milypan

Why? The current AS strategy is to double down on the PNW + AK and then try other random routes to see if they work. How would allowing B6 to buy VX have changed that? Certainly B6 operating out of SFO + LAX would not have posed any significant threat to the SEA, PDX, and ANC hubs. The only new nonstop routes competing with AS would have been SFO-PDX/SEA, and SFO/LAX are not very useful as connecting hubs from the PNW (in particular, they are less threatening than MSP, DEN, SLC, and ORD, which AS already contends with anyway).

ashill

I don't know much of anything about WN or B6's route planning, but DL tries and fails on routes all the time. They have for years. It's been a very common refrain in the AA forum to complain about how DL tries new routes all the time (some of which fail) while AA doesn't.

AS Flyer

I'm talking about Alaska's strategy v.v. SFO, not Mint vs AS First. I've already said that we have to acknowledge that AS is not going after the rock bottom Business Class fare market. They are going after the frequent leisure traveler that is interested in the prospect of a free upgrade. It's clear that there are going to be some adjustments in the schedule as they let B6, AA, UA and DL flight it out for the premium transcon market and the rock bottom fares that B6 is bringing to it. I can assure you that the transcon F cabins are not going out with empty seats on a routine basis. People are paying to upgrade at the gates when available (which is a premium) and the frequent flyers are often enjoying a premium seat when paying for a seat in coach.

They cut 3 under performing markets that VX operated and got right out of 2 markets that AS added post SOC. They've kept 10 markets that were added post SOC and added frequency in 1 while drawing down frequency in several others that were also under performing for VX. Let's face it, if VX was doing so well their investors wouldn't have bee so anxious to ditch them - and that means that there is going to be some massaging to do to get things where AS would like them to be.

They believe they have a profitable strategy that they have only begun to execute in the last year. You've been running around screaming about the sky falling here and on the other forum for a while now. Unless you're sitting on the board or consulting with Brad Tilden and co., I'll trust Alaska management to make some smooth moves and show us that they had a plan vs your monday morning quarterbacking. This merger was not first considered when it was learned that B6 was throwing their name in the hat - that was the do it or die time and AS had their back against the wall. They pulled the trigger and here we are. The other option would not have been a good one. And I have to ask, how do you know the AS strategy isn't "too great at the moment"? They've added 10 markets that are sticking, that they're working on developing, that they see promise in. They have reduced frequencies in a handful of others where the VX books were not showing them to be huge money makers, and they saw that first hand for a short period themselves. How does this show you that they don't have a strategy? In every post you compare AS to B6 and suggest that if they're not competing directly with B6 by offering cheap lie flat seats they can't possibly compete. AS has, for a very long time now, been able to lead the industry in ROIC. They are massaging this merger and working it to a place of comfort. Finally, on the whole B6 topic - They are offering Mint to/from up to 3 destinations from the west coast. AS offers transcon service to 12 destinations. JFK, BOS and FLL are not the only cities in the network that AS can make money.

AS has lead the industry in RASM and ROIC for a lot of years. To me, it's no surprise that the RASM is going to fall as they combine a highly profitable network with a network that was highly competitive and struggling to make money. AS has been really good at making money over the years, I'm willing to give them the chance to continue to prove they can do it - but I'm not expecting magic in the first year - nobody is.

eponymous_coward

As a matter of fact, WN gave up on SEA-GEG and PDX-GEG. Obviously this makes WN the worst airline ever because the second worst airline ever, AS, drove them off those routes.

Now, can we return to whining and moaning about the second worst airline ever, and explaining why B6 and VX were and are the best airlines ever? Thanks.

AS Flyer

Because it was clear to AS, and most observers, that growth at SEA was becoming constrained by facilities and competition - not to mention, AS had already added a great deal of the cities that made any kind of sense at all for a largely domestic airline. PDX and ANC have room, but the largest area in the AS network for growth possibilities is in CA. Probably 6-8 years ago, Brad Tilden told employees at an all employee training event that his vision was for AS to become the premier west coast airline. You can't do that without expanding beyond SEA, PDX and ANC. When B6 started getting serious about buying VX it meant a larger competitor coming in to the west coast, establishing a foothold and growing at a very rapid pace. AS could have grown organically but not rapidly enough to beat back B6. And lets face it - B6 has a nice product. Once people on the west coast started flying them up and down the coast on a much larger network, AS would have had a MUCH harder time. It would have been but a matter of time before someone else bought AS, IMO.

chrisl137

And business travelers who are only allowed to book Y, which is no small number. Even if AS F is just a bigger seat and maybe a better snack, it's a higher probability upgrade than B6 (paid upgrade only) or UA (1Ks complain about not getting upgrades, and boarding group 1 can be half the plane). I don't fly AA or DL much, so I don't keep track of those forums, but I'd be surprised if the upgrade chances were much higher than on UA. As the perks of FF status shrink, getting to higher levels doesn't get you as much, so being lower level on more airlines may be just as good.

AS is competitive with WN on the routes they both fly that I travel. Unless there's a big price difference, I lean toward AS because I can reserve a seat and don't have to worry about checking in early and can get more legroom.

The VX merger isn't too far in the past, and looking at any of the other recent mergers, they took years to shake out. UA/CO is still not completed and is causing problems for them.

tphuang

never said they went out empty, but that they are not getting enough paid F outside of BOS-SEA. The point of having F cabin is you want people to pay a lot extra for them. If it's full of ff getting auto upgrades paying $300 O/W or free upgrade paying for cheap y fares, that's not good proposition. Sometimes in the second half of this year, we will get to see the yield numbers on some of these routes. We will see how well it compares YoY. It's hard for me to believe that routes like BOS-SAN will not suffer.

Never said VX was doing well, but AS now has that problem in hand, so they need to figure out what to do with it.

A couple of things:
1) AS has not led industry in RASM. They have been been in very upper echelon in profit margin for many years. That's a product of been able to dominate PNW/Alaska + those secondary cali market to HI. What they did worked well. Nobody is disputing that. The question is whether they can translate it to more competitive markets like SFO/LAX or airports dominated by WN. That's the question here and where a lot of debates are.
2) I've stated various challenges that AS faces and transcon is a small part of it. UA is giving them a lot of pressure at SFO, WN is adding a lot of capacity in the intra-cali + cali-PNW market, HI will become more challenging. WN recently revised their RASM downward this quarter. So the intra-cali market is clearly becoming a bloodbath.
3) On the topic on transcon, NYC/BOS/South Florida + DCA/IAD are the end point of the highest yielding transcon flights. You are not going to make money against fortress hubs of CLT/ATL or less profitable airports like BWI/TPA/MCO. I've seen some of the numbers on flights like BWI-LAX/SAN and MCO-LAX/SFO. I really don't think they are making money off them.
4) As for the various markets we've seen them add out of SFO that are sticking, T-100 LFs don't look great. But it's certainly encouraging that they are keeping those routes going on to see how they develop over time. My disagreement is with their strategy. I see greater benefit in going strong and adding frequencies at selected important markets rather than going once daily to many markets to see which stick.
5) I've said numerous times there is a lot of potential for AS in bay area. Given their cost profile, they should be able to run a very profitable operation over time even with UA's presence. I've used B6 who has a similar cost profile as a justification to my belief. They have profit centers in SEA and Alaska that should be able to fund a protracted fight against UA/WN until reaching good margins. I think that's a note of optimism going forward rather than putting them down.
6) I'm just a silly person spouting off theories from a computer. Please don't take me too seriously.

sfozrhfco

This is very true. This is more like the weapons of mass destruction case the Bush administration made. An excuse by management to make up for decision acted on by fear and not fully thought through. AS never had to concentrate all their efforts on ending up as a secondary carrier on the West Coast and with very little presence in the rest of the world. They didn't think through the product they needed to compete as a small carrier in a hyper competitive market. They didn't think through how they would retain the loyal VX flyers. They now have their hands full with no clear path forward.

jiburi

I wanted to get an update of post merger routes cuts and adds but seem many of you have returned to discussing AS/VX merger.

Can you bring merger topic in prior thread and get back to topic?

Thanks
Jiburi

diver858

A friend convinced me to join them for a family wedding in Boston, in late June. AS and B6 Y fares out of SAN are competitive Thursday and Friday (~$300), with Mint a staggering (low) $449 on 2 of the 3 flights - 3 months out! For the Sunday return, B6 Y is also on the order of $300, AS $170. Based on our schedule, we decided to take the B6 redeye in Mint, AS Y for the evening return - easy Y+ upgrade, shot at F.

Based on my limited experience, I don't see how B6 will be able to justify Mint on such routes, when they are apparently having difficulties effectively giving it away during a prime travel weekend.

TProphet

PHL makes sense because that's AA's primary hub for Europe flights. AA remains a partner. What's the sense in a lot of service to Minneapolis unless there is point-to-point demand?

milypan

nova08

Up until recently SFO-PHL was a redeye, at which point SFO-PHL had 3 redeye flights across all carriers. LAX remains a redeye giving LAX-PHL 4 redeye flights across all carriers. That just seems like too many redeye's for transcon markets that already seem to under preform compared to other northeast markets.

Skyjumper

AS certainly isn't making an effective effort to keep customers in SFO other than those that need to travel to the PNW. They're bleeding them right and left, especially business travelers. United is underpricing them and flies to where people want to go without connecting in Seattle. It's really quite sad, though not unexpected.

WebTraveler

Thinking this through, I realized that Virgin America has had two profitable years in its history, and that maybe is the writing on the wall - that long term a huge SFO operation is not so sustainable. Alaska has its core markets - and those are underserved markets; unless it involves Seattle, Alaska is hesitant to compete with a competitor's hub flight.

What I am still trying to figure out is WHERE all these Airbus planes are going with the cuts to SFO, they need to be going somewhere in the system, but where?