eponymous_coward

That sounds about right; AS isn't going to go buy some used 757s to be able to have a reasonable amount of Y on the plane to go along with a lie-flat config, and everything else means coughing up Y seats. The 737Max-10 (which is realistically the other candidate) isn't available until July 2020, and I can imagine AS is a little nervous about 737Maxes at the moment (they've ordered -9s, I imagine Boeing would let them switch to -10s though).

VegasGambler

I flew an awful lot of SFO-NYC and back for $127 each way last year. I understand that this is the lowest available fare and not the average. It's still widely available for $129 but it will book into X now. $159 for main.

Eastbay1K

Recently they've been this low - way too low for sustainability. Historically, over the last 30 years, they've been far from that low.

Eastbay1K

The CM Max-9 has a 16 / 24 / 126 config - not too bad with 16 lie flats and 4 rows of premium Y. Make it 12 up front and you get another 12 in the back, for 12 / 24 /138. I don't think that's a money-losing configuration, except at super low fares.

sltlyamusd

sfozrhfco

10 planes would not be worth the expense, effort, and staff training needed. Plus if one goes out of service for whatever reason, there would be nothing close to replace it which would be a major disappointment for passengers. They have to either go all in or just forget about it. Given they haven't even thought about it seriously yet, it would be years before it would even be possible/probable for them to take on this project. They will continue on as is and hope for the best.

sfozrhfco

The sale level in in the late 80s was $99 and you can still find sales from SFO/LAX-JFK/BOS today. By the way, in today's dollars that is around $202 and thus the lowest fares have been in steady decline. The routes they are losing money on are SFO/LAX-JFK/BOS/EWR. There is a lot of capacity on these routes and adding bigger planes means that more seats are going to be sold at rock bottom prices in the off season to fill the seats. There is a reason they are offering double miles all year and basically giving away awards seats with the miles earned. It is not because they have they superior pricing power and plenty of extra revenue to throw away.

Selling F/J seats are what keep the competitors afloat on these routes. Without that revenue, there is little hope for AS to improve upon their situation on these routes unless there is a lot of competitive capacity reduction--which seems quite unlikely.

sltlyamusd

B6 Mint started as a small number of planes/routes and gradually expanded. The problem for AS is that B6 Mint has already gained a lot of market share over the past years, and AS might be too late to get into the game. Also, they don't have the same international traffic to feed into premium transcon services like AA/DL/UA. If there is unmet demand for a premium product in certain markets, it could be worth it for AS to reconfigure 10 planes initially as a pilot program, then lease/acquire more aircraft over time and expand to other routes. But given the existing competition and lack of any planning so far, I agree it is not a worthwhile undertaking.

eponymous_coward

Corporate deals to sell F/J (and Y), perhaps. Mint is taking a meatax to J/F fares in those markets (and only AA has a real 3-class product, and I hear anecdotally it's often used as "employee class"). B6, VX premerger and AS now are all not particularly running a lot of corporate deals. They're chasing affluent people paying $. How many of them are there? Can you split them and make money?

AS is basically fighting with four airlines who have hubs on TWO sides of NYC-CA: B6, AA, DL and UA- they can't offer connectivity out of JFK/EWR (and good luck blaming AS for that, VX's one-offs out of JFK like FLL/LAS/PSP were flops, though maybe they wouldn't have been if they hadn't been screwing around with DAL and buying LGA/DCA slots and they had put those planes into JFK/EWR... oh well).

The evidence that VX was making amazeballs money pre-acquisition by having hubs on only one side (while being smaller than WN or DL in SFO) has never been presented to me. I think they were getting by once they stopped the 2007-2012 massive VC bleeding that required additional funding rounds (and that seems to be what the financials I paid attention to say), but B6 Mint and a bunch of low priced fares in those markets would have hurt them even worse than AS (since AS is nowhere near as badly exposed to all four of them) if we imagine a world where the B6/AS bidding war never happened.

I think this is way overrated when LAX/JFK/SFO have a ton of connectivity. Who flies LAX-JFK-LHR in premium classes when you can fly LAX-LHR, other than FTers scoring a deal or indulging an airplane fetish? The connectivity into premium transcon is probably domestic- PDX-SFO/LAX-EWR makes a bit more sense, but I suspect it's a ton of O/D in markets where you have a bunch of rich people or corporate money.

VegasGambler

According to wikipedia, in 2015 they had $340M profit on $1.53B. If a 22% profit margin on one and a half billion dollars is "just getting by" then I think a lot of companies wish they were "just getting by".

jinglish

Exactly. B6 has already expanded Mint out to markets like JFK-SAN and SEA-BOS; where would AS even be able to add lie-flats where nobody's already meeting demand?My anecdata from an AA FA friend supports this. She and her boyfriend can make a date out of LAX-JFK F without much risk.

channa

Nobody said an airline with ~50 planes was making money like DL or WN. But for an airline with ~50 planes, they did fine after their startup period.

jjmadison

Here is a picture of an F seat from my flight earlier this week. It's ugly... and entirely avoidable with basic maintenance. Some seats are notably worse.

As someone who owns an old car with premium leather, I know from experience that a little leather conditioner goes a long way towards maintaining the leather, cleaning the dirt and grime, and protecting the seat from premature wear. High-quality leather requires this sort of regular care. It's not expensive or complicated. The Airbus seats were in impeccable condition until a year ago. Since maintenance ceased on the seats last April, they have been in steady decline.

It's now at the point where I've witnessed passengers ask the FA why their seat had not been cleaned. In sum, it is a bad look for Alaska and turns off F rev customers. It also sends a message that the aircraft fleet is not being properly maintained, which is worrisome to people who care about safety. In the minds of customers, a visible lack of cosmetic maintenance connotes a similar lack of mechanical maintenance, even if it is not truly representative. It's the same logic in restaurants; seeing a dirty dining room makes one think the kitchen is also filthy. IMHO, that alone should make it worth the small cost to Alaska to properly maintain F seats (even if they are replacing interiors this year).

RAD_PDX

Yikes! People weren't exaggerating. Pretty darn indefensible...

williwaw

From today's earnings call that relates to F:
(more here: Q1 2019 Results - Earnings Call)

Q&A from Hunter Keay: Okay. Chris and Brad, and then couple of years ago you guys resisted the urge of lie-flats because a couple - one of the reasons at least was because you thought you might make yours - your airline more prone to a downturn, which I felt was actually really insightful. But look, you've said before you try to attract new customers and the marketplace has changed. Not only Pacific Northwest, but now you're in these markets in San Francisco and Los Angeles. You've got the credit card, and your competitors are having some success with these lie-flat seats. So how are you thinking about that now? Are you fighting the urge to do it? Or is it something you guys have just decided we'll never going to do this and that's just who we are.

Shane Tackett: Hunter, it's Shane. I think I answered this question before. Our thinking haven't changed. And in fact, if you look at some of the pricing softness in the markets that you're talking about, a lot of that is actually on the premium side of the cabin. And so I'm not sure that the economics would be any different. In fact, they would probably be more challenging at this point.

I think the question about do we have a good enough first-class product, which is again a very small percentage of the overall market that demands that. Is it good enough to compete with lie flat, I think it's a good question, and it's one we're sort of humble about and we're just - we're going to take a little more time to understand if we need to go a different route. We don't really have the aircraft to do lie-flat today. We've got some of the A321s. That's the aircraft you would want to do it on. So we said before, if we needed to go there we could. But right now, our sort of view is more loyalty and upgrade into our premium cabins, and less sort of all-out looking to yield in the premium cabins and that still works for us. Throughout the system, we think it will. If that changes, we'll be able to go lie-flat if we have to.

Analyst Brandon Oglenski Q&A: Okay, I appreciate that. And then I wanted to follow up on the question about business-class versus your domestic First Class. Have you guys put the 900 on the transcon routes yet? And are you getting the relative revenue production out of the aircraft that you thought you would? I guess, more from like a square foot perspective?

Andrew Harrison: Sure. We actually just - it was only really mid-March that we fully transferred all of JFK and New York to Los Angeles and San Francisco on to the ER and the 321, so - as we get into these demand periods. So we will get a lot more visibility to how they perform over the next few months. So that's just really started as we speak.