Alaska Airlines is buying Hawaiian Airlines, unless the government stops them. They’re paying more than three times the Hawaiian share price at the time the deal was announced, and the real question is… why?
This is a great deal for Hawaiian’s shareholders. Hawaiian Airlines frequent flyers will get more valuable miles out of the deal. There will probably be some reduction in seats flying between the Hawaiian islands, but that’s happening anyway as Southwest Airlines pulls back. Southwest saturated the market.
Alaska is picking up planes, pilots, and experience flying to Asia Pacific destinations which the Seattle-based carrier has never done before. It doesn’t do any long haul flying. There just isn’t that much else for Alaska in the deal.
- A Honolulu hub that has no moat. Mainland – Hawaii flying is highly competitive, with United currently the largest player but also significant flying from American, Delta, and Southwest.
- Money-losing intra-Hawaii flying. Southwest Airlines dumps a tremendous amount of capacity with low loads in these markets. Historically there’s not been enough demand to support heavy competition between the islands (at one point the federal government even granted anti-trust immunity to Hawaiian Airlines and Aloha Airlines operate together between the islands).
- Debt and integration costs. Mergers are distractions, they’re expensive to work through, and they rarely generate promised synergies.
- An incompatible fleet and weak market positions in Asia Pacific. But Alaska does get some knowledge about flying to Asia.
Alaska has tipped its hand in a job posting for a Director of Long Range Network Strategy.
The Director, Long Range Network Strategy sets the long-term strategy for Alaska Air Group’s network. This leadership role is of vital importance to the long-term viability of the company as it establishes the strategic focus of the company’s network. This work includes planning future growth, identifying and developing new routes, and partnering with the fleet team to determine the optimal aircraft mix.
They specifically want someone with experience in “widebody network..planning”. Alaska hasn’t had widebody aircraft before. They’re picking those up in the Hawaiian deal and clearly don’t intend to just use them on the routes Hawaiian has been operating and planning.
When the deal was announced, I wrote “Alaska probably shifts widebody capacity from Honolulu” but noted that Seattle has been killing Delta long haul and American is abandoning the idea of Seattle long haul as a big money loser. They could move to San Francisco and get killed by United which has corporate contracts and way too many long haul planes coming into the fleet.
On day one I said that “the only thing of real value that Alaska seems to be buying here is a Pacific route network.” They do not currently have the fleet or local stations (or even traffic rights, though they could obtain those) to service places where Hawaiian is already well-established. Today, Hawaiian Airlines serves:
- Auckland and Sydney
- Fukuoka, Tokyo Haneda and Narita, and Osaka in Japan
- Seoul
- Papeete, Pago Pago, and Raratonga
The new role’s job duties are:
Establish strategic goals and direction for team of professionals across the network planning, fleet planning, and forecasting disciplines, and effectively communicate the output of the team’s work to an executive audience.
Set long-term, comprehensive multi-year commercial strategy for Alaska Air Group’s network, future growth, route development and fleet, incorporating corporate vision, strategic initiatives, and operational constraints. This work includes not only internal planning and development, but also extensive industry networking and relationship building to push forward initiatives and to uncover new opportunities.
Partner cross-divisionally with leaders across a wide variety of disciplines including commercial, operations & government affairs both as a trusted informational resource and to secure alignment to the long-term network plan.
Leads team to build models that deliver an accurate forecast of operational and financial metrics such as revenue, costs, block hours, departures, RONs, etc. in order to aid operational and commercial groups in long-term planning. Work includes all owning the company’s operating plan, which lays the groundwork for the annual planning cycle.
Develops construction of an infrastructure of models and tools to support development of the long-term planning process. Leads evaluation of big picture analyses such as large-scale network changes and M&A opportunities. Performs in-depth competitive analytics and creates comprehensive network strategies to position the company to win in a highly competitive marketplace.
Develop people through effective performance management and ongoing feedback, focusing on fostering strategic and systems thinking, development of talent, and succession planning across teams and disciplines.
Shape culture of the team through action, presence, and reinforcement of behaviors.
This new person will earn total compensation of $206,810 – $329,790.
Key considerations in Alaska buying Hawaiian are that they need an international presence in Seattle to continue to fend off Delta, they need to grow, and they don’t currently have a great way to do it. This gives them widebody aircraft and pilots to fly them and experience and a head start with access to long haul international destinations.
American Airlines was supposed to provide them with long haul flying but has backed away from that plan. Alaska uses myriad partnerships so that customers can earn and redeem miles for international even as they fly Alaska domestically, but the next obvious step is for Alaska to fly long haul themselves and the Hawaiian deal helps them to build this capability. Now they want someone to drive the details on hwo they’ll deploy it.
If SWA, merged with an airline, who would it be & why?
If Delta had never came into Seattle like it did wonder if this merger even happens or the one with Virgin?
“Alaska is picking up planes, pilots, and experience flying to Asia Pacific destinations which the Seattle-based carrier has never done before. It doesn’t do any long haul flying.”
Alaska Airlines has served Asia. Served Russia from 1991-1998 (3 to 5 cities) from Anchorage.
Alaska Airlines has operated one long haul route ANC-ORD for 23 years and soon another long haul route ANC-JFK. Both flights are longer than some flights USA to Europe.
For a premium, elevated travel experience from SLC to HNL, choose Delta.
Maybe Alaska Airlines will be price competitive to Australia by using Honolulu as a transit point from locations on the mainland. The fuel used per seat mile would be less than that of some nonstop flights.
It’s a low risk way of growing, which is great in this current market. (just look at JetBlue’s growth attempt by trying to buy Spirit…) I wish they could shift some widebody and thus the better first class product to domestic long haul, but I doubt they are interested in these competitions…
Why would anyone fly Alaska?
I did it for 5 years but now they are higher priced than American on partner awards
Living in California they can also never get me to where I need to go in the Midwest or the South
And the once can do make it right culture is nearly gone
Unfortunately they went from my favorite to pretty much the same as all the others
for a premium.Oh well next
Did I mention the 25.00 dollar charge roundtrip to have the privilege to book your overpriced award ticket?
When this was first written about, I noted that there is significant demand between Japan and Alaska in the summer and Australia and the Pacific Northwest in the (northern hemisphere) winter. This presents and interesting opportunity to use widebodies for things like Japan-Alaska direct flights and, as another poster noted, transits of HNL from Australia / NZ. The development Gary notes in this article is consistent with such and approach, and I will be curious to see what they come up with and how they implement it.
What I’d suggest Alaska do is
1. say and do whatever to get the merger past the governments and courts
2. end the long-haul flying
3. sell/return the wide-body airplanes
4. Price war with Southwest
Feel free, Gary, to provide data to back up your statement “Seattle has been killing Delta long haul”
No airline provides international profitability by hub but Delta delivered higher international profits in just the first 3 quarters of 2023 than DL even though DL flew 30% less ASMs.
Average fare data shows that DL’s average fares from SEA were and are higher than AA got from its LAX international hub flying – despite the shorter distance – as well as from ORD.
It isn’t a surprise that DL is still flying SEA and the west coast to Asia while AA has hunkered down to DFW for its Asia-Pacific network with a couple more Tokyo routes.
DL also gets higher average fares than AS from SEA on longhaul domestic (to the eastern US) while the two get comparable average fares in much of the western US with AS’ advantage being to/from Alaska.
And let’s not forget that AS’ profit margin for 2023 was 1/3 of what DL got.
SEA could underperform in terms of margin compared to DL’s system profitability and still be profitable for DL including on international routes. That is likely the case.
AS is undoubtedly trying to break into the international market where the big 3 are making profits – DL and UA across both oceans and AA to Latin America. B6 tried the same thing and it hasn’t worked out great for them – but HA already has widebodies and AS is better run but their margins are still well below where AS was pre-Virgin America merger.
And let’s not forget that Haneda and China access is limited by treaty so there aren’t huge parts of Asia/Pacific that are readily open for AS.
And as soon as they start adding international including to Europe, AA will be forced to dissolve its relationship as will many of AS’ codeshare partners.
Profitable AS longhaul international flying should be considered more aspirational than achievable.
what delivery positions does HA hold in toulouse and hamburg?
@Tim you realize you’re comparing Delta’s Seattle long-haul network against an LAX network AA admitted was hemorrhaging money and ORD where AA admits it makes money only on the Midwest connectivity and summer season flying to Europe.
There may have been an argument that Delta could outperform AA in LAX international and make it work, but as we’ve clearly seen the last month that is not true. Delta pulled out completely from LAX – China and isn’t planning on entering anytime soon, has pulled back from South Pacific flying by reducing frequencies to Auckland and Sydney, and has done the same for Europe by cancelling London and reducing frequencies for Paris. Turns out Delta is discovering what AA learned.
With the information we have we know Delta’s domestic Seattle operation is the lowest-performing major hub for an airline full-stop with Alaska dominating the airport in domestic market share. If Alaska can eat into Delta’s international margins which based on WC LFs and data strongly suggest Seattle is NOT a high performer to Asia or Europe then they will either have to lose a ton of $$ or reduce frequencies. Alaska has the $ and margins to do just that whereas Delta will have to concentrate on building the very unprofitable Austin, keeping share in the competitive LA, and protecting their gains in Boston vs JetBlue who is pulling back and refocusing there while MSP and DTW continue their gradual long-standing relative declines in importance.
I don’t see how this pans out well for AS.
Buy HA for THREE TIMES its actual value? Just to be able to do some longhaul? As noted, the business prospects for longhaul out of HNL or SEA are not great. So is this basically a vanity project?
Seems AS would have been better served to wait for possibly a new presidential administration (less inclined to block mergers) and try to buy itself some access to the east coast.
Jeremy,
you conflate all kinds of concepts
My comparison of SEA international is accurate in noting that DL got higher average fares to Asia from SEA than AA got from LAX and ORD. You might not like that fact but it is accurate.
DL has proven that it will not fly routes and frequencies that don’t make money; that is why they made $2 billion more than UA and $3 billion more than AA.
DL hasn’t pulled out of anything. They have a JV with VS so the route is metal neutral; funny how you and others argue so strongly about AA’s JVs – which is the only way it has any Pacific presence – but can’t accept it works the same way for other airlines.
DL and VS have the 2nd largest presence under their JV between the US and London and VS is part of the AF/KL/DL/VS JV which is the largest across the Atlantic.
DL is flying DTW-PVG daily; they and UA fly precisely 2 flights/day to PVG. AA doesn’t even fly that. UA has PEK which CF showed is one of the lowest performing flights on LF.
You would love to jump to the conclusion that DL has failed on the west coast but DL measures its strategies in decades, not the weekly schedule releases that you and others fixate on.
With four dozen new and reconfigured A350s coming into service as well as AA330-900s in just the next 5 years, DL has enormous amounts of transpacific capacity coming online. You kid yourself if you don’t think a whole lot of that will be deployed on the west coast.
@Eric Purser, I’ll play along. I say Southwest would acquire Sun Country Airlines. #1 reason is their fleet of Boeings and #2 is the MSP market, where WN doesn’t have many gates.
I’ve heard so many rumors about acquiring Spirit or Jet Blue, but I’m just not sure what they’d do with Airbus planes. What do you think?
and Jeremy,
feel free to post your data about DL’s international performance from SEA.
It doesn’t exist.
You are blinded by your own bias and make up all kinds of statements that you can’t back up.
DL’s SEA hub probably generates margins as good as all of AS.
DL is going nowhere. AS is welcome to try to develop a Pacific route system. B6’s track record for doing the same from the east coast is not great at all.
None of which changes that AA has pulled down most of its west coast international flying and smartly realized that SEA is not an option to expand.
Outsiders underestimate how much Seattleites like Alaska, especially MSFT and AMZN employees. Delta is already losing to Alaska there, this move makes a lot of sense.
@Tim LOL you’re saying Delta gets higher fares at SEA to Asia than AA did at LAX and ORD where they lost a ton of money and cancelled those routes. Great – that says nothing about SEA being profitable to Asia, just that it is not as major of a money loser. What a dumb comparison to say nothing at all – there’s a reason why LAX and ORD to most of APAC are gone (and Delta realized LAX wasn’t going to work to China very quickly w/o even trying).
Delta has never proved that they are not willing to run frequencies that don’t make money. They lost money in New York for years until they reached profitability. Austin is a money hole for them right now – they admitted in a backhand way they don’t see very profitable paths to expansion at LAX or Boston right now vs their hubs in their investor presentation – it all depends on their strategy.
Funny to call out AA’s JV for being how they exist on the Pacific (sure), but Delta is a bigger version of the same. They’re 1/3 of United across the Pacific on their own metal. On London, OneWorld has 6 daily flights to Virgin’s 3 and United’s 2 AKA bigger than Skyteam and Star Alliance combined on LAX’s by far most important and busiest international route (50% larger than #2 as of Sept ’23).
Delta can throw whatever capacity they want, as of today they do not have a path to a viable profitable Pacific hub in LAX and the A350 / capacity isn’t why. TBD on SEA, but if Alaska gets in that region (even to lose money), Delta will not have a path – we know for a fact domestic isn’t great there. So we’ll see how SEA – Taipei does but smart money is it won’t last more than a year.
feel free to provide an iota of data to back up your statements including about AUS (where AA threw up a mini-hub to try to block DL and had to pull it down because of AA’s pilots).
You do realize that AS can see data on DL’s revenue performance at SEA? There is no way that DL would risk losing money in SEA against a much smaller competitor – the DOJ would be all over that.
What you and others can’t accept is that DL makes tons of money and can “stoop” to the lower profit margins of its competitors in order to compete.
AA doesn’t make money on its TATL or TPAC networks and could not sustain even the losses against other carriers.
You simply can’t accept that DL knows how to and does run a viable business while AA does not and UA chooses not to when they think they are threatened.
AS runs a good business but they haven’t been at the top of their financial game since they jumped in to buy Virgin America and keep JetBlue from having it.
AS is free to try to jump into the long haul international market from SEA but the chances are high they will not do better and the biggest cost will be to the AA-AS relationship and to AS’ other partners which are happy to have AS as a domestic codeshare partner but not a transoceanic competitor.
Why are they even bothering with the “widebody” experience requirement? In the end, they will get rid of the HA airbuses and figure out how to fly all their longhauls with their new Max10s. Just saying… proudly “All Boeing”.
Dwondermeant You obviously don’t live in Alaska. Alaska is still the go to carrier in a state which has the highest per capita air mile usage in the US. Also AS mileage plan can be very useful when traveling to Asia due to the amount of partners they have flying there. My question to you is why anyone would still want to live in Southern CA?
We always fly Alaska if possible for many reasons. But they are our preferred airline. We love to go to Hawaii. We love to go to the East Coast. We’d love to travel by purchasing Hawaiian airlines, our travel capabilities will be broadened and we are really looking forward to that. Period
I love how my daddy asks for stats to counter his arguments when he never offers them in the first place! He’s so smart!
CMorgan and Sandy,
the point of companies is to make money first. If they are liked, that is great.
AS is well-liked but they have not been able to generate industry-leading profit margins since they bought Virgin America – which was a response to JetBlue’s attempt to acquire Virgin and not DL’s buildup in SEA.
as for profit margins, any legitimate child knows that DL had the highest net profit margin among US large jet airlines in 2023 at about 7.5%; UA was under 5%, AS was half of that and AA and WN were at about 1.5%.
again, all of the non-sense about DL’s losses at SEA are belied by the fact that AS was far less profitable than DL.
DL likely has double digit net margins in ATL, DTW, MSP and SLC but can have sub 5% net margins in BOS, LGA, JFK, LAX and SEA and still generate profits on par w/ its competitors.
While we’re still waiting for Gary’s data to backup his statement about DL’s performance on longhaul routes from SEA, actual facts that I know prove that DL isn’t undercutting anything. DL is smart enough to know that it can’t undercut its competitors without getting hauled into the DOJ.
DL can and does match or exceed its competitors’ performance in THEIR strength markets.
Tim – why do you care so much about Delta?
I mean why are you on every airline blog talking them up? What do you gain by doing that?
A blogger makes one comment about your beloved widget and you take over the comment section demanding information.
Do you not see how you come off?
I worked for Alaska airlines for 12 years in Alaska. I’ll say up top that after that experience they are not my favorite although I do fly them a lot living in SoCal.
When the merger was announced my first thought was… Well, Alaska just doesn’t want Hawaiian to exist anymore and they must have figured that they can get some value from the bones of Hawaiian when it’s all said and done. Obviously Alaska is based in Seattle and not Alaska and as a former Alaska employee in Alaska we were always at the end of the line to realize investment and improvement or even to get basic support. It was all Seattle. So any thought of acquiring Hawaiian to be able to add long haul international flying from Anchorage is to me, laughable. I don’t think they care about Hawaii interisland flying. I’m surprised to hear in that Job announcement that they are looking for someone with widebody experience.
If they are interested in long haul Asia Pacific flying they have a lot to learn about the service and amenities that this kind of flying requires. Up till now they think all they do is throw that “famous” fruit and cheese tray at passengers and that is plenty fancy enough.
I realize that Hawaiian is in trouble financially and that’s why Alaska smells blood.
I half think that they will pretend to study integrating long haul international flying into their operation, pretend to care about Hawaii interisland flying, pretend to care about Hawaiian employees, pretend to care about Honolulu as a hub then after the merger announce that after much consideration they have decided to terminate Hawaii interisland, return most if not all the widebody aircraft that leases will allow, remove IFE from all aircraft….. Etc. Just like with Virgin. Then they take the gates, frequencies, slots etc. Discard the bones of Hawaiian and move on.
It was so nice when Tim wasn’t posting. I’m outta here again….
avgeek,
I write about airlines because I bring the FACTS to the day and destroy the innuendos and mistruths that are common in aviation social media.
I started my replies to this discussion asking Gary for the facts that support his statement that Seattle has been killing Delta longhaul.
As is typical, he didn’t reply because there are no facts to back up his statement.
As it is typical, all he and other blog operators want is to stir up controversy to generate page clicks.
The world does not need people that mock other people because they can’t stand the facts I bring to the table and can’t stand that someone cuts thru the nonsense that they post.
The simple fact is that ALK is in a strategically disadvantaged position because of the strength of DL and, to a somewhat lesser extent, UA; the two combined are making the majority of money in the industry.
AS used to be a Wall Street darling – until they felt like they were boxed in and disadvantaged on the west coast and bought Virgin America – which cost AS billions of dollars and reduced its profits for years.
DL set up a hub in SEA but the Virgin America acquisition did nothing to help AS there.
DL hasn’t gone away, has consistently made higher profit margins than AS and AS is now trying to figure out how to compete with DL, not the other way around, which is precisely what B6 tried to do with flights to Europe from BOS and JFK.
We all love to cheer for the little underdog vs. the 10,000 pound gorilla but Delta has been the best-run airline in the US for more than a decade and is still generating profits that are superior to its competitors.
DL doesn’t act in a predatory manner but its competitors do make decisions that only make DL’s job easier. We have seen it with every airline w/ which DL competes.
AS has to figure itself out but the AS-HA merger will be a huge distraction, probably won’t generate the bulk to help AS compete against other airlines- including UA at SFO, any of the big 3 at LAX, or DL at SEA, and might marginally help AS grow into longhaul international markets from the west coast which DL and UA dominate from LAX, SFO and SEA.
The notion that DL is the one hurting is simply not supported by logic or facts.
When people, including Gary, quit making dumb statements that are driven by a need for page clicks, then I will have no reason to participate in this or any other aviation related gossip site.
Alaska would be better off with JetBlue:
– Combined, would have strong coverage along the East and West coasts
– Able to build frequency on key routes to entice business PAX
– Existing Caribbean & SA coverage as well as Euro footprint
– Eventually pick up some wide bodies for Euro & Asian service from NYC, BOS, LAX, & SEA
– Easier to build Code Share alliances with Euro & Asian carriers due to greater North America coverage
– Eventually extension to the Midwest and Sunbelt
– Large enough to support two airframe makers like the Big Three
– Able to play off each airframe maker for the best deals
– The old benefit of a single airframe supplier has passed (if in doubt, just look at the pain SW is presently experience with the lack of capacity due to Boeing screw up)
– Stronger FF program with more to offer PAX as enticement and growth
– Economy of scale (Synergy) with back office alignment
Biggest issues are consistency, level of cabin service, and coordination.
Exit Row,
I suspect you are right but the big issue w/ AS and B6′ separate attempts to win over Virgin America ultimately came down to control.
HA is in a position to be bought out; AS and B6 both see themselves as survivors or did when Virgin America was in play.
The irony from a fleet perspective is that AS got rid of the A320 fleet from Virgin America and now gets an even more complex fleet with HA – not much different than what it would have gotten with B6.
International expansion is the bottom line. All of the “second tier” airlines know they have to diversify “up” into the longhaul international space. The big 3 have all been able to compete in the domestic/near international space but smaller airlines like AS and B6 and even WN can’t access the longhaul international market.
In a certain percentage of its network, international is a key part of any well-run airline’s revenue, strategy, and profitability. Finding the right planes to do it, the strategies to differentiate themselves from other carriers and the size of international networks might differ but international is where all US airlines have to move to some degree or another.
As previously stated AS did attempt to operate longhaul (to a number of Russian Far East Markets) in the early 90’s, but with the wrong aircraft (727-200’s & MD80’s), requiring stops in Anchorage and Magadan. The addition of wide bodies and the the creation of a hub in HNL, will allow for connecting traffic from their very strong and loyal market of SEA, but also for additional Asia traffic from lesser served markets of PDX and ANC via HNL. Still a challenge though to compete effectively against DL in SEA and to incorporate wide body aircraft into their fleet.
@ Tim Dunn, nice word salad, as usual, but you really didn’t answer Avgeek’s questions.
Tim – that’s not what you’re saying.
What you’re ACTUALLY saying is anyone who doesn’t believe that DAL is the world’s greatest organization with regards to aviation should be invalidated and publicly shamed.
I mean for crying out loud it was an AK post that mentioned DL ONCE.
You also refuse to answer anyone asking why you’re obsessed with DL.
Most of the industry laughs at them. We think they are over-the-top with elitists attitudes that is ingrained into their employees in ATL. I wonder if you have been thru this training or have a loved one who has. Because the only people who defend DAL like this are people who have been thru the ATL brainwashing.
I am obsessed ONLY with the truth.
Gary slipped in a reference to Delta and did it inaccurately because a story about AS and HA wouldn’t result in near as many page clicks.
Gary has consistently pushed the narrative – supported by others – that Delta underperforms in SEA; some even push the narrative that Delta loses money.
Not a soul can back up their statements with facts that tell the whole picture, including Gary’s statement that longhaul hurts Delta.
Based on domestic longhaul average fare data, Delta handedly outperforms Alaska from SEA.
AS doesn’t compete in longhaul international but DL’s SEA hub has delivered average fares that are higher than other airlines from even more distant hubs.
All Gary, Ben, and you have to do is accurately speak about the industry and I will happily go away.
And the simple fact IS that Delta is the best run airline and business in the US airline industry. I’m sorry if that is hard for you to hear or accept but if you don’t like it, maybe airline social media isn’t the place FOR YOU.
You and others can and attack Delta, its employees and its fans but the only people that lose are those that can’t accept Delta’s position of leadership and strength.
Insofar it intersects with AS and what it does with HA, DL will be there in SEA just as they will have to deal with UA in SFO and AA, DL and UA at LAX. And everyone at HNL.
Long time lurker first time poster to the comments section here and other places. Also to preface my comments I am biased as I live in Seattle and have friends and family that work for Alaska Airlines. I see Delta as a competitor and don’t hate them or anything but I do wish to see Alaska “beat” them in competition where applicable.
Tim Dunn: I agree with other posters here your obsessiveness with Delta is a little annoying even if some of your posts are factually accurate. To address what other posters have pointed out and you yourself have said. Gary did slip in a reference to Delta in this article but it was in relation to SEA as one of its hubs. The FACT is compared to Delta’s other hubs and even compared to its entire network SEA is one of its poorest performing, consistently in the bottom of it’s networks (as per DOT data publicly available in their revenue per seat mile). No one is suggesting that Delta loses money out of Seattle, they are just pointing out that Delta isn’t performing as well in Seattle as many of their other hubs. This could be due to many factors including travelers preferences, economics (locally in Seattle and around the world) and competition from Alaska and others. Running an airline is difficult as so much can and does go wrong and the margins are small even in good years. Delta is the most profitable airline out there so they must be doing something right. That doesn’t mean however, that there shouldn’t be competition.
I think this move by Alaska is really about long term competition in Seattle and beyond. With Seattle being Alaska’s main and biggest hub they have felt the heat with Delta moving in and this is Alaska’s quickest way into head to head long haul widebody flying. It makes sense as just adding narrowbody capacity out of its west coast hubs can only do so much in today’s market. I remember not too long ago when Seattle had more US based carriers flying long haul international routes. United comes to mind but they have been pulling out of Seattle more and more recently. American added some but quickly took it away. Delta for the most part has kept the long haul international flying that they acquired from the Northwest merger. That being said they have dropped some routes (PDX to Tokyo). Was that because the route was not profitable? Was there not enough demand? I can’t say for sure but usually dropping a route means something about it wasn’t working. Even an airline like Delta makes moves that don’t work, they are not perfect in all that they do. Remember when they filed for chapter 11 bankruptcy in 2005?
Delta has no US based carrier competition on the long haul international routes out of Seattle. Alaska knows this and saw an opportunity with Hawaiian being available. Seattleites are fiercely loyal and since Alaska’s main hub is here they would welcome the additional flying. Alaska has the loyal passenger base to make a run at it in my opinion. Can they have success where others have faltered if the merger is approved? Time will tell, but I think Alaska has the best chance, even with the competition from what some would argue is “The worlds bestest airline to ever fly an airplane.”
Even delta doesn’t say delta is profitable in Seattle and they do say that when new hubs become that. But sure. Every set of data suggests delta is unprofitable in sea but keep on dreaming, Tim. If you think Asia is boosting delta’s subpar hub margins (the worst domestically of any US hub), you’re dreaming more than I realized…
@avgeek
Yes. He worked at delta hq and was fired by delta. He drank the delta koolaid for some time and even delta thought he drank too much.
“Tim” has a long history posting nonsense on aviation sites under many fake names, Tim Dunn among them. Many delta people think he’s an idiot too and don’t like being associated with him and are happy to share that
Tim,
If you have data that refutes (or even rebuts) Gary’s assertion re: Delta in Seattle, then why don’t you share it? You talk a big story about data, but I’ve never seen you produce any.
BYinlove is the rational non-airline participant in airline discussions that is with whom I am interested in interacting with.
Unfortunately, there are scores of airline or former airline employees like Ghost and MAX that can’t stand to hear any actual facts and so make up their own – truth be damned. They can’t stand to hear that someone other than “their” employer does better and so they resort to attacks on other users that don’t “toe the line” on their propaganda.
Ghost,
Gary doesn’t even bring data to the discussion and the comments section is not conducive to posting data tables; people argue even on Cranky Flier when he does post data which clearly shows how well airlines perform – so the data or lack of it isn’t the issue.
Funny you don’t ask MAX for the data to back up his claim of DL being unprofitable in SEA.
I don’t even claim to have data on the profitability of DL’s hubs because ONLY DL internally has it. I do know that average fare data is public and DL DOES NOT underperform AS in revenue production from SEA on domestic flights. Public data shows that.
Common sense would tell anyone that Delta doesn’t lose money in its BOS or SEA hubs; they would get hauled into the DOJ in time flat for predatory conduct. The notion that some like MAX cling to that Delta loses money is not only illogical but simply wedded in an inability to accept facts.
BY,
I agree w/ you including my desire to see AS thrive.
But we JUST got through seeing them get over their Virgin America merger which involved dumping all kinds of assets that they didn’t think worked w/ AS’ model. Now, AS is interested in the longhaul international market like B6 and we are supposed to think that they will succeed just because AS sees a need? Color me skeptical.
And I am not hypersensitive to anything said about DL but used Gary’s false statement as an entry point to a conversation about what AS is doing – and Gary’s article in general.
I’m not sure why my comments should be viewed as suspect when others including MAX and Ghost bring their incessant bias into the conversation.
Nobody gets worked up when I comment on other articles – which I have done today.
When others get worked up about what I say, I respond. The fact that others – not me – are hyperfocused on what I say about DL and not other topics says far more about them than me.
Funny tim
You don’t see me going nuts defending UA or AA on articles where bloggers go off on them because they mess up just like delta.
It’s just you about delta. Wake up and grow up.
But again, feel free to tell us where delta says Seattle is profitable. They haven’t despite that they say it about their other new hubs when they are and all other evidence says seattle for delta is a money pit
You can attack me all you want. None of it changes that you literally said nothing to disprove every bit of evidence that Seattle is unprofitable for delta.
And the delta sea data is from Enrilia and other bloggers showing how abysmal delta is in Seattle
Where’s your data?
Again, your backup for delta is that Asia is the saving grace for the awful domestic performance of delta in Seattle vs every other US hub? Please… cut your delta crap for once
Right now flying into Asia is tough. QF is cancelling Shanghai – perhaps as the Chinese airlines recover and dominate the exChina market to anywhere.
From Australia the addition of HA to AS will be a plus (along with FJ becoming a full OneWorld member). The more choices to/from Australia and with shorter flight segments/times will be welcome. Being able to offer peak time schedules changing between summer/winter will hopefully be an advantage to AS retaining those long haul planes and crews and finding profits in doing so
Max,
it is because of people like you that I have a reason to participate in aviation chat blogs. Gary can thank you for your ignorance and inability to comprehend facts and misalign data so he gets the page views.
Nowhere has Delta or any other analyst including enilria ever said that Delta is unprofitable in SEA or any other hub. That data does not exist publicly.
Enilria did say that DL’s SEA hub has the lowest average DOMESTIC average yields. But he himself said he did not include international revenue because HE DOES NOT HAVE ACCESS TO IT.
Delta operates more than 10% of its capacity from SEA on international aircraft. It matters A WHOLE LOT that Delta prorates a small amount of revenue on an international itinerary to the domestic flight and the vast majority to the international flight. Of course, if you don’t have the international revenue and only see the small amount of domestic revenue, you would think that Delta doesn’t come up w/ much domestic revenue.
What he DID NOT SAY is that Delta is unprofitable at SEA. You said that and said there is proof. Where is that proof?
the reason why you are mocked is because you make stupid, inflammatory statements that you can’t back up because they are patently false – and everyone knows it.
I know you are not the sharpest pencil in the desk drawer but DL’s net profit margin for 2023 was 7.5% – the highest in the industry.
DL can legitimately say that its core 4 hubs provide the majority of its profits because they are 1. larger – ATL alone is 10X larger than SEA in terms of flights and 2. DL probably gets 15+% margins out of ATL.
AS on a systemwide basis only got a 2.5% margin systemwide. Maybe AS gets better margins in SEA than elsewhere but someone above accurately noted that AS’ margins started falling when they dumped a bunch of capacity into SEA to “fend off” DL. DL still has half of the share but AS probably makes no more total profits than they did before on much lower capacity and much lower margins. AS and ONLY AS diluted their margins in order to hold onto market share and keep DL “at bay.”
DL was never interested in becoming the #1 airline at SEA. It wanted and HAS built an international gateway – half of which is to Asia.
If AS wants to dilute its own revenue and hurt its own profits to try to keep DL out, they are free to do that but it doesn’t mean that DL is not profitable.
And, more importantly, there is nothing that stops DL from making the SAME MARGINS at SEA as AS while making much higher margins in other hubs such as ATL, DTW, MSP and BOS and LGA and JFK etc.
I’m not sure what your point even is, Max, But you have proven you are irrational and not very bright.
DL is going nowhere at SEA but up. They are adding TPE and DFW from SEA this year. They are still growing. They are still investing in new facilities.
what you are really bent out of shape about is that Delta can manage to build a 2 west coast and 5 total gateway network to Asia – something AA can’t do. You can’t stand that Delta makes more money not just across its system but across the Pacific flying less ASMs than its two largest competitors.
DL simply just runs a better business. And you can’t stand to read or hear that.
AS is free to grow its international routes from SEA if it wants just as DL was and is free to keep growing as much as it wants.
DL does and will make far more money not just compared to AS but every other US airline.
If AS can compete in that environment, let them grow.
I’m just excited to be able to use some of my 700K saved miles on AS for trips to Australia from Seattle or Hawaii. I had no desire to fly on American even though I could use my status and mileage as Alaska has spoiled me the past 5 years and I flat out refuse to fly anyone else anywhere if AS has way there.