All Bizniz

They're getting HA for a steal. Lots of wiggle room to make it work, and if it looks like it won't, drastic cuts to profitability (as a last resort) would be an option..

AS is simply not in the business of losing money given their financially conservative DNA, so you can bet they have a Plan A - Z, exit strategy.

GoodJet

With an SLI drastic cuts to profitability isn't exactly music to my ears... the VX integration wasn't exactly pleasant and there was real growth at least for AS during that time.

There will also be a very steep learning curve for our crack managment team when it comes to real international operations. Stepping over dollars to pick up pennies won't be very fun for the crews in Asia with substandard hotels and transportation for example. There are much bigger issues at play with the same root problem. Rest and trasportation issues will just be the tip of the iceberg but one the crews feel the most.

NorthwestAA

Exactly, I think he's the same piece of work one that sued to try and block the American/US Air merger.

Carebear

“Crack management team”….Alaska just came out today to post its first profit in the first quarter in years, even after the MAX grounding. If JetBlue can figure out how to fly to Europe using the 321, I’m sure Alaska can capitalize on wide body flying Hawaiian always does out of Seattle. 10 years from now Alaska can somehow end up merging with JetBlue, have a fleet of 800 airplanes and on par with Delta with a route network to match, and the same people will still say the management team is awful.

Also, people leaving for AA, or any other of the big 4, leave for the same reason we all do. Pilots left Alaska to go to AA to be based on the east coast, which Alaska doesn’t offer. They also left to not be stuck on a 737 for the rest of their career. Last I checked, VX couldn’t keep any of their pilots in 2015/2016 as they were all leaving in droves to United and Delta.

GoodJet

Or we have the crack rock smoking managment team that is already speculating on how great life will be when we complete yet another merger, before we are even approved by the DOJ for the initial merger...

Jetlikespeed

Where is our lord and savior OTZ? Oh wait he’s a retired AS troll that lives in the Gig. Posted a sort of small loss (kinda profit? Boeing made us whole so I think we made money) and they say strong travel demand and good margins rest of year. Seems like downgrades when we are still getting planes and making money is not super likely.

rickair7777

I'm no management fan-boy by any means, but objectively these guys did a decent job during covid, ultimately did the sensible things with CBA and pay, and seem to be making money (despite BCA's best efforts).

I agree it's a big step, but I think it's a reasonable risk. There's also risk to stagnating and getting squeezed out by the big guys... the era of the "hometown regional legacy airline" is officially over.

OTZeagle1

I honestly hope I lose on my little ALK short. My base case has Israel launching a barrage of missiles at Iran in the next 14 days… escalation in the Middle East and oil heading to 100-110 by June. I see this as the catalyst for a medium recession over the next year to 18 mos. I took out a short in UAL early this morning. I’m probably going to get crushed.
I don’t think downgrades are a forgone conclusion, just where we are at right now, toss in what I expect in the economy the rest of the year 🤷‍♂️

MinRest

I will echo this. Management has been making fantastic calculated moves. I appreciate the conservative nature of AS, it makes me feel like my career won't be blemished with furloughs and having to start over. This will be my second merger and I actually think it is a smart move.

NorthwestAA

Interesting view, it's contrary to the majority of analysts. I didn't look at today, but I know yesterday oil futures were down 3%. You could be right though, I've made money in the past doing the opposite of what the advisors were saying. I don't gamble any more though.