Originally Posted by LonesomeSky

I think we can look at Alaska's strengths and weaknesses and guess at strategies for success, but making specific predictions is a fools game.

Some ways Alaska can come out a winner:

1) Turn HNL into an efficient hub and run larger (full) planes inter‐island. A full Alaska 737‐900 has a substantially lower cost per seat mile than a half full Southwest 737‐800. Also, leisure travelers are less sensitive to hub transfers than they are sensitive to price. An efficient HNL hub will mean lower ticket prices for vacationing families. We can continue to charge premium prices for some direct flights (stuff like PDX-OGG) but we can also fill A330s with Costco package families to HNL and then use them to fill larger planes inter-island. Southwest cant compete with that. We can be premium and discount at the same time. We can use every one of those precious Hawaii gates (I'm talking all the islands) to its maximum potential.

2) Run Delta out of Seattle (or put up the strongest possible fight)... sounds crazy, right? Next time you're taxing through Seattle look at alaska's operation vs Delta's. Alaska is much larger. We have much more feed than delta. All we need are some wide-bodies and a willingness to bleed on international routes for a few years. Seattle is already Delta's least profitable hub because they dont have enough feed for their widebodies because they don't have enough gates and/or their feed is RJs instead of narrow bodies. We can turn the screws on them if we accept some short-term pain. Seattle is a growing city with an airport that can't keep up. The law of supply and demand turns every Seattle gate into a money printing press. Big planes mean more passengers pumping through limited gates. In Seattle, you must up-gauge or die trying. Imagine SEA in 2030, Max10s and 787s, it'll be standing room only in the terminal. If it isn't alaska who builds these efficiencies, someone else (delta) will.

3) Leverage premium gate space. A combined Alaska Hawaiian will have the highest ratio of premium gates of any airline. By "premium gate" I mean gates that are impossible to get, places like Orange County, Kona, Burbank, DCA, San Diego, etc. These airports are all honey pots and Alaska Hawaiian fly to more honey pots by percentage than anyone else. It's a lot easier to make a buck on San Diego to Orlando than it is to be profitable on Phoenix to Orlando. One has restricted competition and the other has unlimited room for spirit and frontier and breeze. These places all have a similar dynamic as Seattle, growing demand and airports that can't keep up. We will run larger planes to these airports and see increasing profits.

Some ways Alaska can lose:

1) A failure of courage. Building an international airline will be expensive and we will make mistakes. Any new international route will bleed money, huge money, for a year or two. Historically, Alaska's board hasn't shown the intestinal fortitude to take on these sorts of adventures. I'm cautiously optimistic that Ben will lead the charge and he'll find that the entire employee group happily follows him into the breach, BOD be damned. But, that would mean the entire financial philosophy of leadership would need to change and I have my doubts. For now, I'll keep low in trench and wait to hear from Ben's bugle, or not.

2) A failure of branding. Good branding is a financial tailwind. Alaska continually ignores branding. Our product doesn't match our competencies as a highly profitable, tech-forward, caring, West Coast airline. We look like something else: a tired regional bank or discount hotel. We're a natural blonde who dyes her hair mouse brown. The curtains don't match the carpet in the most stupid possible way. Alaska needs a branding makeover, like one of those nerd to princess movies.

Originally Posted by LonesomeSky

I think we can look at Alaska's strengths and weaknesses and guess at strategies for success, but making specific predictions is a fools game.

Some ways Alaska can come out a winner:

1) Turn HNL into an efficient hub and run larger (full) planes inter‐island. A full Alaska 737‐900 has a substantially lower cost per seat mile than a half full Southwest 737‐800. Also, leisure travelers are less sensitive to hub transfers than they are sensitive to price. An efficient HNL hub will mean lower ticket prices for vacationing families. We can continue to charge premium prices for some direct flights (stuff like PDX-OGG) but we can also fill A330s with Costco package families to HNL and then use them to fill larger planes inter-island. Southwest cant compete with that. We can be premium and discount at the same time. We can use every one of those precious Hawaii gates (I'm talking all the islands) to its maximum potential.

2) Run Delta out of Seattle (or put up the strongest possible fight)... sounds crazy, right? Next time you're taxing through Seattle look at alaska's operation vs Delta's. Alaska is much larger. We have much more feed than delta. All we need are some wide-bodies and a willingness to bleed on international routes for a few years. Seattle is already Delta's least profitable hub because they dont have enough feed for their widebodies because they don't have enough gates and/or their feed is RJs instead of narrow bodies. We can turn the screws on them if we accept some short-term pain. Seattle is a growing city with an airport that can't keep up. The law of supply and demand turns every Seattle gate into a money printing press. Big planes mean more passengers pumping through limited gates. In Seattle, you must up-gauge or die trying. Imagine SEA in 2030, Max10s and 787s, it'll be standing room only in the terminal. If it isn't alaska who builds these efficiencies, someone else (delta) will.

3) Leverage premium gate space. A combined Alaska Hawaiian will have the highest ratio of premium gates of any airline. By "premium gate" I mean gates that are impossible to get, places like Orange County, Kona, Burbank, DCA, San Diego, etc. These airports are all honey pots and Alaska Hawaiian fly to more honey pots by percentage than anyone else. It's a lot easier to make a buck on San Diego to Orlando than it is to be profitable on Phoenix to Orlando. One has restricted competition and the other has unlimited room for spirit and frontier and breeze. These places all have a similar dynamic as Seattle, growing demand and airports that can't keep up. We will run larger planes to these airports and see increasing profits.

Some ways Alaska can lose:

1) A failure of courage. Building an international airline will be expensive and we will make mistakes. Any new international route will bleed money, huge money, for a year or two. Historically, Alaska's board hasn't shown the intestinal fortitude to take on these sorts of adventures. I'm cautiously optimistic that Ben will lead the charge and he'll find that the entire employee group happily follows him into the breach, BOD be damned. But, that would mean the entire financial philosophy of leadership would need to change and I have my doubts. For now, I'll keep low in trench and wait to hear from Ben's bugle, or not.

2) A failure of branding. Good branding is a financial tailwind. Alaska continually ignores branding. Our product doesn't match our competencies as a highly profitable, tech-forward, caring, West Coast airline. We look like something else: a tired regional bank or discount hotel. We're a natural blonde who dyes her hair mouse brown. The curtains don't match the carpet in the most stupid possible way. Alaska needs a branding makeover, like one of those nerd to princess movies.

Originally Posted by PNWFlyer

actually Delta’s Settle operation is not just their worst performing, it is the worst performing of all airlines in the US.

Originally Posted by Cruz5350

Boy you really love to rail on Delta… still somehow with the worst performing operation they’re the most profitable airline in the world.

Originally Posted by ExperimentalAB

They’re obviously large enough to absorb the loss. And apparently happy to as well.

Originally Posted by rickair7777

Well said.

Branding has been a conundrum for a long time. On one hand the PNW hometown crowd (and hometown employees) love the tradition and roots, and the quirky icon. On the other hand... the rest of the global market.

They're keeping the HAL brand, so that's a good start. I don't pretend to know as much as the management team about business stuff, but if they hadn't explicitly stated they were keeping the HAL brand I would have been off to UAL so fast it would make your head spin.

The dual brand is probably sufficient for the time being, while they get their arms around the new enterprise. But at some point they probably need to look to the future. Maybe something like "Pacific Airlines"? Sub-brand "Pacific Hawaiian" for the island stuff? They could even paint "Pacific Alaskan" on some planes for southeast, etc. Lots of options and flexibility when it comes to branding and marketing, if you choose to go there.

Originally Posted by Carebear

You have two post functions:
Talk [bad word] about OTZ or talk [bad word] about Alaska management. You go down such ridiculous tangents every other post.


I told you lovers to bet via BTC before, but like a new FO at indoc, you were too shy to put up anything to bet. When are your expiries and strikes for these “100k puts?” Either IV crush will get you, or you’re a sadist who loves getting your nuts crushed by the 4-5 guys who get you off here.
You can’t even make up bs of “oh I got out of those” because your puts lost value within the past month, especially with the jump in airlines the past few days, so you’re deep in the red now.

Originally Posted by flysnoopy76

You honestly believe them when they say they are keeping the Hawaiian brand? I’d be shocked if it’s not history within a couple years should this all be approved.

Originally Posted by flysnoopy76

You honestly believe them when they say they are keeping the Hawaiian brand? I’d be shocked if it’s not history within a couple years should this all be approved.

Originally Posted by OTZeagle1

If it came down to one brand over the other, I honestly think they will keep the Hawaiian brand over the Alaska brand.