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What's Going To Happen To AQ?  
User currently offlineHNL-Jack From United States of America, joined Mar 2001, 819 posts, RR: 0
Posted (6 years 6 months 2 weeks 5 days 5 hours ago) and read 2552 times:

AQ continues to loose money, can ill afford new replacements for their 732's and their ability to continue to find low cycle 732's can't go on forever. Their service on the mainland routes is great, but the B-737-700 too small to make a major contribution to profit. And, other than perhaps HA, there are no merger possibilities. And, of course the HA route has been tried a couple of times before and I doubt HA is interested. I can't help but wonder how long their investment group is going to continue to pump money in with little or no hope of getting it back. Perhaps there is something I don't see, but I can't see where there is a future for the airline.


Grew up in the business and continued the family tradition.
17 replies: All unread, jump to last
 
User currently offlineRockinflyer From United States of America, joined Nov 2007, 232 posts, RR: 0
Reply 1, posted (6 years 6 months 2 weeks 5 days 4 hours ago) and read 2524 times:

If thats the case, all I could see is one of the majors buying it and operating intra-hawaiian service. It would be sad to see AQ disappear, but look what happened to TWA, Pan Am etc...and they were much larger. Maybe some investor (a white knight as they say in the business world) might decide to throw some cash into it, but again, thats a long shot too. Perhaps the best thing is to strengthen their mainland flights as much as possible and add a couple of more cities with the 700s. They might get away with leasing 3 or 4 more planes to get them by. (by the way, are the fares within Hawaii still as high as ever?)


AA,AC,AF,BA,BN,BW,CO,DL,FL,F9,HA,KL,NA,PA,RW,TW,UA,WA,WN
User currently offlineRockinflyer From United States of America, joined Nov 2007, 232 posts, RR: 0
Reply 2, posted (6 years 6 months 2 weeks 5 days 4 hours ago) and read 2489 times:

Here's another thought I'm lifting from a thread about why AS isn't in the merging game as of yet. They could be well suited to buy AQ if they wanted too. AS would be the surviving carrier of course, but fleets are complimentary and would open up a world of options for Hawaii as well as the mainland.


AA,AC,AF,BA,BN,BW,CO,DL,FL,F9,HA,KL,NA,PA,RW,TW,UA,WA,WN
User currently offlineHNL-Jack From United States of America, joined Mar 2001, 819 posts, RR: 0
Reply 3, posted (6 years 6 months 2 weeks 5 days 4 hours ago) and read 2479 times:



Quoting Rockinflyer (Reply 1):
(by the way, are the fares within Hawaii still as high as ever?)

Interisland service is bleeding money for both AQ and HA as Go! continues to offer fares as low as $29 ow. Just prior to Go! the lowest fares available were in the $70 range.

Quoting Rockinflyer (Reply 2):
Here's another thought I'm lifting from a thread about why AS isn't in the merging game as of yet. They could be well suited to buy AQ if they wanted too. AS would be the surviving carrier of course, but fleets are complimentary and would open up a world of options for Hawaii as well as the mainland.

HA might make some sense as HA is building around a Honolulu hub with service around the Pacific Rim and expansion into the mainland with widebody equipment. A strategy not too different from AS in Seattle from the standpoint of out and back traffic.



Grew up in the business and continued the family tradition.
User currently offlineIkramerica From United States of America, joined May 2005, 21500 posts, RR: 60
Reply 4, posted (6 years 6 months 2 weeks 5 days 4 hours ago) and read 2464 times:



Quoting Rockinflyer (Reply 2):
Here's another thought I'm lifting from a thread about why AS isn't in the merging game as of yet. They could be well suited to buy AQ if they wanted too.

I've said for a while that CO buying AS, then buying AQ, and operating Continental Alaska (snowflakes on the tail over the globe) and Continental Hawaii (bird of paradise over the globe) service would be interesting, except it doesn't help them expand internationally. It does fill in the major holes in CO's network, though.

They don't have west coast presence so they'd gain the pacific northwest and great plains states they don't serve, and Los Angeles and slots into BUR for IAH flights, they have been trying to crack the LAX-Mexico routes, etc. And with CO flights to Hawaii and Air Mike beyond Hawaii, flying interisland makes some sense connecting micronesians to their destinations without having to interline with HA.



Of all the things to worry about... the Wookie has no pants.
User currently offlinePa747sp From Australia, joined Jan 2008, 226 posts, RR: 0
Reply 5, posted (6 years 6 months 2 weeks 5 days 3 hours ago) and read 2413 times:



Quoting Ikramerica (Reply 4):
I've said for a while that CO buying AS, then buying AQ, and operating Continental Alaska (snowflakes on the tail over the globe) and Continental Hawaii (bird of paradise over the globe) service would be interesting, except it doesn't help them expand internationally. It does fill in the major holes in CO's network, though.

Maybe they are still wary, following the collapse of Mid-Pacific (which I believe they held equity in), and of the Continental Lite on the West Coast.



Nothing seems as good since the VC10.
User currently offlineHa763 From United States of America, joined Jan 2003, 3654 posts, RR: 5
Reply 6, posted (6 years 6 months 2 weeks 5 days 3 hours ago) and read 2406 times:
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AQ still has their trial against Mesa coming up very soon. Until that trial is concluded, nothing will happen. Even after that, nothing will happen because Mesa will appeal the ruling. Yes, Mesa is going to lose this lawsuit as well, given the evidence that has come out. The penalties awarded to AQ will most likely be more than the $80 million awarded to HA and could possibily be over $100 million.

User currently offlineAloha73G From United States of America, joined Jul 2003, 2362 posts, RR: 4
Reply 7, posted (6 years 6 months 2 weeks 5 days 2 hours ago) and read 2394 times:



Quoting HNL-Jack" class=quote target=_blank>HNL-Jack (Thread starter):
AQ continues to loose money

True, go!'s presence interisland is killing them there. It affects them more than HA because interisland is about 50% of AQ's revenue but only 20% of HA's revenue.

Quoting HNL-Jack" class=quote target=_blank>HNL-Jack (Thread starter):
can ill afford new replacements for their 732's and their ability to continue to find low cycle 732's can't go on forever.

I can tell you for a fact that the reason they still operate 732s is because they are the most economical aircraft for the mission. They know they will need to find a replacement in 5-10 years (10 is pushing it) but feel like its not worth it to get a "worse" aircraft just because its new. They are waiting until a decision must be made, then they will choose the best aircraft available at that time.

Quoting HNL-Jack" class=quote target=_blank>HNL-Jack (Thread starter):
Their service on the mainland routes is great, but the B-737-700 too small to make a major contribution to profit.

Agreed on their service. Though not what it used to be, their employees are still far and away better than any major's and on-par with HA.

Quoting HNL-Jack" class=quote target=_blank>HNL-Jack (Thread starter):
And, other than perhaps HA, there are no merger possibilities. And, of course the HA route has been tried a couple of times before and I doubt HA is interested.

I don't think AQ has much HA couldn't do on their own. The only things AQ brings to HA would be a vastly larger interisland presence (which might help with profitability if go! won't go) and a smaller aircraft which is ideal for nonstops to neighbor islands (LIH, KOA, ITO) as well off peak flights from HNL/OGG (red-eyes, AM departures). In my mind the 2001-2002 merger with Greg Brenneman at the helm was the best chance of it happening and it didn't.

Another interesting merger idea being discussed was for AQ to buy TZ's Hawai'i routes (OAK-HNL/OGG/LIH/KOA/ITO; LA-HNL/OGG; LAS-HNL/OGG; PHX-HNL/OGG). If AQ could get some of TZ's 757s and run LAS nonstop from HNL it would fill in what they lack most in their route system (non-stop LAS-HNL). Also, if they got the WN codeshare it would help them alot with feed on the mainland side. The two route networks work really well together and I could see a fleet of 73Gs, 738s and 757s (-300s would be GREAT). Not sure if this is even a real possibility, but if it is, I think it could work.

AQ's employee newsletter a few weeks back explicitly stated that AQ was looking at mergers, buyouts, investors, etc.

Quoting HNL-Jack" class=quote target=_blank>HNL-Jack (Thread starter):
I can't help but wonder how long their investment group is going to continue to pump money in with little or no hope of getting it back.

AQ is owned by billionaire Ron Burkle. UA and AQ's old local owners (Ching & Ing Families) have minority stakes. Remember that this year AQ will most likely be winning around $100 million from go! which would essentially pay for the losses during the go! era.

Quoting HNL-Jack" class=quote target=_blank>HNL-Jack (Thread starter):
Perhaps there is something I don't see, but I can't see where there is a future for the airline.

There is a future for AQ. While things are tough right now, they are doing well on their mainland flights and I HOPE (and think) that they will carefully and cautiously expand their presence on mainland routes with more 737s and even some larger 738s or 739ERs.

Quoting Ikramerica (Reply 4):
slots into BUR

AQ hasn't served BUR for years. They decided to consolidate their LA service at SNA, which is their highest yielding station.


-Aloha!



Aloha Airlines - The Spirit Moves Us. Gone but NEVER Forgotten. Aloha, A Hui Hou!
User currently offlineOzarkD9S From United States of America, joined Oct 2001, 5048 posts, RR: 21
Reply 8, posted (6 years 6 months 2 weeks 4 days 22 hours ago) and read 2341 times:



Quoting Pa747sp (Reply 5):


Maybe they are still wary, following the collapse of Mid-Pacific (which I believe they held equity in), and of the Continental Lite on the West Coast.

If they are wary it's not because of those experiences. In airline years (much like dog years) that is ancient history. The game has changed 180* at least a dozen times since then.



Next Up: STL-LGA-RIC-ATL-STL
User currently offlineRockinflyer From United States of America, joined Nov 2007, 232 posts, RR: 0
Reply 9, posted (6 years 6 months 2 weeks 4 days 14 hours ago) and read 2208 times:



Quoting Aloha73G (Reply 7):

Another interesting merger idea being discussed was for AQ to buy TZ's Hawai'i routes (OAK-HNL/OGG/LIH/KOA/ITO; LA-HNL/OGG; LAS-HNL/OGG; PHX-HNL/OGG). If AQ could get some of TZ's 757s and run LAS nonstop from HNL it would fill in what they lack most in their route system (non-stop LAS-HNL). Also, if they got the WN codeshare it would help them alot with feed on the mainland side. The two route networks work really well together and I could see a fleet of 73Gs, 738s and 757s (-300s would be GREAT). Not sure if this is even a real possibility, but if it is, I think it could work.

Very interesting idea! That really could work!!



AA,AC,AF,BA,BN,BW,CO,DL,FL,F9,HA,KL,NA,PA,RW,TW,UA,WA,WN
User currently offlineFlyPBA From United States of America, joined Feb 2007, 431 posts, RR: 0
Reply 10, posted (6 years 6 months 2 weeks 4 days 14 hours ago) and read 2194 times:

I think that AQ would become a part of United before Continental as they are an investor in AQ

User currently offlinePSA727 From United States of America, joined Feb 2006, 974 posts, RR: 0
Reply 11, posted (6 years 6 months 2 weeks 4 days 13 hours ago) and read 2148 times:



Quoting FlyPBA (Reply 10):
I think that AQ would become a part of United before Continental as they are an investor in AQ

I could see United acquiring AQ and then dropping the
mainland flights, and using the inter-island flights for
local and connecting traffic.

I'm sure UA would like to see one less West Coast to
Hawaii competitor to drive up load factors.



fly high, pay low...Germanwings!
User currently offlineMtnWest1979 From United States of America, joined Nov 2005, 2451 posts, RR: 1
Reply 12, posted (6 years 6 months 2 weeks 4 days 13 hours ago) and read 2136 times:
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Quoting Pa747sp (Reply 5):
Continental Lite on the West Coast.

CO Lite was only back east. CO West was west coast op.



"If it ain't broke, don't fix it!"
User currently offlineHNL-Jack From United States of America, joined Mar 2001, 819 posts, RR: 0
Reply 13, posted (6 years 6 months 2 weeks 4 days 9 hours ago) and read 2052 times:



Quoting Ha763 (Reply 6):
Another interesting merger idea being discussed was for AQ to buy TZ's Hawai'i routes (OAK-HNL/OGG/LIH/KOA/ITO; LA-HNL/OGG; LAS-HNL/OGG; PHX-HNL/OGG).

That's an interesting suggestion and would give AQ the needed efficency for mainland flights with the 752 or 753's. Add Southwest to the senario and it really gets interesting.

Quoting PSA727 (Reply 11):
could see United acquiring AQ and then dropping the
mainland flights, and using the inter-island flights for
local and connecting traffic.

UA will never buy AQ and their investment currently is very small, if indeed it involved any real cash at all. The interisland routes simply don't supply enough connecting traffic today to support a purchase and even if Go! were to "go" it's going to difficult to get interisland fares up to the level necessary without a corresponding loss in traffic. At least in my opinion, if AQ is to survive it needs to lower its dependency on interisland, much like HA. The merger suggested above might be a solution that should be explored.



Grew up in the business and continued the family tradition.
User currently offlineAloha73G From United States of America, joined Jul 2003, 2362 posts, RR: 4
Reply 14, posted (6 years 6 months 2 weeks 4 days 8 hours ago) and read 2040 times:



Quoting HNL-Jack (Reply 13):
even if Go! were to "go" it's going to difficult to get interisland fares up to the level necessary without a corresponding loss in traffic.

To me, the MOST important thing to keep in mind about go! is that the drastic fare cuts of over 50% have resulted in about a 5% increase in total interisland traffic. What this means is that the previous fares charged by AQ and HA (which were marginally profitable......Finally......for both) were economically "correct" since pretty much everyone who wanted to or needed to fly did. If the fares return to the old level ($60-80...probably $70-90 now due to fuel) interisland traffic will not drop significantly.

-Aloha!



Aloha Airlines - The Spirit Moves Us. Gone but NEVER Forgotten. Aloha, A Hui Hou!
User currently offlineAWACSooner From United States of America, joined Jan 2008, 1898 posts, RR: 1
Reply 15, posted (6 years 6 months 2 weeks 4 days 8 hours ago) and read 2008 times:

Well, call me crazy but:

If the rumors of TZ abandoning all their scheduled ops and operating pure military/charter, then WN might opt to codeshare with AQ from the west coast to Hawaii.


User currently offlineHNL-Jack From United States of America, joined Mar 2001, 819 posts, RR: 0
Reply 16, posted (6 years 6 months 2 weeks 4 days 6 hours ago) and read 1939 times:



Quoting AWACSooner (Reply 15):
If the fares return to the old level ($60-80...probably $70-90 now due to fuel) interisland traffic will not drop significantly

Just before go! had entered the scene, interisland fares were averaging between $70 & $80 and traffic was just really beginning to slide. At that time I had to buy a one-way ticket from Maui to Honolulu (OW) and it was $129. The 5% you quote is probably correct, but only if it were an average of the period of time that fares began to rise during the HA bankruptcy. I'll will go back to my records to see if I can get more accurate information, but I believe at the time (month to month) go! came into the market we were looking at close to a 20% decline vrs the year prior.



Grew up in the business and continued the family tradition.
User currently offlineAloha73G From United States of America, joined Jul 2003, 2362 posts, RR: 4
Reply 17, posted (6 years 6 months 2 weeks 4 days 3 hours ago) and read 1881 times:



Quoting HNL-Jack" class=quote target=_blank>HNL-Jack (Reply 16):
traffic was just really beginning to slide.

Traffic began to slide in the late 1990s, one of the reasons Aloha started mainland routes in 2000. During the economic slowdown before 9/11 flights began to get cut and after 9/11 drastic cuts were made. A few key changes in the interisland market led to this, and had nothing to do with fares. They include:

1. Direct flights to neighbor islands eliminate the need for interisland connections in HNL
2. Decline in Japanese tourists who are more likely to take day trips to neighbor islands
3. Improved shopping (Wal-Mart, Costco, Home Depot) and medical care on the neighbor islands eliminated need for locals to travel to HNL for those reasons.

After 9/11 the elimination of the pre-paid coupon, make multiple reservations on more than one flight on more than one airline and only take one flight (if any) with no penalty is what caused people to feel cheated. Alot of flexibility was lost and prices went up a little.

Just for comparisons sake, here is Aloha's interisland schedule for 7-2-2000 compared to 5-1-2001 compared to today:

**Flights listed by nonstop flights per week in each market
ROUTE - - 7-2-00 - - 5-1-01 - - Today

HNL-OGG: 223 - - 184 - - 118
OGG-HNL: 220 - - 201 - - 118

HNL-LIH: 168 - - 153 - - 97
LIH-HNL: 168 - - 153 - - 97

HNL-KOA: 128 - - 121 - - 97
KOA-HNL: 128 - - 114 - - 97

HNL-ITO: 91 - - 84 - - 62
ITO-HNL: 91 - - 77 - - 62

OGG-LIH: 14 - - 14 - - 7
LIH-OGG: 14 - - 14 - - 7

OGG-ITO: 14 - - 7 - - 0
ITO-OGG: 14 - - 14 - - 0

OGG-KOA: 24 - - 14 - - 7
KOA-OGG: 21 - - 24 - - 7

KOA-ITO: 7 - - 7 - - 0
ITO-KOA: 14 - - 7 - - 0

TOTAL: 1339 - - 1188 - - 776

As you can see, flight cuts had started before 9/11 and after 9/11 flights were cut to about what we have today (probably slightly less) but have never even come close to pre-9/11 levels. When go! entered the market, it was not beginning to slide. In fact, it had just "leveled off" with both airlines making a small profit after their respective bankruptcies.

The "slide" took place over 5 years before go!; Aloha saw it coming and started mainland flights. Hawaiian saw it coming and downsized their interisland fleet when they acquired 717s (Initially 13, now 11). I remember when Aloha had 18 732s flying interisland flights....now they have only 10!

-Aloha!



Aloha Airlines - The Spirit Moves Us. Gone but NEVER Forgotten. Aloha, A Hui Hou!
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