77H
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Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 7:05 am

Aloha and United had a very close relationship as codeshare partners for a number of years. I remember Aloha's route map even featuring United in their inflight magazine and on the website. Additionally, United has a long history of serving the Hawaiian Islands spanning back to statehood with heavy brand recognition.

So why did UA not purchase AQ during its demise? Surely UA could have trimmed some of the loss-leading West Coast flights while going head to head with a much weaker HA on inter island routes. AQ paved the way in using the 737 to secondary markets to Hawaii which opened the door to Alaska's entrance in the market which has been wildly successful.

Mahalo,
77H
 
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intotheair
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 7:26 am

...because UA didn't have any money of its own either?
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Passedv1
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 1:25 pm

Word on the street was that UA was within weeks if not days from announcing a purchase...and then oil spiked.
 
codc10
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 1:45 pm

77H wrote:
UA could have trimmed some of the loss-leading West Coast flights . . . Alaska's entrance in the market which has been wildly successful.


Not sure if I follow... I don't think the West Coast flights are loss-leaders at all. Competitive, yes, but I am not so sure they lose money there. And how would that explain Alaska's "wild" success?
 
durangomac
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 4:33 pm

The issue was the interisland routes were loosing tons of money because of YV undercutting both AQ and HA.

I tend to believe that it really could have been either AQ or HA that could have gone under at that point. HA was really not that much better off but got a cash wind fall when AQ stopped flying and HA stepped in. We know from the lawsuit with YV that AQ and HA were both in trouble, too bad that the lawsuit didn't finish earlier, maybe AQ would still be around.
 
UA444
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 5:38 pm

intotheair wrote:
...because UA didn't have any money of its own either?

Except for the fact that they did.

They didn't purchase AQ because AQ went bust during the recession and oil spike and all airlines were cutting back.
 
77H
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 6:43 pm

codc10 wrote:
77H wrote:
UA could have trimmed some of the loss-leading West Coast flights . . . Alaska's entrance in the market which has been wildly successful.


Not sure if I follow... I don't think the West Coast flights are loss-leaders at all. Competitive, yes, but I am not so sure they lose money there. And how would that explain Alaska's "wild" success?


AQ was the airline that proved the 737 could be used profitably on West Coast-Hawaii routes. It was only after AQ and TZ went bust that AS stepped in to fill the void. AS's entrance into the market has been successful. If AQ hadn't gone under, or if UA had purchased them, I doubt we'd see AS in the market to the extent we do, if at all.
 
77H
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 6:49 pm

intotheair wrote:
...because UA didn't have any money of its own either?


By the time AQ went under UA was out of bankruptcy and two years later went on to merge with CO, 55/45.bNot sure how you figure UA had so little money they couldn't purchase an airline near liquidation?
As a matter of fact, in '07 UA purchased a minority stake in AQ to aid the ailing airline.

Many atribute AQ's demise on YV, had UA purchased the airline, I imagine UA could have put pressure on YV to leave the market as YV was also a regional contractor for UA and surely wouldn't want to put the express flying in jeopardy.
 
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piedmont762
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 7:04 pm

Call me crazy but I don't ever remember UA / AQ ever being that close.
 
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usxguy
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 7:25 pm

AQ had a very senior work staff making big bucks, flying older aircraft with large fuel & maintenance bills. YV, while a catalyst, cant be given all the credit for AQ closing shop.

AQ had a very VERY traditional business model and methods.
xx
 
UA444
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 7:29 pm

piedmont762 wrote:
Call me crazy but I don't ever remember UA / AQ ever being that close.

THey definitely were from 2006-2008. UA bought a minority stake and there was talk of increasing that in 2007, but then the economy tanked.
 
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haynflyer
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 7:52 pm

I think a major issue was also the ability to fly directly from the continental US to cities such as LIH, OGG and KOA without having to fly inter-island. Indeed, one could argue that the advent of direct air service actually reduced the demand for inter-island seats and contributed to AQ's demise since it had not expanded its market outside Hawaii as much as HA had. There are a plethora of other reasons for AQ's demise, but as far as this topic is concerned, IMHO, UA didn't buy AQ because it didn't need to.

It used to be, once upon a time, that the HNL-OGG air corridor was one of the busiest in the US. Now, it's not even in the top 10.
"Nearly all men can stand adversity, but if you want to test a man's character, give him power." - Abraham Lincoln
 
77H
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 8:22 pm

haynflyer wrote:
I think a major issue was also the ability to fly directly from the continental US to cities such as LIH, OGG and KOA without having to fly inter-island. Indeed, one could argue that the advent of direct air service actually reduced the demand for inter-island seats and contributed to AQ's demise since it had not expanded its market outside Hawaii as much as HA had. There are a plethora of other reasons for AQ's demise, but as far as this topic is concerned, IMHO, UA didn't buy AQ because it didn't need to.

It used to be, once upon a time, that the HNL-OGG air corridor was one of the busiest in the US. Now, it's not even in the top 10.


Mahalo nui loa for your insight. Based on your comments it would appear that the smarter move for AQ would have been to focus on their West Coast-Hawaii routes and downsize their inter island operation. Perhaps replacing the 732 with CR7/9, Q400 or even EMB170/5's? I recall Mokulele operating the 170 for a while after AQ shut down, did the 170 have the same engine problems as the 737NG? Both have CFM engines.

AQ and HA served two distinct markets to the Mainland, again, one that AS has run with since AQ went under. There's little doubt that AQ could have co-existed with HA had they tweaked their interline operation.

77H
 
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TWA772LR
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 9:34 pm

I wonder if AQ would have made a good addition for CO to compliment their Micronesia network. Aloha had some niche destinations itself like Pago Pago and Kiribati from Hawaii.
When wasn't America great?


The thoughts and opinions shared under this username are mine and are not influenced by my employer.
 
flightsimer
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 9:39 pm

77H wrote:
haynflyer wrote:
I think a major issue was also the ability to fly directly from the continental US to cities such as LIH, OGG and KOA without having to fly inter-island. Indeed, one could argue that the advent of direct air service actually reduced the demand for inter-island seats and contributed to AQ's demise since it had not expanded its market outside Hawaii as much as HA had. There are a plethora of other reasons for AQ's demise, but as far as this topic is concerned, IMHO, UA didn't buy AQ because it didn't need to.

It used to be, once upon a time, that the HNL-OGG air corridor was one of the busiest in the US. Now, it's not even in the top 10.


Mahalo nui loa for your insight. Based on your comments it would appear that the smarter move for AQ would have been to focus on their West Coast-Hawaii routes and downsize their inter island operation. Perhaps replacing the 732 with CR7/9, Q400 or even EMB170/5's? I recall Mokulele operating the 170 for a while after AQ shut down, did the 170 have the same engine problems as the 737NG? Both have CFM engines.

AQ and HA served two distinct markets to the Mainland, again, one that AS has run with since AQ went under. There's little doubt that AQ could have co-existed with HA had they tweaked their interline operation.

77H
the 737 has CFM and the ERJ-170 has CF34's
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77H
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Re: Why Didn't UA Purchase AQ?

Thu Sep 22, 2016 10:37 pm

flightsimer wrote:
77H wrote:
haynflyer wrote:
I think a major issue was also the ability to fly directly from the continental US to cities such as LIH, OGG and KOA without having to fly inter-island. Indeed, one could argue that the advent of direct air service actually reduced the demand for inter-island seats and contributed to AQ's demise since it had not expanded its market outside Hawaii as much as HA had. There are a plethora of other reasons for AQ's demise, but as far as this topic is concerned, IMHO, UA didn't buy AQ because it didn't need to.

It used to be, once upon a time, that the HNL-OGG air corridor was one of the busiest in the US. Now, it's not even in the top 10.


Mahalo nui loa for your insight. Based on your comments it would appear that the smarter move for AQ would have been to focus on their West Coast-Hawaii routes and downsize their inter island operation. Perhaps replacing the 732 with CR7/9, Q400 or even EMB170/5's? I recall Mokulele operating the 170 for a while after AQ shut down, did the 170 have the same engine problems as the 737NG? Both have CFM engines.

AQ and HA served two distinct markets to the Mainland, again, one that AS has run with since AQ went under. There's little doubt that AQ could have co-existed with HA had they tweaked their interline operation.

77H
the 737 has CFM and the ERJ-170 has CF34's


Do you know how the CF34's stand up to high utilization with short flight times and quick turns?
 
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piedmont762
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Re: Why Didn't UA Purchase AQ?

Fri Sep 23, 2016 5:04 am

TWA772LR wrote:
I wonder if AQ would have made a good addition for CO to compliment their Micronesia network. Aloha had some niche destinations itself like Pago Pago and Kiribati from Hawaii.


Continental had nothing to do with this
 
32andBelow
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Re: Why Didn't UA Purchase AQ?

Fri Sep 23, 2016 5:20 am

77H wrote:
codc10 wrote:
77H wrote:
UA could have trimmed some of the loss-leading West Coast flights . . . Alaska's entrance in the market which has been wildly successful.


Not sure if I follow... I don't think the West Coast flights are loss-leaders at all. Competitive, yes, but I am not so sure they lose money there. And how would that explain Alaska's "wild" success?


AQ was the airline that proved the 737 could be used profitably on West Coast-Hawaii routes. It was only after AQ and TZ went bust that AS stepped in to fill the void. AS's entrance into the market has been successful. If AQ hadn't gone under, or if UA had purchased them, I doubt we'd see AS in the market to the extent we do, if at all.

AS also wanted to diversify out of Mexico because Mexico was getting violent at the time.
 
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TWA772LR
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Re: Why Didn't UA Purchase AQ?

Fri Sep 23, 2016 5:33 am

piedmont762 wrote:
TWA772LR wrote:
I wonder if AQ would have made a good addition for CO to compliment their Micronesia network. Aloha had some niche destinations itself like Pago Pago and Kiribati from Hawaii.


Continental had nothing to do with this

Just a hypothetical.
When wasn't America great?


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n7371f
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Re: Why Didn't UA Purchase AQ?

Fri Sep 23, 2016 7:59 am

It's been a while but let me try and rely what I knew regarding Aloha, United and ATA.

First of, yes a deal was very close. And, yes the abrupt spike in oil caused United to back off.

The deal also would've involved ATA and a couple dozen or so of their 737-800 ETOPS aircraft. United was to be the bankroller of the deal and Aloha would've been a subsidiary or some kind of off-shoot to United and would've flown the 738's.
 
rbavfan
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Re: Why Didn't UA Purchase AQ?

Fri Sep 23, 2016 10:27 am

77H wrote:
Aloha and United had a very close relationship as codeshare partners for a number of years. I remember Aloha's route map even featuring United in their inflight magazine and on the website. Additionally, United has a long history of serving the Hawaiian Islands spanning back to statehood with heavy brand recognition.

So why did UA not purchase AQ during its demise? Surely UA could have trimmed some of the loss-leading West Coast flights while going head to head with a much weaker HA on inter island routes. AQ paved the way in using the 737 to secondary markets to Hawaii which opened the door to Alaska's entrance in the market which has been wildly successful.

Mahalo,
77H


A close relationship for a number of years. They were fully United linked in 70's when I lived there till they went under. I would not call that a number of years.
 
strfyr51
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Re: Why Didn't UA Purchase AQ?

Tue Jan 17, 2017 1:06 pm

77H wrote:
Aloha and United had a very close relationship as codeshare partners for a number of years. I remember Aloha's route map even featuring United in their inflight magazine and on the website. Additionally, United has a long history of serving the Hawaiian Islands spanning back to statehood with heavy brand recognition.

So why did UA not purchase AQ during its demise? Surely UA could have trimmed some of the loss-leading West Coast flights while going head to head with a much weaker HA on inter island routes. AQ paved the way in using the 737 to secondary markets to Hawaii which opened the door to Alaska's entrance in the market which has been wildly successful.

Mahalo,
77H

United intended to fly interisland in Hawaii with Hawaii Based B737-222's and B737-291's.
Aloha raised such a stink that Senator Inoye got United to agree they Not fly inter-island and the could fly unlimited west coat to any and every island In Hawaii they chose to from the mainland .
Which we can and do even today.
 
maxpower1954
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Re: Why Didn't UA Purchase AQ?

Tue Jan 17, 2017 1:55 pm

77H wrote:
Aloha and United had a very close relationship as codeshare partners for a number of years. I remember Aloha's route map even featuring United in their inflight magazine and on the website. Additionally, United has a long history of serving the Hawaiian Islands spanning back to statehood with heavy brand recognition.

So why did UA not purchase AQ during its demise? Surely UA could have trimmed some of the loss-leading West Coast flights while going head to head with a much weaker HA on inter island routes. AQ paved the way in using the 737 to secondary markets to Hawaii which opened the door to Alaska's entrance in the market which has been wildly successful.

Mahalo,
77H


Hawaii became a state in 1959. United started service in 1946 - 13 years before statehood.
 
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Rajahdhani
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Re: Why Didn't UA Purchase AQ?

Tue Jan 17, 2017 8:31 pm

77H wrote:
flightsimer wrote:
77H wrote:

Mahalo nui loa for your insight. Based on your comments it would appear that the smarter move for AQ would have been to focus on their West Coast-Hawaii routes and downsize their inter island operation. Perhaps replacing the 732 with CR7/9, Q400 or even EMB170/5's? I recall Mokulele operating the 170 for a while after AQ shut down, did the 170 have the same engine problems as the 737NG? Both have CFM engines.

AQ and HA served two distinct markets to the Mainland, again, one that AS has run with since AQ went under. There's little doubt that AQ could have co-existed with HA had they tweaked their interline operation.

77H
the 737 has CFM and the ERJ-170 has CF34's


Do you know how the CF34's stand up to high utilization with short flight times and quick turns?


Can I 2nd this?

Towards the end of operations, though - how was the fleet being used? The NGs were doing the 'long-haul'/mainland flying (and because of their engines, not optomized to do intra-island flying). So what was the plan for the intra-Hawaiian? I couldn't see them dropping to turbo-props, and HA had the 717. What could have, and what did, they have planned? Back then, maybe picking up some new-ish MD-90s would have worked, but it wouldn't have been cheap enough.
 
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aloha73g
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Re: Why Didn't UA Purchase AQ?

Tue Jan 17, 2017 8:51 pm

Rajahdhani wrote:
Can I 2nd this?

Towards the end of operations, though - how was the fleet being used? The NGs were doing the 'long-haul'/mainland flying (and because of their engines, not optomized to do intra-island flying). So what was the plan for the intra-Hawaiian? I couldn't see them dropping to turbo-props, and HA had the 717. What could have, and what did, they have planned? Back then, maybe picking up some new-ish MD-90s would have worked, but it wouldn't have been cheap enough.


The 737-700s only flew trans-pac routes with an occasional positioning flight (i.e. Thursday HNL-KOA-OAK .... OAK-KOA-HNL on Monday).

They were investigating other potential replacements. The E-190 even paid a visit to the AQ hangar. The issue is that the 732s were still economically viable due to low acquisition costs, low weight, and ample supply of 732s with low cycles which made them ideal for ultra short interisland flights where fuel economy is less of an issue.

If AQ had survived I wouldn't be surprised if they had eventually switched to E-Jets, or even acquired some 717s ... remember that HA added additional 717s within a year of AQ's demise. Also, in that time frame HA was looking at adding MD80s and MD90s since they were desperate for additional seats.

-Aloha!
Aloha Airlines - The Spirit Moves Us. Gone but NEVER Forgotten. Aloha, A Hui Hou!
 
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ual747den
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Re: Why Didn't UA Purchase AQ?

Tue Jan 17, 2017 10:17 pm

United looked very closely at AQ but in the end it was just not worth it. It was not because the economy had tanked it was because AQ was going to die either way and United didn't see enough value for the cost. AQ was a very expensive operation to run with lots of senior staff who made really good money and had good benefits. United looked at what they could gain by bringing the AQ brand in that they could not get by letting AQ die and the answer was not enough. United is and was very popular in HI already so the purchase of AQ didn't offer much that UA couldn't build on their own after AQ was shut down.
Frontier Airlines - Low Fares Done Right
 
77H
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Re: Why Didn't UA Purchase AQ?

Wed Jan 18, 2017 12:12 am

strfyr51 wrote:
77H wrote:
Aloha and United had a very close relationship as codeshare partners for a number of years. I remember Aloha's route map even featuring United in their inflight magazine and on the website. Additionally, United has a long history of serving the Hawaiian Islands spanning back to statehood with heavy brand recognition.

So why did UA not purchase AQ during its demise? Surely UA could have trimmed some of the loss-leading West Coast flights while going head to head with a much weaker HA on inter island routes. AQ paved the way in using the 737 to secondary markets to Hawaii which opened the door to Alaska's entrance in the market which has been wildly successful.

Mahalo,
77H

United intended to fly interisland in Hawaii with Hawaii Based B737-222's and B737-291's.
Aloha raised such a stink that Senator Inoye got United to agree they Not fly inter-island and the could fly unlimited west coat to any and every island In Hawaii they chose to from the mainland .
Which we can and do even today.


I remember reading about this some time ago. Thank you for confirming. What time period did this occur? Pre or Post Deregulation? If post, what power would Inoye have to stop a network domestic airline from flying domestic routes regardless of the "stink" raised by another airline? Unfortunately sounds like the typical protectionism you see all throughout the Pacific. :roll:

77H

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