B6WNQX
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AS Q1 2019 Results

Thu Apr 25, 2019 9:02 pm

Operating Revenues: $1.876M
Operating Expenses: $1.851M
Operating Income: $25M
Operating Margin: 1.33%

Net Income ex: $21M
GAAP Net Income: $4M (same as 2018)

http://investor.alaskaair.com/static-fi ... ba783ccc31
 
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EA CO AS
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Re: AS Q1 2019 Results

Thu Apr 25, 2019 9:08 pm

Would have been much better YOY had it not been for that monster storm that hit SEA for several days in February; that alone cost $20M.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
PlanesNTrains
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Re: AS Q1 2019 Results

Thu Apr 25, 2019 10:24 pm

That’s ugly. Not totally unexpected, but still ugly.
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
hpff
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Re: AS Q1 2019 Results

Thu Apr 25, 2019 10:40 pm

Their merger-related costs were $20m higher this quarter YOY. Interesting that their number of mainline passengers were down but yields went up, but their regional passengers went up and yields went down.

For a company that's not growing at the moment and not quite a year out from a completed merger, these numbers seem encouraging.
 
smflyer
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Re: AS Q1 2019 Results

Thu Apr 25, 2019 10:55 pm

I think you meant Billion for operating expenses and revenue?
 
hpff
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Re: AS Q1 2019 Results

Thu Apr 25, 2019 11:27 pm

smflyer wrote:
I think you meant Billion for operating expenses and revenue?


It is in billions already? 1,000 million?
 
wedgetail737
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Re: AS Q1 2019 Results

Thu Apr 25, 2019 11:58 pm

hpff wrote:
smflyer wrote:
I think you meant Billion for operating expenses and revenue?


It is in billions already? 1,000 million?


Oh yeah...AS is a billion-dollar operation. Hey! At least it wasn't a loss.
 
FriscoHeavy
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 12:05 am

hpff wrote:
smflyer wrote:
I think you meant Billion for operating expenses and revenue?


It is in billions already? 1,000 million?


No, the poster has it wrong based on the punctuation.

Operating Revenues: $1.876Billion
Operating Expenses: $1.851Billion

Operating Revenues: $1,876Million
Operating Expenses: $1,851Million

These are now the same totals, but expressed in the correct way. You can use either, but you need to get the punctuation correct or it's way off.
Whatever
 
cledaybuck
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 12:40 am

FriscoHeavy wrote:
hpff wrote:
smflyer wrote:
I think you meant Billion for operating expenses and revenue?


It is in billions already? 1,000 million?


No, the poster has it wrong based on the punctuation.

Operating Revenues: $1.876Billion
Operating Expenses: $1.851Billion

Operating Revenues: $1,876Million
Operating Expenses: $1,851Million

These are now the same totals, but expressed in the correct way. You can use either, but you need to get the punctuation correct or it's way off.

Depends where you are in the world.
 
n7371f
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 4:17 am

Awful. Getting spanked in SFO/LAX transcon. SEA-centric management bit off way more than they can chew. Terrible numbers given the state of the industry.
 
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 4:27 am

n7371f wrote:
Awful. Getting spanked in SFO/LAX transcon. SEA-centric management bit off way more than they can chew. Terrible numbers given the state of the industry.


Settle down, turbo - these results are actually performing ahead of the company's 2019 Plan. Close-in transcons have firmed up, they've only placed the right aircraft on transcons in the past 30 days, and February saw SEA shut down worse than it has ever been. Add about $20M extra for that anomaly to get a better idea of what the quarter really looked like from a competitive standpoint.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
phxa340
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 4:31 am

n7371f wrote:
Awful. Getting spanked in SFO/LAX transcon. SEA-centric management bit off way more than they can chew. Terrible numbers given the state of the industry.


Or ... they are literally still painting aircraft due to a very recent merger which is/was always going to cause a dip in performance numbers in the early phase of said merger.
 
alfa164
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 5:28 am

EA CO AS wrote:
Settle down, turbo - these results are actually performing ahead of the company's 2019 Plan.


If there results are "ahead of... the Plan". what was the plan? To lose money?

Stock is down in after-hours trading, so we know what investors "plans" are...

:roll:
I'm going to have a smokin' hot body again!
I have decided to be cremated....
 
B6WNQX
Topic Author
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 5:53 am

smflyer wrote:
I think you meant Billion for operating expenses and revenue?


Yes, sorry about that. Was thinking in millions instead of billions when typing it out. It won’t let me edit, but I’m sure folks will read the other comments.
 
n7371f
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 6:16 am

Well that's great they're inside internal numbers - and it helps the BoD are all in on Brad & Ben - but they stink. Even $20 mil for weather. They're awful. I suggest you look at the overall economic numbers for comparison. Maybe AS and B6 are bound for one another - both financials are grossly underwhelming.

And in the quarter having to offer 2-for-1 on transcon on from SFO/LAX & then MVP after 1 roundtrip. There's always a spin but the numbers are crap and the optics are not good for the acquired network.

However the chatter that AS management is now discussing the (remote) possibility that the 321N could be an aircraft for a better transcon F product tells markets they're already questioning their plan.

Look, AS has SEA locked down. SEA customers are loyal to no end. And they'll fly AS (with assist from BofA card) and keep thinking they're the best no matter what else the market offers. It's the Virgin markets that are a hot mess and so far B & B don't have the answers.

AS is not making $ on the Virgin markets and with the present operating world, that's a real concern.

EA CO AS wrote:
n7371f wrote:
Awful. Getting spanked in SFO/LAX transcon. SEA-centric management bit off way more than they can chew. Terrible numbers given the state of the industry.


Settle down, turbo - these results are actually performing ahead of the company's 2019 Plan. Close-in transcons have firmed up, they've only placed the right aircraft on transcons in the past 30 days, and February saw SEA shut down worse than it has ever been. Add about $20M extra for that anomaly to get a better idea of what the quarter really looked like from a competitive standpoint.
 
ericm2031
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 6:31 am

Weak transcon fares were a big downer this quarter. Management is hoping lie-flats aren't demanded of the customer as it will take awhile to get to that point. The part that stood out to me is that they are implying that it is more beneficial to please their loyal customers into 'possibly' getting upgraded as opposed to trying to sell out a full F cabin on those routes.

If they can't get transcons to work well, then I question whether the costs of acquiring VX are worth the benefits.

The west coast is a bloodbath and nobody is blinking yet, which nearly 100% of their routes originate from there. One saving grace is that the ULCC's don't really have a huge presence in CA/OR/WA...yet. With WN starting Hawaii, SY jumping into the market, and UA holding their ground, that is putting pressure those routes. G4 is now planning MX, which won't help anything if they do any flying from the west. The only real commanding presence they have right now is on their AK flights, but are facing enormous headwinds pretty much everywhere else.
 
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 6:36 am

n7371f wrote:
the chatter that AS management is now discussing the (remote) possibility that the 321N could be an aircraft for a better transcon F product tells markets they're already questioning their plan.


It's not chatter; it was a simple answer to a simple question, pointing out that the 737 isn't ideally suited for a premium transcon lie-flat experience, the A321 is the plane for that, and they still feel that flying under the lie-flat arms race at a lower price point with 190 seats is better than having an expensive sub-fleet with only 156 seats on the same type, chasing a very small market that will require a new and more expensive product to be rolled out every few years. Also, when - not if - the economy goes sideways during a recession, AS is far better suited to weather that storm with 190 seats than B6 is at 156.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
N757ST
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 12:36 pm

EA CO AS wrote:
n7371f wrote:
the chatter that AS management is now discussing the (remote) possibility that the 321N could be an aircraft for a better transcon F product tells markets they're already questioning their plan.


It's not chatter; it was a simple answer to a simple question, pointing out that the 737 isn't ideally suited for a premium transcon lie-flat experience, the A321 is the plane for that, and they still feel that flying under the lie-flat arms race at a lower price point with 190 seats is better than having an expensive sub-fleet with only 156 seats on the same type, chasing a very small market that will require a new and more expensive product to be rolled out every few years. Also, when - not if - the economy goes sideways during a recession, AS is far better suited to weather that storm with 190 seats than B6 is at 156.


Maybe, or maybe AS is going to fly around 30-40 empty seats vs the 159 seat mint aircraft. I personally think there is a future for both airlines, possibly even a future together. That said, I find this thread a teeny tiny bit humorous when just yesterday you called jetblue a dead airline flying, even though blue is forecast to make as much if not more money this year then AK, and has half the amount of debt. I don’t think either airline is doing poorly, they’re just going through a quarter with a poorly placed holiday period and both have good forecasts for the year and beyond. I guess all I’m saying is less doom toward your competitors when your sitting in a bit of a glass house.
 
CobaltScar
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 12:36 pm

EA CO AS wrote:
n7371f wrote:
the chatter that AS management is now discussing the (remote) possibility that the 321N could be an aircraft for a better transcon F product tells markets they're already questioning their plan.


It's not chatter; it was a simple answer to a simple question, pointing out that the 737 isn't ideally suited for a premium transcon lie-flat experience, the A321 is the plane for that, and they still feel that flying under the lie-flat arms race at a lower price point with 190 seats is better than having an expensive sub-fleet with only 156 seats on the same type, chasing a very small market that will require a new and more expensive product to be rolled out every few years. Also, when - not if - the economy goes sideways during a recession, AS is far better suited to weather that storm with 190 seats than B6 is at 156.



If that is what they are thinking they may as well get out of transcons altogether. If they can't compete with B6 now, they sure wont compete with Southwest and ULCC that will offer the same 80's experience AS is offering them on transcons at far lower prices.

The AS pilots have revealed at recent employee group meetings management confessed the transcon markets are all losing money. Take one look at the interior of the AS plane vs. the new B6 320's and 321's and its obvious why.
 
MIflyer12
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 12:42 pm

ericm2031 wrote:
The west coast is a bloodbath and nobody is blinking yet, which nearly 100% of their routes originate from there. One saving grace is that the ULCC's don't really have a huge presence in CA/OR/WA...yet.


CA is just one piece of the West Coast market - but it's by far the biggest piece. Maybe you don't call WN a ULCC? From the Dallas Morning News April '17:

Since arriving in California in the 1980s, Southwest has become a dominant force, carrying the most passengers to, from and within the state with nearly 700 daily departures across 10 airports.

Through the first nine months of 2016, Southwest boarded 18.3 million passengers at California airports, compared to 7.4 million at Alaska and Virgin America combined.


And that's all before WN started Hawaii service. In buying VX for California, AS brought a knife to a gun fight.

https://www.dallasnews.com/business/sou ... nia-routes
 
UALifer
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 1:11 pm

Arguing that a $20M hit due to weather is why AS performed poorly on a relative basis is asinine. I’m sorry. ORD/MDW were all but shut down for multiple days due to polar vortex, DEN was shut down due to snow storms, SFO had some of its worst winter weather in years leading to weeks of multiple-hour GDPs and high cancelation rates, not to mention the annual bad weather in the northeast which affects almost all carriers except Alaska. Oh and the MAX grounding of course didn’t affect Alaska either. So saying that adding in $20M would give you a better view of how AS fared in the competitive landscape is absurd, when you could easily add way more than that to AA, WN, and UA.
 
tphuang
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 1:28 pm

CobaltScar wrote:
EA CO AS wrote:
n7371f wrote:
the chatter that AS management is now discussing the (remote) possibility that the 321N could be an aircraft for a better transcon F product tells markets they're already questioning their plan.


It's not chatter; it was a simple answer to a simple question, pointing out that the 737 isn't ideally suited for a premium transcon lie-flat experience, the A321 is the plane for that, and they still feel that flying under the lie-flat arms race at a lower price point with 190 seats is better than having an expensive sub-fleet with only 156 seats on the same type, chasing a very small market that will require a new and more expensive product to be rolled out every few years. Also, when - not if - the economy goes sideways during a recession, AS is far better suited to weather that storm with 190 seats than B6 is at 156.



If that is what they are thinking they may as well get out of transcons altogether. If they can't compete with B6 now, they sure wont compete with Southwest and ULCC that will offer the same 80's experience AS is offering them on transcons at far lower prices.

The AS pilots have revealed at recent employee group meetings management confessed the transcon markets are all losing money. Take one look at the interior of the AS plane vs. the new B6 320's and 321's and its obvious why.


I mean it's pretty obvious they have been loosing money on all the transcon stuff. The public available data all shows that. Granted, I normally only follow B6 routes, but all the non-SEA transcon stuff that I've looked at are below average performers for AS. A year from now, I don't see AS using all of the slots they have at JFK.

Mint has 159 seats (not 156) and it only has 6% higher cost than 150 seat A320s. If AS management is just waiting for mint to fail on a downturn, they are going to be in for a nasty surprise. This is only going to grow more. Look out for mint on FLL-SEA. If you follow FT, you'd see that a large chunk of mint flyers are high net worth ff flying on their own dime (rather than corporate travel). That group is the last to go in a recession. This is their second most profitable area after JFK VFR travel.

If you look at recent AS moves to attract cali flyers like BOGO on transcon, double miles on transcon and MVP aftr 1 R/T. They are trying pretty hard to get this to work. I would even say these moves are ones of obvious desperation.

I would also point out it's a lot harder for AS to add a lie flat subfleet. Keep in mind their current model has built a large following in PNW with a very generous mileage program, lounge access, cheap upgrade for higher level MVPs and free upgrade windows. All of which B6 didn't have prior to adding mint. For AS to add lie flat, they would have to add a lot of complexity to their revenue management platform, while also pissing off a lot of loyal ff in PNW who are used those cheap upgrades (a lot of time free upgrade for those purchasing last minute). This type of revenue management system doesn't work well on routes with a lot of premium demand but works pretty well out of SEA/PDX. AS would be stupid to drive away its loyal customers at a time when DL is encroaching. Point is, it's not easy to add a successful lie flat subfleet like B6 has.

As for their results, this wasn't a good quarter. They are going to have the worst pre-tax margin ex-special items of domestic carriers after being the worst in Q4. Sure the RASM is up, but that's with a signficant increase in Regional flying and lower mainline utilization against a very easy comp(they had terrible Q1/Q2 in 2018). And their RASM guidance for Q2 isn't much better when you consider the additional regional flying, lower mainline utialization and easy comp of 2018. The first 2 are what will drive up CASM-ex in Q2. And that's after they cut a bunch of routes in Q3/Q4 of 2018. So in the second half of the year, they will be up against much tougher comps in unit revenues. I've seen no evidence that their pricing power has improved in the transcon or Hawaii or intra-west coast market. If anything, the first 2 has fallen back. So I'd love to see where is this synergy that AS keeps talking about.
 
cledaybuck
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 1:41 pm

tphuang wrote:
CobaltScar wrote:
EA CO AS wrote:

It's not chatter; it was a simple answer to a simple question, pointing out that the 737 isn't ideally suited for a premium transcon lie-flat experience, the A321 is the plane for that, and they still feel that flying under the lie-flat arms race at a lower price point with 190 seats is better than having an expensive sub-fleet with only 156 seats on the same type, chasing a very small market that will require a new and more expensive product to be rolled out every few years. Also, when - not if - the economy goes sideways during a recession, AS is far better suited to weather that storm with 190 seats than B6 is at 156.



If that is what they are thinking they may as well get out of transcons altogether. If they can't compete with B6 now, they sure wont compete with Southwest and ULCC that will offer the same 80's experience AS is offering them on transcons at far lower prices.

The AS pilots have revealed at recent employee group meetings management confessed the transcon markets are all losing money. Take one look at the interior of the AS plane vs. the new B6 320's and 321's and its obvious why.


I mean it's pretty obvious they have been loosing money on all the transcon stuff. The public available data all shows that. Granted, I normally only follow B6 routes, but all the non-SEA transcon stuff that I've looked at are below average performers for AS. A year from now, I don't see AS using all of the slots they have at JFK.

Mint has 159 seats (not 156) and it only has 6% higher cost than 150 seat A320s. If AS management is just waiting for mint to fail on a downturn, they are going to be in for a nasty surprise. This is only going to grow more. Look out for mint on FLL-SEA. If you follow FT, you'd see that a large chunk of mint flyers are high net worth ff flying on their own dime (rather than corporate travel). That group is the last to go in a recession. This is their second most profitable area after JFK VFR travel.

If you look at recent AS moves to attract cali flyers like BOGO on transcon, double miles on transcon and MVP aftr 1 R/T. They are trying pretty hard to get this to work. I would even say these moves are ones of obvious desperation.

I would also point out it's a lot harder for AS to add a lie flat subfleet. Keep in mind their current model has built a large following in PNW with a very generous mileage program, lounge access, cheap upgrade for higher level MVPs and free upgrade windows. All of which B6 didn't have prior to adding mint. For AS to add lie flat, they would have to add a lot of complexity to their revenue management platform, while also pissing off a lot of loyal ff in PNW who are used those cheap upgrades (a lot of time free upgrade for those purchasing last minute). This type of revenue management system doesn't work well on routes with a lot of premium demand but works pretty well out of SEA/PDX. AS would be stupid to drive away its loyal customers at a time when DL is encroaching. Point is, it's not easy to add a successful lie flat subfleet like B6 has.

As for their results, this wasn't a good quarter. They are going to have the worst pre-tax margin ex-special items of domestic carriers after being the worst in Q4. Sure the RASM is up, but that's with a signficant increase in Regional flying and lower mainline utilization against a very easy comp(they had terrible Q1/Q2 in 2018). And their RASM guidance for Q2 isn't much better when you consider the additional regional flying, lower mainline utialization and easy comp of 2018. The first 2 are what will drive up CASM-ex in Q2. And that's after they cut a bunch of routes in Q3/Q4 of 2018. So in the second half of the year, they will be up against much tougher comps in unit revenues. I've seen no evidence that their pricing power has improved in the transcon or Hawaii or intra-west coast market. If anything, the first 2 has fallen back. So I'd love to see where is this synergy that AS keeps talking about.

Would everybody have been better off had B6 won the bidding for VX?
 
CobaltScar
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 1:41 pm

The AS FA contract would also NEVER allow a completely sequestered based and specially trained cadre of premium cabin FAs that would be the only ones allowed to work the front of the cabin, so they will never be able to match the customer service B6 has in Mint either.

I think their management knows they are out of the trans con running, and have decided to not put ANY eggs into that basket and just run barley enough service that is demanded by their SEA based FFs. So basically AS flys to JFK for the same reasons B6 does Worchester.... reasons other than any dreams or hopes of profit.

cledaybuck wrote:
Would everybody have been better off had B6 won the bidding for VX?


Yes, absolutely.

-VX pilots would of not lost their JFK based and been reduced to regional Cali flying from the transcons they use to do
-B6 could of gave LGB a huge middle finger and moved into LAX fully
-VX/B6/AS FA would of all rolled into the much better AS FA contract
-VX/AS Pilots would of benefited from the much better B6 Pilot contract with its iron clad scope clauses which would of lead to...

Lifting the QX staff out of their poverty as the regional operation is closed down and rolled into the unified airline.

and

Putting this incarnation of AS out of its misery where it is boxed in like a trapped animal and let it grow wings and fly out of the cage and into a major airline with trans atlantic plans.
Last edited by CobaltScar on Fri Apr 26, 2019 2:07 pm, edited 1 time in total.
 
ericm2031
Posts: 1033
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 1:59 pm

MIflyer12 wrote:
ericm2031 wrote:
The west coast is a bloodbath and nobody is blinking yet, which nearly 100% of their routes originate from there. One saving grace is that the ULCC's don't really have a huge presence in CA/OR/WA...yet.


CA is just one piece of the West Coast market - but it's by far the biggest piece. Maybe you don't call WN a ULCC? From the Dallas Morning News April '17:

Since arriving in California in the 1980s, Southwest has become a dominant force, carrying the most passengers to, from and within the state with nearly 700 daily departures across 10 airports.

Through the first nine months of 2016, Southwest boarded 18.3 million passengers at California airports, compared to 7.4 million at Alaska and Virgin America combined.


And that's all before WN started Hawaii service. In buying VX for California, AS brought a knife to a gun fight.

https://www.dallasnews.com/business/sou ... nia-routes


No, I don’t consider WN an ULCC. They are vastly different than one. But I agree, they did bring a knife to a gun fight. WN went all in and expanded very rapidly. You also have UA, with 2 CA hubs and servicing the major airports as well as the small ones (except LGB and OAK-which will be reopened according to Kirby). AA has also expanded quite a bit in CA by connecting the LUS cities with DFW and also added STS (as has UA).

VX was not a huge player on the intra west coast flying, so if they aren’t going to give the transcons a lot of attention, I feel they could have just grown on their own without the pains of the merger. They did get access to gates at SFO/LAX and slots at JFK, which are valuable, although AS doesn’t seem to like the complexity of the SFO hub and bussing people from OAK/SJC when there’s flow programs in place.
 
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diverdave
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 7:49 pm

n7371f wrote:
AS is not making $ on the Virgin markets and with the present operating world, that's a real concern.


For those with short memories, VX was not doing so great on those markets either.

Plus it is not exactly a news flash that the integration is costly and not producing immediate benefits. This was always going to be the most difficult merger in recent airline history, with AS and VX being such different airlines. Huge differences in fleets, workforces, customer bases, routes, etc. AS leadership made a big bet that they could overcome all of this and be in a better position for the long run. Given their track record, I'd tend to give them the benefit of the doubt.

Plus they made money in what is typically a lousy quarter. It wasn't a big profit, but it was a profit.

Cheers,
David
 
impilot
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 8:08 pm

diverdave wrote:
n7371f wrote:
AS is not making $ on the Virgin markets and with the present operating world, that's a real concern.


For those with short memories, VX was not doing so great on those markets either.

Plus it is not exactly a news flash that the integration is costly and not producing immediate benefits. This was always going to be the most difficult merger in recent airline history, with AS and VX being such different airlines. Huge differences in fleets, workforces, customer bases, routes, etc. AS leadership made a big bet that they could overcome all of this and be in a better position for the long run. Given their track record, I'd tend to give them the benefit of the doubt.

Plus they made money in what is typically a lousy quarter. It wasn't a big profit, but it was a profit.

Cheers,
David


I don’t think AS bought VX thinking it would help them in the long run. They did it because the effects of B6 buying VX would have been far worse for AS in the long run than overpaying for an outfit they didn’t really want.
 
ScottB
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 8:11 pm

CobaltScar wrote:
B6 does Worchester


Worcester. And it's pronounced like Wooster, but the "Woo" is said like one would say in "Wookie" or "wood," not the word "woo." And if you want to say it like a true Masshole, it's "wuhstuh." Bonus points if you say it that way like someone who's been smoking for 40 years and you add "mass" to the end as in "wuhstuhmass."

CobaltScar wrote:
VX pilots would of...
-B6 could of...


"would have"
"could have"

cledaybuck wrote:
Would everybody have been better off had B6 won the bidding for VX?


Not really. It probably would have been worse for the flying public in that the number of competitors in the LAX & SFO transcon markets would have declined. B6 would have benefited more as the default choice for customers without strong ties to any of the legacy frequent flyer programs, and they would have gained access to more gates at LAX & SFO. AS would have been better-off in the short term but they'd still face the quandary of how to grow beyond their niche in the Pacific NW; they'd also be faced with being overly reliant on the economic fortunes of the Seattle area.
 
cledaybuck
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 8:26 pm

ScottB wrote:
Not really. It probably would have been worse for the flying public in that the number of competitors in the LAX & SFO transcon markets would have declined. B6 would have benefited more as the default choice for customers without strong ties to any of the legacy frequent flyer programs, and they would have gained access to more gates at LAX & SFO. AS would have been better-off in the short term but they'd still face the quandary of how to grow beyond their niche in the Pacific NW; they'd also be faced with being overly reliant on the economic fortunes of the Seattle area.
I guess I wasn't referring to the flying public. I was more wonder whether B6 AND AS would have been better off. Sounds like you are saying yes for B6 and maybe for AS.
 
hpff
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Re: AS Q1 2019 Results

Fri Apr 26, 2019 11:22 pm

cledaybuck wrote:
I was more wonder whether B6 AND AS would have been better off. Sounds like you are saying yes for B6 and maybe for AS.


AS wouldn't have been better off. Prior to the merger they had a decent amount of west coast flying outside of the PNW, if B6 wins the race for VX now AS has an additional competitor in the California market. B6's west coast network is LGB and transcons. AS' options for organic growth were relatively limited as well - there are only so many SEA-CMH routes to go around.

It's myopic to assume that not buying VX would have meant everything would be rosy for AS. It's just a different type of fight.
 
gmcc
Posts: 239
Joined: Tue Apr 25, 2006 3:54 am

Re: AS Q1 2019 Results

Sat Apr 27, 2019 12:11 am

LAWA seem to think that AS will do well enough at LAX to be approving an amended lease.
https://lawa.granicus.com/MetaViewer.ph ... a_id=37500
Most of it is clean up of the VX lease etc but there are a couple of points I think are interesting

1) Looks like there is some regauging of gates coming to T6.

Proposed Terminal 6 Improvements
Alaska and Los Angeles World Airport (LAWA) staff have initiated discussions on potential terminal improvements, including upgrading the Security Screening Check Point, improving hold room experience and regauging gate layout.

I would guess there will be fewer wide body capable gates.

2) It appears that there is the potential for at least a partial rebuild of T6

The terms of the proposed Amendment will commence on the first day of the month following Board and Los Angeles City Council approval and terminate on November 1, 2025, unless a Potential New Terminal Facility with at least 8 gates is operational or under construction (including demolition or other enabling work) by October 31, 2025, in which case the Lease shall terminate on January 1, 2028, unless terminated subject to the following early termination provisions.
 
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452QX
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Re: AS Q1 2019 Results

Sat Apr 27, 2019 1:15 am

It’ll be interesting to see what happens go the ground loading gates now that the Q400s have stopped flying to LAX, granted they can still be used for E175s with a boarding ramp.
 
F9Animal
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Joined: Thu Dec 16, 2004 7:13 am

Re: AS Q1 2019 Results

Sat Apr 27, 2019 2:52 am

UALifer wrote:
Arguing that a $20M hit due to weather is why AS performed poorly on a relative basis is asinine. I’m sorry. ORD/MDW were all but shut down for multiple days due to polar vortex, DEN was shut down due to snow storms, SFO had some of its worst winter weather in years leading to weeks of multiple-hour GDPs and high cancelation rates, not to mention the annual bad weather in the northeast which affects almost all carriers except Alaska. Oh and the MAX grounding of course didn’t affect Alaska either. So saying that adding in $20M would give you a better view of how AS fared in the competitive landscape is absurd, when you could easily add way more than that to AA, WN, and UA.


That storm was insane, and there is just not enough equipment in SEA to handle the snow we got. It took me 4 days to even get my car out of the driveway. SEA is the meat and potatoes for Alaska, and it hit them hard. When the major hailstorm hit DEN and grounded half of Frontiers fleet, it was an enormous mess and loss.
I Am A Different Animal!!
 
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EA CO AS
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Re: AS Q1 2019 Results

Sat Apr 27, 2019 4:03 am

impilot wrote:
I don’t think AS bought VX thinking it would help them in the long run.


Actually, you'd be mistaken about that. AS was already looking at how some smaller carriers, including VX, might fit into their network to gain immediate scale, and were definitely in the M&A mindset - they were looking to buy, and soon. Then, a few months in, VX made themselves available for sale. The timing was such that the people at AS almost couldn't believe it. The only reason they overpaid is that B6 came in and started a bidding war, one they weren't able to hang in.

Even having overpaid for VX, AS immediately got what they wanted; immediate size in CA, a turnkey transcon operation that fit into their network perfectly, and a flexible fleet plan thanks to the structure of VX's leases. All for far less than it would have cost to do organically, and they've already paid off a significant portion of the debt taken on to buy VX outright.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
gmcc
Posts: 239
Joined: Tue Apr 25, 2006 3:54 am

Re: AS Q1 2019 Results

Sat Apr 27, 2019 4:13 am

452QX wrote:
It’ll be interesting to see what happens go the ground loading gates now that the Q400s have stopped flying to LAX, granted they can still be used for E175s with a boarding ramp.


I would guess the ground gates will disappear in any rebuild, along with most of the original satelite. The satelite causes a lot of changing floor levels which lead to a lot of wasted space for ramps, escalators, and stairs.

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