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JammyBritton27
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Alaska Air announces Q3 2019 results

Thu Oct 24, 2019 8:15 pm

https://news.alphastreet.com/alaska-air ... s-q3-2019/

Reported an 8% YoY growth in total operating revenues to $2.38 billion.
GAAP net income was $322 million, or $2.60 per share, compared to $217 million, or $1.75 per share in the prior-year period. Adjusted net income was $326 million, or $2.63 per share.
Paid a $0.35 per-share cash dividend in the third quarter, a 9% increase over the dividend paid in the third quarter of 2018.
Repurchased a total of 874,019 shares of common stock for approximately $53 million in the first nine months of 2019.
Generated $1.4 billion of operating cash flow in the first nine months of 2019.
Made a voluntary contribution of $65 million to defined benefit pension plans in the third quarter.
Held $1.6 billion in unrestricted cash and marketable securities as of Sept. 30, 2019.
Reduced debt-to-capitalization ratio to 42% as of Sept. 30, 2019 compared to 47% as of Dec. 31, 2018.
 
Varsity1
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Re: Alaska Air announces Q3 2019 results

Thu Oct 24, 2019 8:23 pm

Wow!

Almost 15%(?) margins.
 
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EA CO AS
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Re: Alaska Air announces Q3 2019 results

Thu Oct 24, 2019 8:38 pm

Varsity1 wrote:
Wow!

Almost 15%(?) margins.



17.6% for Q3. Not that I’m counting... ;)
"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
 
Varsity1
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Re: Alaska Air announces Q3 2019 results

Thu Oct 24, 2019 8:48 pm

EA CO AS wrote:
Varsity1 wrote:
Wow!

Almost 15%(?) margins.



17.6% for Q3. Not that I’m counting... ;)


Has to be among the highest net margins we have ever seen in the airline industry. It's impressive.

To put it in perspective, it's 75% of AA's income on just 20% of the revenue..
 
weaglibrium
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Re: Alaska Air announces Q3 2019 results

Thu Oct 24, 2019 8:57 pm

Varsity1 wrote:
EA CO AS wrote:
Varsity1 wrote:
Wow!

Almost 15%(?) margins.



17.6% for Q3. Not that I’m counting... ;)


Has to be among the highest net margins we have ever seen in the airline industry. It's impressive.

To put it in perspective, it's 75% of AA's income on just 20% of the revenue..


First - $322m (income) into $2,340m (revenue) = 13.8% margin.

Second - it's a strong but not spectacular margin, DL and WN have been in this neighborhood for some time.

Third - Even among only among US carriers, margins have been much higher before. See G4 a few years ago.
 
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EA CO AS
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Re: Alaska Air announces Q3 2019 results

Thu Oct 24, 2019 9:18 pm

weaglibrium wrote:
Varsity1 wrote:
EA CO AS wrote:


17.6% for Q3. Not that I’m counting... ;)


Has to be among the highest net margins we have ever seen in the airline industry. It's impressive.

To put it in perspective, it's 75% of AA's income on just 20% of the revenue..


First - $322m (income) into $2,340m (revenue) = 13.8% margin.

Second - it's a strong but not spectacular margin, DL and WN have been in this neighborhood for some time.

Third - Even among only among US carriers, margins have been much higher before. See G4 a few years ago.


It’s $421M pretax.
"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
 
LAXBUR
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Re: Alaska Air announces Q3 2019 results

Thu Oct 24, 2019 9:36 pm

This will really upset those trying to push the narrative Alaska is struggling and that they don’t know what they’re doing.
 
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Re: Alaska Air announces Q3 2019 results

Thu Oct 24, 2019 9:39 pm

LAXBUR wrote:
This will really upset those trying to push the narrative Alaska is struggling and that they don’t know what they’re doing.


Especially when they realize that by the end of December AS will have paid off 75% of the $2B that was borrowed to purchase VX.
"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
 
Varsity1
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Re: Alaska Air announces Q3 2019 results

Thu Oct 24, 2019 9:42 pm

weaglibrium wrote:
Varsity1 wrote:
EA CO AS wrote:


17.6% for Q3. Not that I’m counting... ;)


Has to be among the highest net margins we have ever seen in the airline industry. It's impressive.

To put it in perspective, it's 75% of AA's income on just 20% of the revenue..


First - $322m (income) into $2,340m (revenue) = 13.8% margin.

Second - it's a strong but not spectacular margin, DL and WN have been in this neighborhood for some time.

Third - Even among only among US carriers, margins have been much higher before. See G4 a few years ago.


Margins are calculated pre tax. I don't remember Delta turning numbers like this, 15% is the best I remember.
 
LAXBUR
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Re: Alaska Air announces Q3 2019 results

Thu Oct 24, 2019 9:50 pm

EA CO AS wrote:
LAXBUR wrote:
This will really upset those trying to push the narrative Alaska is struggling and that they don’t know what they’re doing.


Especially when they realize that by the end of December AS will have paid off 75% of the $2B that was borrowed to purchase VX.


So much of the rhetoric here ignores the facts. Or they post a bunch of numbers/data to seem credible to insert their opinion as fact even though it doesn’t paint the whole picture.

Sure I’m pro-Alaska but I don’t run around wishing for the demise of other airlines. It is really weird.
 
ethernal
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Re: Alaska Air announces Q3 2019 results

Thu Oct 24, 2019 9:54 pm

The forced capacity discipline that the 737MAX groundings (in combination with a good, if slowing, economy) has really done wonders to airlines in the back half of this year. I'm guessing the airlines secretly love it - it's basically collusion without the need to collude.

It will be curious to see how margins hold after the MAX return to service - especially in context of potential economic headwinds (or, honestly, even Q4 when fleets are more relaxed from a capacity perspective except for a couple of weeks).
 
roadrunner165
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Re: Alaska Air announces Q3 2019 results

Fri Oct 25, 2019 1:17 pm

Good job Alaska Air. A solid quarter. As a soon to be MVP Gold I’m glad to say I helped contribute!
 
dmorbust
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Re: Alaska Air announces Q3 2019 results

Fri Oct 25, 2019 4:30 pm

EA CO AS wrote:
LAXBUR wrote:
This will really upset those trying to push the narrative Alaska is struggling and that they don’t know what they’re doing.


Especially when they realize that by the end of December AS will have paid off 75% of the $2B that was borrowed to purchase VX.


Kudos to AS. Very impressive quarter.
 
SUNCTRY738
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Re: Alaska Air announces Q3 2019 results

Fri Oct 25, 2019 5:14 pm

Great job AS and all the AS employees.

One has to wonder what potential acquisition AS management might be looking at if they will have paid off 75% of the cost of the VX purchase. They have to grow to survive or they will face being purchased. I see them as the acquirer. But of whom? B6 is my bet. Perhaps a bidding war with WN over B6 is on the horizon. Just guessing and speculating.
 
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seabosdca
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Re: Alaska Air announces Q3 2019 results

Fri Oct 25, 2019 6:00 pm

Clearly Delta is about to kick Alaska out of Seattle and Alaska is rudderless and flailing. :duck:

With that in mind, now that the financial impact of the merger seems to be in the past, I'd love to see the airline crack its wallet a bit for a couple of improvements. First, it seems like standards for cabin deep cleaning have gone downhill a bit lately. Maybe it's just bad luck, but I've been on a couple pretty new 739ERs lately that looked like no one had paid attention to bins, sidewalls, or ceiling panels in a while. Second, would it really kill the airline to include a few more fruit and cheese plates in the catering? Pretty much any time I'm seated behind the exits, there is zero chance of getting one if I didn't reserve in advance. Seems like revenue left on the table.
 
vadodara
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Re: Alaska Air announces Q3 2019 results

Fri Oct 25, 2019 9:24 pm

EA CO AS wrote:
LAXBUR wrote:
This will really upset those trying to push the narrative Alaska is struggling and that they don’t know what they’re doing.


Especially when they realize that by the end of December AS will have paid off 75% of the $2B that was borrowed to purchase VX.


Indeed! With new growth opportunities in CA.

Neither AD nor VX would have had these prior to merger.
 
lhpdx
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Re: Alaska Air announces Q3 2019 results

Fri Oct 25, 2019 9:46 pm

Great job AS and all the AS employees...
 
metaldirtnskin
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Re: Alaska Air announces Q3 2019 results

Fri Oct 25, 2019 9:59 pm

seabosdca wrote:
With that in mind, now that the financial impact of the merger seems to be in the past, I'd love to see the airline crack its wallet a bit for a couple of improvements. First, it seems like standards for cabin deep cleaning have gone downhill a bit lately. Maybe it's just bad luck, but I've been on a couple pretty new 739ERs lately that looked like no one had paid attention to bins, sidewalls, or ceiling panels in a while. Second, would it really kill the airline to include a few more fruit and cheese plates in the catering? Pretty much any time I'm seated behind the exits, there is zero chance of getting one if I didn't reserve in advance. Seems like revenue left on the table.


I've had the same experience on both counts.

It would also be nice to see them put real effort into expanding their network, because while the VX merger was touted as doing that, in some ways it had the opposite effect because it led to the pulling back of their remaining domestic partnerships. There are plenty of routes I've had to fly for work where, when I first became an MVP, I could book (and earn miles) through AS, but no longer. I'm still waiting to see what value proposition they are going to offer that someone else can't.
 
jplatts
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Re: Alaska Air announces Q3 2019 results

Fri Oct 25, 2019 10:33 pm

seabosdca wrote:
Clearly Delta is about to kick Alaska out of Seattle and Alaska is rudderless and flailing. :duck:

With that in mind, now that the financial impact of the merger seems to be in the past, I'd love to see the airline crack its wallet a bit for a couple of improvements. First, it seems like standards for cabin deep cleaning have gone downhill a bit lately. Maybe it's just bad luck, but I've been on a couple pretty new 739ERs lately that looked like no one had paid attention to bins, sidewalls, or ceiling panels in a while. Second, would it really kill the airline to include a few more fruit and cheese plates in the catering? Pretty much any time I'm seated behind the exits, there is zero chance of getting one if I didn't reserve in advance. Seems like revenue left on the table.


AS/QX still has over 50% market share in the SEA market. AS also has nonstop service out of SEA to many destinations that DL doesn't currently serve nonstop from SEA.

AS could add SEA-CVG nonstop service in order to better compete against DL in the SEA market. CVG can probably support nonstop service to SEA on AS in addition to DL since:
(a) Over 38% of those traveling between SEA and CVG were connecting on airlines other than DL in Q4 2018,
(b) Greater Cincinnati is the only DL hub or focus city market that isn't already served by AS,
(c) Both DL and AS already serve DL's ATL, BOS, DTW, LAX, MSP, JFK, RDU, and SLC hubs/focus cities nonstop from SEA,
(d) CVG used to have 3 daily nonstops out of SEA on DL prior to the DL-NW merger, but DL reduced SEA-CVG to 1 daily nonstop with the downsizing of its CVG operation subsequent to the DL-NW merger,
(e) There are business ties between Greater Seattle and Greater Cincinnati such as the significant Amazon presence in Northern Kentucky, the Boeing-GE Aviation/CFM International business relationship to support CVG-SEA nonstop service on AS in addition to DL,
(f) The eastbound DL SEA-CVG nonstop flight is currently a redeye flight that departs from SEA at 10:45 Pacific Time and arrives at CVG at 5:55 AM Eastern Time, whereas AS would likely operate a daytime nonstop flight in the eastbound direction on SEA-CVG that departs from SEA in the morning and arrives at CVG in the afternoon or evening if AS adds service to CVG,
and
(g) There are some travelers in both the SEA and CVG markets who would prefer a daytime nonstop flight over a redeye nonstop flight.

There are also a few other nonstop routes such as SEA-CLT, SEA-CLE, SEA-BDL, and SEA-ORF that could be added by AS since CLT, CLE, BDL, and ORF are four of the top destinations that aren't currently served by AS.
 
SUNCTRY738
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Re: Alaska Air announces Q3 2019 results

Fri Oct 25, 2019 11:39 pm

How about a purchase of F9 and a building of another large hub in DEN? Gets rid of a no frills competitor and gives them a possible great hub in DEN if they can catch up to WN and overtake WN there.

Better yet, a buyout of WN.
 
werdywerd
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Re: Alaska Air announces Q3 2019 results

Fri Oct 25, 2019 11:51 pm

EA CO AS wrote:
LAXBUR wrote:
This will really upset those trying to push the narrative Alaska is struggling and that they don’t know what they’re doing.


Especially when they realize that by the end of December AS will have paid off 75% of the $2B that was borrowed to purchase VX.


And gets them even closer to 100% Paid off and moving on to the the B6 Acquisition.

When I worked at AS (Corporate side) for the short time I was there, they estimated making a push for B6 between 2021 and 2023. Let's see if it really happens.
 
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NameOmitted
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 12:08 am

SUNCTRY738 wrote:
One has to wonder what potential acquisition AS management might be looking at if they will have paid off 75% of the cost of the VX purchase.

If there is a Santa, it'll be Ravn. Yeah, it would reduce competition within Alaska, but it would replace it with a company with deep pockets and a lot to lose for potential safety violations.

It would also make ALK a much more awkward company to digest should anyone else get hungry.
 
twinotter
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 1:03 am

SUNCTRY738 wrote:
How about a purchase of F9 and a building of another large hub in DEN? Gets rid of a no frills competitor and gives them a possible great hub in DEN if they can catch up to WN and overtake WN there.

Better yet, a buyout of WN.


Even better, maybe buy Delta.
 
wedgetail737
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 1:21 am

seabosdca wrote:
Clearly Delta is about to kick Alaska out of Seattle and Alaska is rudderless and flailing. :duck:

With that in mind, now that the financial impact of the merger seems to be in the past, I'd love to see the airline crack its wallet a bit for a couple of improvements. First, it seems like standards for cabin deep cleaning have gone downhill a bit lately. Maybe it's just bad luck, but I've been on a couple pretty new 739ERs lately that looked like no one had paid attention to bins, sidewalls, or ceiling panels in a while. Second, would it really kill the airline to include a few more fruit and cheese plates in the catering? Pretty much any time I'm seated behind the exits, there is zero chance of getting one if I didn't reserve in advance. Seems like revenue left on the table.


Your fruit and cheese plate issue is easily resolved if you pre-order it. It doesn't cost anything to reserve it.
 
speedbird52
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 1:31 am

Varsity1 wrote:
Wow!

Almost 15%(?) margins.

Isn't that pretty low compared to other industries? Genuinely curious, why do people get involved in the airline industry with such mediocre margins?
 
lavalampluva
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 2:53 am

I dunno how good it is, but it seems like AS is trimming routes on a pretty regular basis.
Remind me to send a thank you note to Mr. Boeing.
 
EIPremier
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 3:03 am

They mention ten airbus lease returns in the earnings call but I didn't catch them say which planes. Presumably the 321neos are here to stay, so I'm guessing 319s, but maybe is 319 and 320s?
 
HPRamper
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 9:10 am

speedbird52 wrote:
Varsity1 wrote:
Wow!

Almost 15%(?) margins.

Isn't that pretty low compared to other industries? Genuinely curious, why do people get involved in the airline industry with such mediocre margins?

15% is above average for any industry. 10%ish is average overall. Some industries would kill for even a consistent 5% profit margin. I recall something about a supermarket being considered successful if it cleared 1% margins.
 
SUNCTRY738
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 12:48 pm

Not wanting to hijack the thread and take away from AS's excellent performance, but if they purchased HA wouldn't it be an easy way to both acquire WB aircraft and some INTL routes? They could launch some Asian routes from SEA and PDX with HA's 789's.

Again, well done AS employees and AS management on a job well done.
 
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NameOmitted
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 4:58 pm

HPRamper wrote:
speedbird52 wrote:
Varsity1 wrote:
Wow!

Almost 15%(?) margins.

Isn't that pretty low compared to other industries? Genuinely curious, why do people get involved in the airline industry with such mediocre margins?

15% is above average for any industry. 10%ish is average overall. Some industries would kill for even a consistent 5% profit margin. I recall something about a supermarket being considered successful if it cleared 1% margins.

Further, any industry with a 15% average margin is a sign of a broken market In need of disruption.
 
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lightsaber
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 6:22 pm

EA CO AS wrote:
LAXBUR wrote:
This will really upset those trying to push the narrative Alaska is struggling and that they don’t know what they’re doing.


Especially when they realize that by the end of December AS will have paid off 75% of the $2B that was borrowed to purchase VX.

Let me be the first to admit I thought that much debt was trouble for AS. WoW. I might have been wrong. ;)

Lightsaber
Winter is coming.
 
Bluewho
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 9:11 pm

werdywerd wrote:
EA CO AS wrote:
LAXBUR wrote:
This will really upset those trying to push the narrative Alaska is struggling and that they don’t know what they’re doing.


Especially when they realize that by the end of December AS will have paid off 75% of the $2B that was borrowed to purchase VX.


And gets them even closer to 100% Paid off and moving on to the the B6 Acquisition.

When I worked at AS (Corporate side) for the short time I was there, they estimated making a push for B6 between 2021 and 2023. Let's see if it really happens.




Hmmmmm

Interesting post.
 
MIflyer12
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 9:41 pm

They've paid off much of the debt but haven't really shown that the acquisition is accretive to earnings. That means it was $2.6 Billion they could have spent on something, that, you know, makes money.

Earnings per share, basic:

2014, $4.42
2015, $6.61
2016, $6.59 (merger April 2016)
2017, $7.79
2018 $3.52
2019 thru 3 quarters, ~$4.80
 
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DL747400
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 9:43 pm

LAXBUR wrote:
This will really upset those trying to push the narrative Alaska is struggling and that they don’t know what they’re doing.


Not realty. Q3 is arguably the best quarter of the year in terms of revenues for all airlines in the northern hemisphere.
From First to Worst: The history of Airliners.net.

All posts reflect my opinions, not those of my employer or any other company.
 
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EA CO AS
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 9:56 pm

DL747400 wrote:
LAXBUR wrote:
This will really upset those trying to push the narrative Alaska is struggling and that they don’t know what they’re doing.


Not realty. Q3 is arguably the best quarter of the year in terms of revenues for all airlines in the northern hemisphere.


And yet, the Q3 profit is up 35% YOY.

Try again.
"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
 
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EA CO AS
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 10:00 pm

werdywerd wrote:
EA CO AS wrote:
LAXBUR wrote:
This will really upset those trying to push the narrative Alaska is struggling and that they don’t know what they’re doing.


Especially when they realize that by the end of December AS will have paid off 75% of the $2B that was borrowed to purchase VX.


And gets them even closer to 100% Paid off and moving on to the the B6 Acquisition.

When I worked at AS (Corporate side) for the short time I was there, they estimated making a push for B6 between 2021 and 2023. Let's see if it really happens.


I'm not sure that's in the cards at this point. They're still finalizing the 5 year plan, but the high-level info on it so far is expect to see organic growth of around 10-15 airframes per year. Not saying M&A is completely out, but it's certainly not something being actively discussed, whereas in the months leading up to the VX acquisition, there had been a lot of discussion about M&A, particularly looking at HA and SY.
"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
 
Varsity1
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Re: Alaska Air announces Q3 2019 results

Sat Oct 26, 2019 10:18 pm

I think NK would be a more attractive bu than B6. They have an east coast presence and the stock has been hammered lately.
 
vadodara
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Re: Alaska Air announces Q3 2019 results

Sun Oct 27, 2019 2:37 am

EA CO AS wrote:
I'm not sure that's in the cards at this point. They're still finalizing the 5 year plan, but the high-level info on it so far is expect to see organic growth of around 10-15 airframes per year. Not saying M&A is completely out, but it's certainly not something being actively discussed, whereas in the months leading up to the VX acquisition, there had been a lot of discussion about M&A, particularly looking at HA and SY.


AS has stayed away from expanding to even cities like PHX and DEN. Any word when that is likely to change?
 
abrelosojos
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Re: Alaska Air announces Q3 2019 results

Sun Oct 27, 2019 1:56 pm

Impressive job. I keep being impressed by this airline's resilience, especially after Delta has tried so hard to crush it.

Saludos,
Alex
Live, and let live.
 
Abeam79
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Re: Alaska Air announces Q3 2019 results

Sun Oct 27, 2019 5:31 pm

I love how the 2 airlines delta has been trying to hammer in their respect hubs, AS/B6, both have reported solid earnings and revenue growth and been thriving while delta has had cost go up significantly. Albeit a good quarter for delta, but not the trending pace of AS/B6.
Also those think that as will “acquire” B6 just cause the they are laying down the vx debt, doesn’t mean they are laying down the original debt they had. B6’s books still is solid and more so unencumbered with total debt. Plus B6’s assets are way more expensive than AS. If anything I can see a merger if it comes to any type of joining forces. And I doubt AS name will stay. Too regional focused if a combined network shows intercontinental travel span. Doesn’t work well. Also take note every time in aviation history there was a merger where one airline had a regional name, that was the one that disappeared. WN was an acquisition, not merger, so that’s not counted. (Northwest, America west, western, Reno air, PSA, ETC)
 
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NameOmitted
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Re: Alaska Air announces Q3 2019 results

Sun Oct 27, 2019 8:01 pm

Abeam79 wrote:
I love how the 2 airlines delta has been trying to hammer in their respect hubs, AS/B6, both have reported solid earnings and revenue growth and been thriving while delta has had cost go up significantly. Albeit a good quarter for delta, but not the trending pace of AS/B6.
Also those think that as will “acquire” B6 just cause the they are laying down the vx debt, doesn’t mean they are laying down the original debt they had. B6’s books still is solid and more so unencumbered with total debt. Plus B6’s assets are way more expensive than AS. If anything I can see a merger if it comes to any type of joining forces. And I doubt AS name will stay. Too regional focused if a combined network shows intercontinental travel span. Doesn’t work well. Also take note every time in aviation history there was a merger where one airline had a regional name, that was the one that disappeared. WN was an acquisition, not merger, so that’s not counted. (Northwest, America west, western, Reno air, PSA, ETC)

Wow! A "greatest hits" post.

Now, let's talk regional names.

American Airlines: a global airline named for a region.
Delta: a global airline named for a much smaller region.
I'll give you Lufthansa, they don't use the "Deutsche" in their official name, but Air France and Southwest are both on the top 10 by passengers flown.

Holland America Line is based out of Seattle, and holds a large market share in Alaska Cruises, Norwegian Cruise Line owns Hawaiian cruises, and Burlington Northern Santa Fe owns freight in the midwest, despite being far from Burlington or Santa Fe.

Regional names are not a hindrance in an industry that spans regions. What is important is brand recognition, and when you add up all the organizations that sell Alaska, the airline piggybacks on hundreds of millions in advertising every year.
 
durangomac
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Re: Alaska Air announces Q3 2019 results

Mon Oct 28, 2019 12:35 am

vadodara wrote:
EA CO AS wrote:
I'm not sure that's in the cards at this point. They're still finalizing the 5 year plan, but the high-level info on it so far is expect to see organic growth of around 10-15 airframes per year. Not saying M&A is completely out, but it's certainly not something being actively discussed, whereas in the months leading up to the VX acquisition, there had been a lot of discussion about M&A, particularly looking at HA and SY.


AS has stayed away from expanding to even cities like PHX and DEN. Any word when that is likely to change?



A year or two ago the thinking was that there were two issues for AS to expand in DEN. One being gate space or space in general was at a premium, I think this one is still an issue. The second issue is that DEN from most of AS's hubs is already highly covered. I doubt that we'll see much of an increase from AS until one or more of the other airlines drops markets from AS's hubs to DEN. There is just too much capacity and was driving the yield down to a level that didn't make sense for AS to have much more than they have now.
 
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RWA380
Posts: 5746
Joined: Fri Feb 18, 2005 10:51 am

Re: Alaska Air announces Q3 2019 results

Mon Oct 28, 2019 1:27 am

EA CO AS wrote:
LAXBUR wrote:
This will really upset those trying to push the narrative Alaska is struggling and that they don’t know what they’re doing.


Especially when they realize that by the end of December AS will have paid off 75% of the $2B that was borrowed to purchase VX.


This IS the difference. Comparing the already exceptional returns out of AS (a private victory for me) & the fact they have unloaded almost half of the debt created by the VX acquisition means once that debt is gone, we will be seeing larger returns, given the continually conservative AS a faster path to acquisition of another carrier & B6 makes the most sense. But lets hope the AS brand keeps expanding from NYC & BOS.
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Sydscott
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Joined: Thu Oct 30, 2003 11:50 am

Re: Alaska Air announces Q3 2019 results

Mon Oct 28, 2019 1:51 am

durangomac wrote:
vadodara wrote:
EA CO AS wrote:
I'm not sure that's in the cards at this point. They're still finalizing the 5 year plan, but the high-level info on it so far is expect to see organic growth of around 10-15 airframes per year. Not saying M&A is completely out, but it's certainly not something being actively discussed, whereas in the months leading up to the VX acquisition, there had been a lot of discussion about M&A, particularly looking at HA and SY.


AS has stayed away from expanding to even cities like PHX and DEN. Any word when that is likely to change?



A year or two ago the thinking was that there were two issues for AS to expand in DEN. One being gate space or space in general was at a premium, I think this one is still an issue. The second issue is that DEN from most of AS's hubs is already highly covered. I doubt that we'll see much of an increase from AS until one or more of the other airlines drops markets from AS's hubs to DEN. There is just too much capacity and was driving the yield down to a level that didn't make sense for AS to have much more than they have now.


I think that's where the idea of an acquisition of F9 comes into play. Like the VX acquisition it would largely be a real estate transaction to get them gates and routes as opposed to them wanting the airline that comes with it but the advantages of that for AS would be:

1) 3 DCA perimeter slot exemptions. So they would have LAX/SFO/PDX/SEA/DEN to DCA. That's a pretty powerful combination when travelling to the West Coast;
2) It gives them more LGA slots and an airport that they can use them with. So it makes AS that much more relevant in the New York area along with their operations at JFK and EWR;
3) It gives them a potential significant hub away from the West Coast in DEN to funnel traffic through;
4) If you look at F9's historic route map out of DEN there are plenty of opportunities away from WN to be expanded into;
5) Those A321NEO's can be used for DEN-Hawaii services;
6) F9 currently has 5 flights a day out of SLC so in an airport which is gate constrained it allows AS to grow;
7) I haven't even touched on the rest of F9's network.

Overall a great quarter for AS finance wise and hopefully the recent network re-structuring improves returns even further.
 
jbpdx
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Re: Alaska Air announces Q3 2019 results

Mon Oct 28, 2019 2:12 am

1) 3 DCA perimeter slot exemptions. So they would have LAX/SFO/PDX/SEA/DEN to DCA. That's a pretty powerful combination when travelling to the West Coast;


Alaska already flies to DCA from PDX, SEA, SFO and LAX.
^
 
vadodara
Posts: 1146
Joined: Mon Feb 20, 2017 7:45 pm

Re: Alaska Air announces Q3 2019 results

Mon Oct 28, 2019 3:14 am

RWA380 wrote:
. But lets hope the AS brand keeps expanding from NYC & BOS.


LGA is/will be a challenge. Even VX with its routes to DAL didn’t find traction. Perhaps B6 with its strong footprint along eastern seaboard is the answer.
 
Sydscott
Posts: 3513
Joined: Thu Oct 30, 2003 11:50 am

Re: Alaska Air announces Q3 2019 results

Mon Oct 28, 2019 3:38 am

jbpdx wrote:
1) 3 DCA perimeter slot exemptions. So they would have LAX/SFO/PDX/SEA/DEN to DCA. That's a pretty powerful combination when travelling to the West Coast;


Alaska already flies to DCA from PDX, SEA, SFO and LAX.


Yeah they get 3 more of them to fly DEN-DCA. So to DCA on AS you would have 1 x LAX, 1 x SFO, 1 x PDX, 2 x SEA and 3 x DEN. So 5 flights becomes 8.
 
ericm2031
Posts: 1412
Joined: Tue Jun 19, 2012 8:46 am

Re: Alaska Air announces Q3 2019 results

Mon Oct 28, 2019 4:21 am

DL747400 wrote:
LAXBUR wrote:
This will really upset those trying to push the narrative Alaska is struggling and that they don’t know what they’re doing.


Not realty. Q3 is arguably the best quarter of the year in terms of revenues for all airlines in the northern hemisphere.


It was even mentioned internally that the high margin was due to Q3 being a peak quarter for AS, while Q2 is typically peak for everyone else.
 
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airportugal310
Posts: 3673
Joined: Sun Apr 11, 2004 12:49 pm

Re: Alaska Air announces Q3 2019 results

Mon Oct 28, 2019 5:05 am

Sydscott wrote:
durangomac wrote:
vadodara wrote:

AS has stayed away from expanding to even cities like PHX and DEN. Any word when that is likely to change?



A year or two ago the thinking was that there were two issues for AS to expand in DEN. One being gate space or space in general was at a premium, I think this one is still an issue. The second issue is that DEN from most of AS's hubs is already highly covered. I doubt that we'll see much of an increase from AS until one or more of the other airlines drops markets from AS's hubs to DEN. There is just too much capacity and was driving the yield down to a level that didn't make sense for AS to have much more than they have now.


I think that's where the idea of an acquisition of F9 comes into play. Like the VX acquisition it would largely be a real estate transaction to get them gates and routes as opposed to them wanting the airline that comes with it but the advantages of that for AS would be:

1) 3 DCA perimeter slot exemptions. So they would have LAX/SFO/PDX/SEA/DEN to DCA. That's a pretty powerful combination when travelling to the West Coast;
2) It gives them more LGA slots and an airport that they can use them with. So it makes AS that much more relevant in the New York area along with their operations at JFK and EWR;
3) It gives them a potential significant hub away from the West Coast in DEN to funnel traffic through;
4) If you look at F9's historic route map out of DEN there are plenty of opportunities away from WN to be expanded into;
5) Those A321NEO's can be used for DEN-Hawaii services;
6) F9 currently has 5 flights a day out of SLC so in an airport which is gate constrained it allows AS to grow;
7) I haven't even touched on the rest of F9's network.

Overall a great quarter for AS finance wise and hopefully the recent network re-structuring improves returns even further.


You would see Hawaiian enter Hawaii-DEN with their 321N before Frontier does, and the fact that they haven’t tells you a lot
“They bought their tickets, they knew what they were getting into. I say, let 'em crash.”
 
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RWA380
Posts: 5746
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Re: Alaska Air announces Q3 2019 results

Mon Oct 28, 2019 6:02 am

airportugal310 wrote:
Sydscott wrote:
durangomac wrote:


A year or two ago the thinking was that there were two issues for AS to expand in DEN. One being gate space or space in general was at a premium, I think this one is still an issue. The second issue is that DEN from most of AS's hubs is already highly covered. I doubt that we'll see much of an increase from AS until one or more of the other airlines drops markets from AS's hubs to DEN. There is just too much capacity and was driving the yield down to a level that didn't make sense for AS to have much more than they have now.


I think that's where the idea of an acquisition of F9 comes into play. Like the VX acquisition it would largely be a real estate transaction to get them gates and routes as opposed to them wanting the airline that comes with it but the advantages of that for AS would be:

1) 3 DCA perimeter slot exemptions. So they would have LAX/SFO/PDX/SEA/DEN to DCA. That's a pretty powerful combination when travelling to the West Coast;
2) It gives them more LGA slots and an airport that they can use them with. So it makes AS that much more relevant in the New York area along with their operations at JFK and EWR;
3) It gives them a potential significant hub away from the West Coast in DEN to funnel traffic through;
4) If you look at F9's historic route map out of DEN there are plenty of opportunities away from WN to be expanded into;
5) Those A321NEO's can be used for DEN-Hawaii services;
6) F9 currently has 5 flights a day out of SLC so in an airport which is gate constrained it allows AS to grow;
7) I haven't even touched on the rest of F9's network.

Overall a great quarter for AS finance wise and hopefully the recent network re-structuring improves returns even further.


You would see Hawaiian enter Hawaii-DEN with their 321N before Frontier does, and the fact that they haven’t tells you a lot


More than anything, it tells me that the 321neoxlr is not the right aircraft for Denver to Hawaii without a meaningful penalty. I think if anyone humps in to compete with UA, it'll be HA on the A-332 or 787.
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