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JammyBritton27
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Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 1:56 pm

Reported net loss of $232 million, or $1.87 per diluted share, compared to net income of $4 million, or $0.03 per diluted share in the first quarter of 2019.

https://news.alphastreet.com/alaska-air ... fographic/

“The impacts of COVID-19 on our business have been unprecedented. Demand deterioration began in February, and in March cancellations overwhelmed new bookings. Today demand remains over 90% below normal levels,” the company said in a statement.

https://investor.alaskaair.com/news-rel ... s-covid-19
 
hiflyeras
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 2:23 pm

Sad times indeed. AS has the advantage of a flexible fleet of Q400 to A321 and 737-9 to right-size routes. They have little exposure to cuts in international flying like the big 3. Hard to say if mid and transcon flights will return to past levels but, on the west coast from SAN to ANC, AS will always top dog.
 
phxa340
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 2:34 pm

hiflyeras wrote:
Sad times indeed. AS has the advantage of a flexible fleet of Q400 to A321 and 737-9 to right-size routes. They have little exposure to cuts in international flying like the big 3. Hard to say if mid and transcon flights will return to past levels but, on the west coast from SAN to ANC, AS will always top dog.


I think WN would dispute that last sentence ...
 
MIflyer12
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 2:39 pm

The 8-K filing is very short on detail of the $160 million in impairment charges.

Reported impairment and other related charges of $160 million before tax related to certain aircraft, aircraft parts, and intangible assets.
 
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NWAESC
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 2:56 pm

hiflyeras wrote:
I think WN would dispute that last sentence ...


Depends on which end of I-5 you live on...
"Nothing ever happens here, " I said. "I just wait."
 
dca1
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 3:06 pm

Merger ahead for AS?
 
MR27122
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 3:12 pm

NWAESC wrote:
hiflyeras wrote:
I think WN would dispute that last sentence ...


Depends on which end of I-5 you live on...


+1...bravo!!!
 
tphuang
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 3:22 pm

well, if you are a AS fan and want to be optimistic, here is something that will cheer you on

Cash Preservation and Expense Reduction

Held $2.1 billion in unrestricted cash and marketable securities as of March 31, 2020.
As of May 4, 2020, held $2.9 billion in cash and marketable securities, including Coronavirus Aid, Relief and Economic Security (CARES) Act Payroll Support Program (PSP) funds received in April.
Drew $400 million from existing credit facilities, and executed an agreement for a $425 million 364-day term loan facility.
Obtained an additional $50 million in secured financing on April 22, 2020.
Enacted a company-wide hiring freeze for all non-essential positions, reduced salaries of senior management and offered voluntary short-term and incentive leave programs accepted by more than 5,000 employees.
Reduced cash burn from $400 million per month in March to $260 million in April, with the goal of reaching $200 million in June.
Suspended over $500 million in capital spending, largely through the deferral of pre-delivery aircraft payments and non-aircraft capital projects.
Negotiated payment extensions or reductions with lessors, vendors and airports.
Suspended stock repurchases and future dividend payments.

so cash burn was at $13 million a day and then became around $9 million a day in April and $7 million by June. That seems like pretty good numbers. Even in the worst case where demand doesn't come back soon, burning $200 million a month with their current cash flown will allow them to get through another year with enough cash on hand to survive. They are in no danger of BK.

Put things into comparison:
AA is burning $70 million a day for Q2 and hope to get it down to $50 million a day per end of Q2
DL is going from $100 million a day at start of Q2 to $50 million a day by second half of Q2
UA is apparently going to burn $40 to $45 million a day in Q2
WN is at $30 to 35 million a day in Q2

Given the ratio of costs at the start of this, AS is cutting a large portion of its costs than any of the other reported carriers so far.
So I would say that's a pretty good job.
 
Cointrin330
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 3:22 pm

dca1 wrote:
Merger ahead for AS?


Down the road, quite possibly yes. AA.
 
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DL747400
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 3:22 pm

phxa340 wrote:
hiflyeras wrote:
Sad times indeed. AS has the advantage of a flexible fleet of Q400 to A321 and 737-9 to right-size routes. They have little exposure to cuts in international flying like the big 3. Hard to say if mid and transcon flights will return to past levels but, on the west coast from SAN to ANC, AS will always top dog.


I think WN would dispute that last sentence ...


Agreed. Many people would dispute that statement, but it conflicts with the " AS is great" agenda. The real story is: AS lost $$$, they are fighting for their very existence and their survival is in question, just like everyone else.
From First to Worst: The history of Airliners.net.

All posts reflect my opinions, not those of my employer or any other company.
 
kiowa
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 3:27 pm

DL747400 wrote:
phxa340 wrote:
hiflyeras wrote:
Sad times indeed. AS has the advantage of a flexible fleet of Q400 to A321 and 737-9 to right-size routes. They have little exposure to cuts in international flying like the big 3. Hard to say if mid and transcon flights will return to past levels but, on the west coast from SAN to ANC, AS will always top dog.


I think WN would dispute that last sentence ...


Agreed. Many people would dispute that statement, but it conflicts with the " AS is great" agenda. The real story is: AS lost $$$, they are fighting for their very existence and their survival is in question, just like everyone else.



very true----
 
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DL747400
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 3:31 pm

dca1 wrote:
Merger ahead for AS?


A merger is probably coming for just about every large US carrier, but only after the immediate crisis subsides. Right now, everyone is primarily focused on survival, with a secondary focus on trying to figure out what the future looks like in terms of demand, revenue, product and network.
From First to Worst: The history of Airliners.net.

All posts reflect my opinions, not those of my employer or any other company.
 
DLASFlyer
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 4:27 pm

Per the earnings call, A319s and some A320s are done. 240 Airbus pilots will be transitioned to Boeing aircraft.

Beginning of the end for Airbus at AS.
 
gmcc
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 4:50 pm

DLASFlyer wrote:
Per the earnings call, A319s and some A320s are done. 240 Airbus pilots will be transitioned to Boeing aircraft.

Beginning of the end for Airbus at AS.


Only if Boeing can get the MAX off the ground again. Still not a certain thing. In the end being higher cost leases the 319s and 320 don't give AS anything it doesn't already have in an owned plane. The 321neos still might have a future though because they bring something to the table that AS didn't have before.
 
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NameOmitted
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 5:51 pm

How did a thread about a quarterly report stating that AS has the reserves to survive more then a year without an improvement in the present situation shift so quickly to merger assumptions? Are people thinking that AS is daft enougufh to be wanting to buy?
 
tphuang
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 5:53 pm

NameOmitted wrote:
How did a thread about a quarterly report stating that AS has the reserves to survive more then a year without an improvement in the present situation shift so quickly to merger assumptions? Are people thinking that AS is daft enougufh to be wanting to buy?

well, there will be mergers, just a matter of who. WN is amassing a huge war chest. Much more than what's needed to avoid chapter 11. They are looking to acquire someone on the cheap.
 
ShinyAndChrome
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 6:04 pm

NameOmitted wrote:
How did a thread about a quarterly report stating that AS has the reserves to survive more then a year without an improvement in the present situation shift so quickly to merger assumptions? Are people thinking that AS is daft enougufh to be wanting to buy?


To be fair, it's not like it takes that much to tip this place into merger speculation and that's when things are normal.
 
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DBCoop3r
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 6:27 pm

DLASFlyer wrote:
Per the earnings call, A319s and some A320s are done. 240 Airbus pilots will be transitioned to Boeing aircraft.

Beginning of the end for Airbus at AS.

I don't believe so. They have 30 A321NEOs on order and I bet they take all of them. It's a good plane for them on a lot of routes (as it is for basically every airline.) After that, I bet all their orders are back with Boeing.

I think AS is one of the safest bets to survive, they have been one of the best performing airlines financially for years and are still have better cash reserves than most. Their VX merger is complete and paid for and they had a great quarter before this one. Yes they still do face a difficult future as all do, it's quite apparent that DL will always be there waiting for them to show weakness.

AA is in no shape to merge with anyone right now, so they will be quite happy to welcome AS to OW as a partner.
 
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DBCoop3r
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 6:34 pm

tphuang wrote:
NameOmitted wrote:
How did a thread about a quarterly report stating that AS has the reserves to survive more then a year without an improvement in the present situation shift so quickly to merger assumptions? Are people thinking that AS is daft enougufh to be wanting to buy?

well, there will be mergers, just a matter of who. WN is amassing a huge war chest. Much more than what's needed to avoid chapter 11. They are looking to acquire someone on the cheap.


It's funny though, AS seems to always be the target for speculative mergers on here but they consistently perform better than nearly every other airline. So why would they ever vote to merge with anyone when they are perfectly capable of making more money being independent? If they merge with anyone, it will be them taking over a smaller airline with less financial clout like B6.
 
tphuang
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 6:37 pm

DBCoop3r wrote:
tphuang wrote:
NameOmitted wrote:
How did a thread about a quarterly report stating that AS has the reserves to survive more then a year without an improvement in the present situation shift so quickly to merger assumptions? Are people thinking that AS is daft enougufh to be wanting to buy?

well, there will be mergers, just a matter of who. WN is amassing a huge war chest. Much more than what's needed to avoid chapter 11. They are looking to acquire someone on the cheap.


It's funny though, AS seems to always be the target for mergers on here but they consistently perform better than nearly every other airline. So why would they every vote to merge with anyone when they are perfectly capable of making more money being independent? If they merge with anyone, it will be them taking over a smaller airline with less financial clout like B6.


If AS is so great, then even more reason to merge with AS. Right now, AS, B6, NK and HA are also acquisition targets for WN. I'd say NK is most likely, but it all depends on the financial situation of eahc airline. The more money AS has at the end, the better position it would be at being the aggressor in mergers rather than the one taken over.
 
DLASFlyer
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 6:55 pm

DBCoop3r wrote:
DLASFlyer wrote:
Per the earnings call, A319s and some A320s are done. 240 Airbus pilots will be transitioned to Boeing aircraft.

Beginning of the end for Airbus at AS.

I don't believe so. They have 30 A321NEOs on order and I bet they take all of them. It's a good plane for them on a lot of routes (as it is for basically every airline.) After that, I bet all their orders are back with Boeing.


Listen to the call. Execs said they like the A321neo but it's a small fleet and they have no more on order. There was no mention of the 30 A320neo order but a lot of talk about cutting costs, particularly the cost of running two fleets. They said the MAX will offer a flexible growth option. Read the tea leaves.
 
ericm2031
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 7:03 pm

The loss looks a little big in comparison to DL and WN, I'm guessing it has to do with WA being a hotspot, CA almost on lockdown and probably little demand for its JFK transcons...that's most of their revenue except for maybe PDX.
 
32andBelow
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 7:31 pm

tphuang wrote:
DBCoop3r wrote:
tphuang wrote:
well, there will be mergers, just a matter of who. WN is amassing a huge war chest. Much more than what's needed to avoid chapter 11. They are looking to acquire someone on the cheap.


It's funny though, AS seems to always be the target for mergers on here but they consistently perform better than nearly every other airline. So why would they every vote to merge with anyone when they are perfectly capable of making more money being independent? If they merge with anyone, it will be them taking over a smaller airline with less financial clout like B6.


If AS is so great, then even more reason to merge with AS. Right now, AS, B6, NK and HA are also acquisition targets for WN. I'd say NK is most likely, but it all depends on the financial situation of eahc airline. The more money AS has at the end, the better position it would be at being the aggressor in mergers rather than the one taken over.

Why would any airline need to merge when they all have more airplanes than they know why to do with for the foreseeable future.
 
CLJFlyer
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 7:45 pm

Cointrin330 wrote:
dca1 wrote:
Merger ahead for AS?


Down the road, quite possibly yes. AA.


I booked a flight from CVG-ORD-SEA on Alaska.com, CVG-ORD was with AA. Today, 5 days before my flight, AA randomly cancelled my CVG-ORD leg, even though they are still flying the leg. Same exact flight time and flight number.

I'm not sure why they basically kicked me off the flight and neither did the AS rep. I had to cancel my flight and booked with Delta.

I hope AA and AS don't merge. AS is a much better airline.
 
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NameOmitted
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 7:46 pm

Before this hit, AS Cargo was talking about wanting a 738 once the MAXes were flying again, reducing the demand for passenger 738s in the fleet.

Now that AS is flying 739s as bulk loaded freighters, has anyone heard anything about whether AS Cargo is going to get their wish? There is a reasonable chance that the Max will be flying before demand the 738 fleet is restored.
 
Pi7472000
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 7:47 pm

Why would AA want to merge with AS? Just gives them more planes and another hub they do not need. American does not need to be in every part of the country and SEA is being hit hard by the virus. International out of SEA (and others) will not come back for years.
 
onwFan
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 7:53 pm

Cointrin330 wrote:
dca1 wrote:
Merger ahead for AS?


Down the road, quite possibly yes. AA.

Especially if at the end of the crisis, AA’s already marginal presence in the west coast is reduced to nothing. Also because AA/AS will badly need each each other if DL emerges the strongest.
Last edited by onwFan on Tue May 05, 2020 7:55 pm, edited 1 time in total.
 
DLASFlyer
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 7:53 pm

Pi7472000 wrote:
Why would AA want to merge with AS? Just gives them more planes and another hub they do not need. American does not need to be in every part of the country and SEA is being hit hard by the virus. International out of SEA (and others) will not come back for years.


As pointed out on the earnings call, AS is in a relatively strong position as far as airlines go. All narrow body fleet, mostly domestic routes, leisure focused with hubs in fast-growing parts of the country. Some of the best performing business customers are in Seattle (Amazon, Costco, Starbucks, Microsoft.)
 
gmcc
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 7:55 pm

tphuang wrote:
DBCoop3r wrote:
tphuang wrote:
well, there will be mergers, just a matter of who. WN is amassing a huge war chest. Much more than what's needed to avoid chapter 11. They are looking to acquire someone on the cheap.


It's funny though, AS seems to always be the target for mergers on here but they consistently perform better than nearly every other airline. So why would they every vote to merge with anyone when they are perfectly capable of making more money being independent? If they merge with anyone, it will be them taking over a smaller airline with less financial clout like B6.


If AS is so great, then even more reason to merge with AS. Right now, AS, B6, NK and HA are also acquisition targets for WN. I'd say NK is most likely, but it all depends on the financial situation of eahc airline. The more money AS has at the end, the better position it would be at being the aggressor in mergers rather than the one taken over.


AS is a rose with a thron as far as mergers go. The rose portion is a young fleet, real estate in constrained airports such as LAX and SFO and a strangle hold on the state of Alaska. That strangle hold on Alaska also happens to be the thron as it comes with a freight network and three dedicated freighter that I doubt any of the big 4 want to operate. Any talk of divestment of the freight network would get the state of Alaska involved to preserve vital connections.

If the executives can get to a neutral cash burn position by the 4th quarter as is the stated goal from the call most merger talk with be just talk at that point.
 
tphuang
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 8:17 pm

gmcc wrote:
tphuang wrote:
DBCoop3r wrote:

It's funny though, AS seems to always be the target for mergers on here but they consistently perform better than nearly every other airline. So why would they every vote to merge with anyone when they are perfectly capable of making more money being independent? If they merge with anyone, it will be them taking over a smaller airline with less financial clout like B6.


If AS is so great, then even more reason to merge with AS. Right now, AS, B6, NK and HA are also acquisition targets for WN. I'd say NK is most likely, but it all depends on the financial situation of eahc airline. The more money AS has at the end, the better position it would be at being the aggressor in mergers rather than the one taken over.


AS is a rose with a thron as far as mergers go. The rose portion is a young fleet, real estate in constrained airports such as LAX and SFO and a strangle hold on the state of Alaska. That strangle hold on Alaska also happens to be the thron as it comes with a freight network and three dedicated freighter that I doubt any of the big 4 want to operate. Any talk of divestment of the freight network would get the state of Alaska involved to preserve vital connections.

If the executives can get to a neutral cash burn position by the 4th quarter as is the stated goal from the call most merger talk with be just talk at that point.


As would have to fire a lot of people to be cash neutral by Q4.
 
VS11
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 8:47 pm

32andBelow wrote:
tphuang wrote:
DBCoop3r wrote:

It's funny though, AS seems to always be the target for mergers on here but they consistently perform better than nearly every other airline. So why would they every vote to merge with anyone when they are perfectly capable of making more money being independent? If they merge with anyone, it will be them taking over a smaller airline with less financial clout like B6.


If AS is so great, then even more reason to merge with AS. Right now, AS, B6, NK and HA are also acquisition targets for WN. I'd say NK is most likely, but it all depends on the financial situation of eahc airline. The more money AS has at the end, the better position it would be at being the aggressor in mergers rather than the one taken over.

Why would any airline need to merge when they all have more airplanes than they know why to do with for the foreseeable future.


Agreed. Airlines will be receding to their backyards where they have relative strength. DL most likely will step back from Seattle and Boston giving more breathing room for AS and B6.
 
ScottB
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 8:48 pm

tphuang wrote:
If AS is so great, then even more reason to merge with AS. Right now, AS, B6, NK and HA are also acquisition targets for WN. I'd say NK is most likely, but it all depends on the financial situation of eahc airline. The more money AS has at the end, the better position it would be at being the aggressor in mergers rather than the one taken over.


WN won't merge with NK simply because NK brings nothing strategic to the table. FL had 20+ gates at ATL as well as a decent portfolio of slots at DCA and LGA. HA is a poor match operationally. The best merger target for WN is B6 -- not for the fleet, but for the market presence and real estate/slots in NYC and BOS. AS is somewhat less ideal but it would cement WN's dominance in the west.

But AS may be in position to acquire as we recover from this crisis. It's good to see they've got the cash burn fairly low for their size coupled with a strong cash hoard.
 
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DBCoop3r
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 8:56 pm

VS11 wrote:
32andBelow wrote:
tphuang wrote:

If AS is so great, then even more reason to merge with AS. Right now, AS, B6, NK and HA are also acquisition targets for WN. I'd say NK is most likely, but it all depends on the financial situation of eahc airline. The more money AS has at the end, the better position it would be at being the aggressor in mergers rather than the one taken over.

Why would any airline need to merge when they all have more airplanes than they know why to do with for the foreseeable future.


Agreed. Airlines will be receding to their backyards where they have relative strength. DL most likely will step back from Seattle and Boston giving more breathing room for AS and B6.


DLs plans for both SEA and BOS are quite clear already: the are preserving their hub in SEA and regressing in BOS. Whether BOS stays as a focus city is unclear, but they are clearly keeping SEA as a hub.
 
tphuang
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 9:07 pm

ScottB wrote:
tphuang wrote:
If AS is so great, then even more reason to merge with AS. Right now, AS, B6, NK and HA are also acquisition targets for WN. I'd say NK is most likely, but it all depends on the financial situation of eahc airline. The more money AS has at the end, the better position it would be at being the aggressor in mergers rather than the one taken over.


WN won't merge with NK simply because NK brings nothing strategic to the table. FL had 20+ gates at ATL as well as a decent portfolio of slots at DCA and LGA. HA is a poor match operationally. The best merger target for WN is B6 -- not for the fleet, but for the market presence and real estate/slots in NYC and BOS. AS is somewhat less ideal but it would cement WN's dominance in the west.

But AS may be in position to acquire as we recover from this crisis. It's good to see they've got the cash burn fairly low for their size coupled with a strong cash hoard.


elimination of competition!

prior to coronavirus, NK was the biggest thorn for WN. It posed far greater threat to WN yield than B6 or AS, who just want to strengthen their backyard. It's not hard to see how NK might come out of this stronger than before and challenge WN's expansion plans.

Either way, WN has big plans with all that cash.

VS11 wrote:
Agreed. Airlines will be receding to their backyards where they have relative strength. DL most likely will step back from Seattle and Boston giving more breathing room for AS and B6.

The biggest challenge to AS appears to be that DL is not fading out of SEA. They are treating SEA even more importantly than LAX. That alone will make this Q4 cash neutral dream quite unlikely.
 
VS11
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 9:28 pm

DBCoop3r wrote:
VS11 wrote:
32andBelow wrote:
Why would any airline need to merge when they all have more airplanes than they know why to do with for the foreseeable future.


Agreed. Airlines will be receding to their backyards where they have relative strength. DL most likely will step back from Seattle and Boston giving more breathing room for AS and B6.


DLs plans for both SEA and BOS are quite clear already: the are preserving their hub in SEA and regressing in BOS. Whether BOS stays as a focus city is unclear, but they are clearly keeping SEA as a hub.


tphuang wrote:
VS11 wrote:
Agreed. Airlines will be receding to their backyards where they have relative strength. DL most likely will step back from Seattle and Boston giving more breathing room for AS and B6.

The biggest challenge to AS appears to be that DL is not fading out of SEA. They are treating SEA even more importantly than LAX. That alone will make this Q4 cash neutral dream quite unlikely.


It all depends on how aggressive DL can be. I am sure DL will still be at both airports but there will be a limit to how many markets they can effectively compete.
 
F9Animal
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 11:38 pm

dca1 wrote:
Merger ahead for AS?


Doubtful. I think the last thing on any airline execs mind at this very moment is a merger. Especially since everyone is shrinking their size. Alaska is well positioned to come out of this, and return strong.
I Am A Different Animal!!
 
bfitzflyer
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Tue May 05, 2020 11:49 pm

Imagine airliners.net if DL acquired AS. The site might blow up.
 
rgreenftm
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Wed May 06, 2020 12:59 am

F9Animal wrote:
dca1 wrote:
Merger ahead for AS?


Doubtful. I think the last thing on any airline execs mind at this very moment is a merger. Especially since everyone is shrinking their size. Alaska is well positioned to come out of this, and return strong.


Why does everyone seem to think that growth is only possible through a merger? I think once this passes, its very likely AS may opt to grow organically in markets vacated by others. They've been reasonably successful in growing organically from the west coast, and arguably less successful in their merger with VX to obtain growth. I could see them growing existing stations further, and over the next 5-10 years turning a station into a focus city or hub. Ideally east of the Rockies.
 
umichman
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Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Wed May 06, 2020 1:55 am

32andBelow wrote:
Why would any airline need to merge when they all have more airplanes than they know why to do with for the foreseeable future.


It's not like mergers can only be about one thing. In this case, it'd be about increasing combined marketshare and reducing competition in a marketplace where there are suddenly far fewer customers. If the current situation persists over a longer period, it seems likely the airlines which retain hub-and-spoke networks are better positioned than those who are more focused on O&D traffic (like B6 and AS). If the longer and thiner O&D routes can only fill 20 - 30% of your seats, it's hard to imagine that being a successful business plan long term. An airline which offers hub-and-spoke connectivity should be better able to fill seats since they are not so dependent on the O&D demand between any two markets. Of course there's still a fair amount of uncertainty at this point and it will likely take several more months to see if what is happening now may last for a substantially longer term, or if demand and the economy shows signs of bouncing back strongly. AS may be better positioned than B6 with it's entry into Oneworld and the ability to leverage AA's network for connectivity.
 
danipawa
Posts: 432
Joined: Sat Oct 01, 2016 1:18 am

Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Wed May 06, 2020 2:36 am

DLASFlyer wrote:
Per the earnings call, A319s and some A320s are done. 240 Airbus pilots will be transitioned to Boeing aircraft.

Beginning of the end for Airbus at AS.


Saw rumors about AA getting the A319 fleet (10)
 
FSDan
Posts: 3279
Joined: Mon Jan 03, 2011 5:27 pm

Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Wed May 06, 2020 3:15 am

danipawa wrote:
DLASFlyer wrote:
Per the earnings call, A319s and some A320s are done. 240 Airbus pilots will be transitioned to Boeing aircraft.

Beginning of the end for Airbus at AS.


Saw rumors about AA getting the A319 fleet (10)


Were these rumors post-COVID? Because if not, don't put any stock in them now. AA might well have jumped at the opportunity to acquire some more second-hand 319s earlier this year, but as of now they're retiring aircraft left and right.
This is my signature until I think of a better one.
 
Abeam79
Posts: 325
Joined: Thu Jul 03, 2014 3:16 am

Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Wed May 06, 2020 4:08 am

DBCoop3r wrote:
tphuang wrote:
NameOmitted wrote:
How did a thread about a quarterly report stating that AS has the reserves to survive more then a year without an improvement in the present situation shift so quickly to merger assumptions? Are people thinking that AS is daft enougufh to be wanting to buy?

well, there will be mergers, just a matter of who. WN is amassing a huge war chest. Much more than what's needed to avoid chapter 11. They are looking to acquire someone on the cheap.


It's funny though, AS seems to always be the target for speculative mergers on here but they consistently perform better than nearly every other airline. So why would they ever vote to merge with anyone when they are perfectly capable of making more money being independent? If they merge with anyone, it will be them taking over a smaller airline with less financial clout like B6.

B6 won’t be taken over by wn, I keep saying this. WN already can’t hack their product in the northeast, then taking over B6 will just siphon their customers to delta and united. Not for nothing but people in the markets B6 serves really are loyal to B6, and wn is just plain crap in their view. No offense but I flew wn a few times and it was like comparing riding on the old 7 subway train vs B6 is like bring on the excela. If, and a big if wn attempts a bid, ua and dl with swoop in and outbid wn cause to them they would give better strategic importance to get a hold of B6. Especially ua with envious eyes on jfk. I think B6 will come out strong and be aggressive to expand to areas they had a hard time before. History shows B6 had been underestimated many times and the leadership knows very well when to take advantage of opportunities.
 
n7371f
Posts: 1802
Joined: Fri Jul 04, 2008 3:54 pm

Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Wed May 06, 2020 4:37 am

Flexible fleet?

21N/7M9 are same mission. AS needs a fleet of around 30 21N to make that sub-fleet of joysticks financially workable. Obviously market $ on 7M9.

Same can be said, mostly, for 320/738.

I'd watch the QX fleet. DH4 is a great plane for some of the PNW missions but it's pricey op costs might make it expendable.

hiflyeras wrote:
Sad times indeed. AS has the advantage of a flexible fleet of Q400 to A321 and 737-9 to right-size routes. They have little exposure to cuts in international flying like the big 3. Hard to say if mid and transcon flights will return to past levels but, on the west coast from SAN to ANC, AS will always top dog.
 
n7371f
Posts: 1802
Joined: Fri Jul 04, 2008 3:54 pm

Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Wed May 06, 2020 4:40 am

n7371f wrote:
Flexible fleet?

21N/7M9 are same mission. AS needs a fleet of around 30 21N to make that sub-fleet of joysticks financially workable. Obviously market $ on 7M9.

Same can be said, mostly, for 320/738.

I'd watch the QX fleet. DH4 is a great plane for some of the PNW missions but it's pricey op costs might make it expendable.

**AS not having an expansive international network will be its god send compared to DL, AA, UA. The major 3 cash burn has a lot tied up in international ops and assets.

hiflyeras wrote:
Sad times indeed. AS has the advantage of a flexible fleet of Q400 to A321 and 737-9 to right-size routes. They have little exposure to cuts in international flying like the big 3. Hard to say if mid and transcon flights will return to past levels but, on the west coast from SAN to ANC, AS will always top dog.
 
MAH4546
Posts: 26158
Joined: Wed Jan 24, 2001 1:44 pm

Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Wed May 06, 2020 6:52 am

F9Animal wrote:
dca1 wrote:
Merger ahead for AS?


Doubtful. I think the last thing on any airline execs mind at this very moment is a merger. Especially since everyone is shrinking their size. Alaska is well positioned to come out of this, and return strong.


Not only that, but DOJ won’t allow anymore mergers. There are too few airlines as is. The current crisis doesn’t change anything. There will be no mergers now or in the near future.
a.
 
JayinKitsap
Posts: 2167
Joined: Sat Nov 26, 2005 9:55 am

Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Wed May 06, 2020 8:04 am

AS's lock on Alaska means its the mistress for many airlines. Flights SEA, HNL, and PDX to Alaska connecting to both the likes of United as well as the international flights. Normal summers they are going crazy into Alaska, COVID has killed this years Cruise and vacation season. SEA with them is an O&D hub, non-stops to the whole US, often they have either the only or the majority of non-stops to the East Coast.

I hope they don't buy, merge, or get bought in the next decade.
 
ScottB
Posts: 6923
Joined: Fri Jul 28, 2000 1:25 am

Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Wed May 06, 2020 5:42 pm

F9Animal wrote:
I think the last thing on any airline execs mind at this very moment is a merger. Especially since everyone is shrinking their size.


Oh, you'd better believe that some carriers are making plans with future mergers & acquisitions in mind. That may not be their first or second priority right now, but it's absolutely under consideration. If you're LUV or ALK, buying JBLU becomes a lot easier when the market price is $8 vs. $20 -- it just depends on the size of the company's war chest and projections for the business.

MAH4546 wrote:
DOJ won’t allow anymore mergers. There are too few airlines as is.


That's not entirely clear. Depending on the length of this crisis and how much traffic recovers, carriers may be able to make the case that consolidation will be necessary for survival.

Abeam79 wrote:
B6 won’t be taken over by wn, I keep saying this. WN already can’t hack their product in the northeast, then taking over B6 will just siphon their customers to delta and united. Not for nothing but people in the markets B6 serves really are loyal to B6, and wn is just plain crap in their view.


Sure, so that explains why WN became the largest carrier in Washington/Baltimore by a few million passengers a year. And product matters less than price, schedule, and network.
 
DLASFlyer
Posts: 121
Joined: Wed Jun 15, 2016 4:06 pm

Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Wed May 06, 2020 5:56 pm

MAH4546 wrote:
DOJ won’t allow anymore mergers. There are too few airlines as is. The current crisis doesn’t change anything. There will be no mergers now or in the near future.


How are there too few airlines?

Exhibit A:
American
United
Delta
Southwest
JetBlue
Alaska
Spirit
Frontier
Allegiant
Hawaiian
Sun Country
 
9Patch
Posts: 541
Joined: Wed Mar 13, 2019 10:38 pm

Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Wed May 06, 2020 6:16 pm

Dominic Gates:

[Chief Financial Officer Shane Tackett] said that Alaska will permanently retire from its fleet a dozen Airbus jets: ten A319s that were among its smallest and least profitable aircraft, and two leased A320s that had not been reconfigured from the Virgin America to the Alaska interior.


An additional seven unmodified A320s are parked and unlikely to return to scheduled service.

As a result of parking the Airbus planes, Alaska is going to use the current pilot downtime to retrain 240 of its Airbus pilots to fly the Boeing 737.

However, the company still has 10 larger Airbus A321s that it considers very efficient, so those may stay in the fleet long term.

Alaska president Minicucci said management intends to "restructure the company" for low-cost operation and that a dual Airbus/Boeing fleet is "a higher cost for us."

But he added that "the Airbus 321 is a great airplane. We like it a lot."


https://www.adn.com/nation-world/2020/0 ... s-a-month/
 
FlyingElvii
Posts: 782
Joined: Wed Dec 27, 2017 10:53 pm

Re: Alaska Air Group (ALK) reports Q1 2020 financial results

Wed May 06, 2020 6:59 pm

ShinyAndChrome wrote:
NameOmitted wrote:
How did a thread about a quarterly report stating that AS has the reserves to survive more then a year without an improvement in the present situation shift so quickly to merger assumptions? Are people thinking that AS is daft enougufh to be wanting to buy?


To be fair, it's not like it takes that much to tip this place into merger speculation and that's when things are normal.

Just my humble opinion, but I don’t see any mergers happening.
With the inevitable huge draw downs, and more importantly, the large new pilot surplus that goes with it, I see numerous opportunities for new entrants.

While the US majors have provisions in their purchase agreements that planes they offload can never be used in the US again (aka the Western Pacific Effect), there are going to be TONS of aircraft available cheap, all over the world.

Cheap planes, cheap pilots, and opportunities...

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