Prost
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RE: Alaska Record 1st Quarter 2016 Results

Fri Apr 22, 2016 5:53 pm

Will AS be able to maintain this performance while also merging VX network into it's own? Also, will the assumption of debt ($4 Billion I believe) also depress their future performance?
 
Passedv1
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RE: Alaska Record 1st Quarter 2016 Results

Fri Apr 22, 2016 6:05 pm

Quoting LAXtoATL (Reply 36):
But everybody is suffering here and it is everybody's interest to get the price of oil back up

If by everybody you mean the oil and gas producers? They are hardly everybody. There are far more buyers of petroleum products then sellers of crude oil. If the oil industry had any long term control of the price of oil they would have used it already. While the results of some opec meetings might shock the price up for a few days...once the "noise" goes away...the market clearing price is the market clearing price and prices settle back down again.
 
LAXtoATL
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RE: Alaska Record 1st Quarter 2016 Results

Fri Apr 22, 2016 6:18 pm

Quoting Passedv1 (Reply 51):

If by everybody you mean the oil and gas producers? They are hardly everybody. There are far more buyers of petroleum products then sellers of crude oil. If the oil industry had any long term control of the price of oil they would have used it already. While the results of some opec meetings might shock the price up for a few days...once the "noise" goes away...the market clearing price is the market clearing price and prices settle back down again.

Supply and demand. OPEC doesn't set prices, but they can control supply. They control the overwhelming majority of oil supply in the world. If they decide to gap production and thus the supply of oil, the price will rise. They have done it before. Although, with new technologies and new oil discoveries they don't have the same dominance over the world market as they once did but they still control the majority of supply.

Nobody knows what they are going to do and I'm not sure they even know, but OPEC (and really we are talking about Saudi Arabia) absolutely has the power to make oil prices go up. Is their a cost to that? Of course. Which is why they have been reluctant so far to put a cap on capacity. But if they make that decision, oil will absolute rise in price both immediately and drastically.
 
Prost
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RE: Alaska Record 1st Quarter 2016 Results

Fri Apr 22, 2016 6:50 pm

Quoting LAXtoATL (Reply 52):
Supply and demand. OPEC doesn't set prices, but they can control supply. They control the overwhelming majority of oil supply in the world. If they decide to gap production and thus the supply of oil, the price will rise.

OPEC now only controls 40% of the world's oil supply. Not insignificant, but also not a majority.

http://www.eia.gov/finance/markets/supply-opec.cfm
 
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EA CO AS
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RE: Alaska Record 1st Quarter 2016 Results

Fri Apr 22, 2016 7:58 pm

Quoting LAXtoATL (Reply 52):
OPEC doesn't set prices, but they can control supply

OPEC is a non-entity at this point; they cannot make decisions as a cartel when their largest member is the one making unilateral supply moves that impact the rest.

Thankfully, the Saudi position of keeping production high to not cede market share will keep oil prices down for the foreseeable future, especially now that the technology and infrastructure for U.S. production can keep them honest at prices at or under $60/bbl.
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Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
MSPNWA
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RE: Alaska Record 1st Quarter 2016 Results

Sat Apr 23, 2016 2:07 am

Quoting BoeingGuy (Reply 48):
What missteps are those? Please elaborate? I always thought AS was a well managed successful company. Please enlighten us on their missteps.

Putting half their eggs in an lightly defended basket (SEA). I sense that AS was content with being successful at their own little niche corner of the States. That was all find and dandy until competition knocked on the door. They needed to diversify either domestically, out of their region, and/or by going full-scale international. Playing the codeshare game and being friends with everyone was great until the wolf slipped in. Now AS has lost millions of dollars and is having to use large amounts of cash and assets into marginal areas just to defend what it has instead of moving into and growing more profitable areas. Now they're buying an airline that struggled financially. They have a long, tough road to hoe, and it all goes back to strategic mistakes made years ago.
 
ASFlyer
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RE: Alaska Record 1st Quarter 2016 Results

Sat Apr 23, 2016 2:52 am

Quoting MSPNWA (Reply 55):
Now AS has lost millions of dollars and is having to use large amounts of cash and assets into marginal areas just to defend what it has instead of moving into and growing more profitable areas. Now they're buying an airline that struggled financially. They have a long, tough road to hoe, and it all goes back to strategic mistakes made years ago.

In what universe has AS "lost millions of dollars" and "is having to use large amounts of cash and assets into marginal areas just to defend what it has"?
 
ASFlyer
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RE: Alaska Record 1st Quarter 2016 Results

Sat Apr 23, 2016 3:05 am

Quoting RWA380 (Reply 41):
This was from someone in the company & not meant to be gospel, but it's how things are going as of now. AS will certainly end up flying them in the short term, but I believe the AS relationship with Boeing is very solid & will continue to remain so.

With all respect, because I totally respect and appreciate your posts, I don't think anyone that knows anything in the company is talking right now. Anything you've heard is gossip. Certainly the people in the know aren't talking. And no decisions have been made so it's not "how things are going as of now". How things are going as of this point is that AS is going one step at a time. They're focused on getting the VX shareholder approval for the buyout then they'll move forward with that. In the interim, they will be looking at the Airbus planes and make a decision. No decisions have been made - or the leaders are just lying, but I've not known them to do that in the past. I trust our leaders - which I know sounds naive, but they've proven themselves to be trustworthy to this point. I might also add that, although the Boeing relationship has been solid over the years, it would be irresponsible of any company to overlook a better option just because of an emotional connection to another company.

[Edited 2016-04-22 20:08:55]
 
tortugamon
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RE: Alaska Record 1st Quarter 2016 Results

Sat Apr 23, 2016 3:12 am

Quoting MSPNWA (Reply 55):
Now AS has lost millions of dollars and is having to use large amounts of cash and assets into marginal areas just to defend what it has instead of moving into and growing more profitable areas.

That's not exactly the way I understand it. AS seems to be holding its own in SEA. It surprised me. Yes DL gave them some real competition and it forced AS to adapt but many of the routes that AS has added as a result of the competition have been profitable. They aren't expanding at the demise of their finances.

I think dealing with DL has given them the confidence that they can expand and compete.

tortugamon
 
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TheRedBaron
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RE: Alaska Record 1st Quarter 2016 Results

Sat Apr 23, 2016 4:15 am

Quoting LAXtoATL (Reply 52):
But if they make that decision, oil will absolute rise in price both immediately and drastically.

The Saudies Know that Mexico Brazil and Venezuela are in the doldrums, so they will jump to the market if they drop production...

Quoting tortugamon (Reply 58):
I think dealing with DL has given them the confidence that they can expand and compete.

  

TRB
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RWA380
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RE: Alaska Record 1st Quarter 2016 Results

Sat Apr 23, 2016 5:12 am

Quoting ASFlyer (Reply 57):
With all respect, because I totally respect and appreciate your posts,

Appreciated & ditto ...

Quoting ASFlyer (Reply 57):
I don't think anyone that knows anything in the company is talking right now.

You are correct, no one has been allowed to talk publicly about any aspect of this acquisition, until it's finalized. I should not have said anything at all.

Quoting ASFlyer (Reply 57):
Anything you've heard is gossip.

Well, I can't say either way as if it's gossip or not, because I'm only the person that was told. I can not give any further info on this persons position in the company.

Quoting ASFlyer (Reply 57):
Certainly the people in the know aren't talking.

Of course, again that could deter a favorable VX B.O.D vote in June. If the wrong thong was said.

Quoting ASFlyer (Reply 57):
And no decisions have been made

I'm sure you're right & even if they had been made, things can change at a moments notice in this industry.

Quoting ASFlyer (Reply 57):
so it's not "how things are going as of now".

I am almost always real good about not sharing things I hear from my friend, because it can upset people. Last thing I knew in advance, was when Cuba was applied for from LAX, I told people, without coming out right & saying it, that AS would only apply from LAX, I was told I was wrong, had a gossip line into the company, yet the following week, there we were.

Quoting ASFlyer (Reply 57):
How things are going as of this point is that AS is going one step at a time.

That is how things always go with AS, as I stated they don't do things knee jerk.

Quoting ASFlyer (Reply 57):
They're focused on getting the VX shareholder approval for the buyout then they'll move forward with that. In the interim, they will be looking at the Airbus planes and make a decision.

As was stated above, since the majority of shareholders are investment firms, they have already gotten behind the acquisition, so although key & important, from what I've heard & read, the vote in June is a mere formality.

Quoting ASFlyer (Reply 57):
No decisions have been made - or the leaders are just lying,

I'm sure you are not being lied to, but as a past employee of a Fortune 50 company, most big corporate dealings are never run by us front line employees.

Quoting ASFlyer (Reply 57):
I trust our leaders - which I know sounds naive, but they've proven themselves to be trustworthy to this point.

It's not naïve to believe in your company, I hope you do, it matters to my bottom line, You see, I have money invested with AAG, I too trust your company & they have been trustworthy & profitable., I don't expect that to change.

Quoting ASFlyer (Reply 57):
I might also add that, although the Boeing relationship has been solid over the years, it would be irresponsible of any company to overlook a better option just because of an emotional connection to another company.

Of course, they are flying Embraers under the Alaska brand, they really aren't all Boeing any longer, even those are OO & soon to be QX owned jets. I have a very tough time believing AS will stay with two very similarly defined aircraft types, just for the costs alone. But I'm sure if AS loves their 319's & 320's & soon 321neo's then they may go with the mixed fleet, we'll surely see.
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IPFreely
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RE: Alaska Record 1st Quarter 2016 Results

Sat Apr 23, 2016 5:19 am

Quoting ASFlyer (Reply 56):
In what universe has AS "lost millions of dollars" and "is having to use large amounts of cash and assets into marginal areas just to defend what it has"?

In the same universe where people believe Northwest Airlines never went bankrupt and is still in business.
 
32andBelow
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RE: Alaska Record 1st Quarter 2016 Results

Sat Apr 23, 2016 5:23 am

Quoting RWA380 (Reply 60):
I have a very tough time believing AS will stay with two very similarly defined aircraft types, just for the costs alone. But I'm sure if AS loves their 319's & 320's & soon 321neo's then they may go with the mixed fleet, we'll surely see.

I think they will love teh 321s.
 
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RE: Alaska Record 1st Quarter 2016 Results

Sat Apr 23, 2016 5:43 am

Quoting MSPNWA (Reply 55):
AS has lost millions of dollars and is having to use large amounts of cash and assets into marginal areas just to defend what it has instead of moving into and growing more profitable areas.

I'm sorry, but this couldn't be more incorrect.

While AS may not have made as much money as they could have due to high amounts of competitive pressure to/from SEA, they've not lost a single percentage point of market share at SEA, and have remained highly profitable. That speaks volumes.

You speak of "marginal areas" - what are those? All the new markets AS has opened have been performing well ahead of expectations, and the plan - prior to the VX acquisition - was to grow 4-8% annually, with the majority of that outside of the PNW. AS has been and continues to move into and grow new areas, each of which must be profitable to be retained.

Quoting RWA380 (Reply 60):
Of course, they are flying Embraers under the Alaska brand, they really aren't all Boeing any longer, even those are OO & soon to be QX owned jets.

The aircraft under the AS operating certificate are all Boeing, and will continue to be until the AS operating certificate sees the VX equipment moved over to it.

Quoting RWA380 (Reply 60):
I have a very tough time believing AS will stay with two very similarly defined aircraft types, just for the costs alone.

Depends on the costs; if VX has very favorable terms for retaining those planes, costs may not be a factor. And keep in mind that the A321NEO does things nothing currently in the AS fleet is capable of.

There's a LOT being looked at, none of which I can talk about publicly, but there are some VERY exciting things being discussed about integrating aspects of VX into the AS model.
"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
 
UA444
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RE: Alaska Record 1st Quarter 2016 Results

Sat Apr 23, 2016 6:17 am

Can the 321NEO do TPAC from SEA and ANC? If so then there's one way for AS to use it that the 737 won't be able to do.
 
n7371f
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RE: Alaska Record 1st Quarter 2016 Results

Sat Apr 23, 2016 7:19 am

Quoting EA CO AS (Reply 23):
SEA gate space is about maxed out for the next year, AS has begun expansion in other markets ex-SEA, and of course the VX acquisition is another big step in diversifying their revenue sources.

That's not why AS is expanding outside of SEA.
 
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RE: Alaska Record 1st Quarter 2016 Results

Sat Apr 23, 2016 7:56 am

Quoting n7371f (Reply 65):

That's not why AS is expanding outside of SEA.

AS had projected 4-8% annual growth going forward, economic conditions permitting, with the bulk of that in markets outside of SEA.
"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
 
VS11
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RE: Alaska Record 1st Quarter 2016 Results

Sat Apr 23, 2016 5:21 pm

In view of Saudi Arabia just taking a $10b loan for its price war chest and US banks provisioning $15b for losses made to the oil industry, I don't think we are going to see major oil price increases any time soon.
 
winginit
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RE: Alaska Record 1st Quarter 2016 Results

Sun Apr 24, 2016 12:15 am

Quoting EA CO AS (Reply 63):
While AS may not have made as much money as they could have due to high amounts of competitive pressure to/from SEA, they've not lost a single percentage point of market share at SEA, and have remained highly profitable.

Is that SEA market share stat sourced from somewhere? Not intending to be confrontational but I'm finding that extremely difficult to believe.
 
milemaster
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RE: Alaska Record 1st Quarter 2016 Results

Sun Apr 24, 2016 12:57 am

I fly AS occasionally and cannot for the life of me see any difference between them and the majors they compete against on midcon routes. AS is effectively a standard issue generic airline.

Wishing them luck selling that Eskimo brand to the NY-CA transcon market. So strange.

[Edited 2016-04-23 18:00:28]
 
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lightsaber
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RE: Alaska Record 1st Quarter 2016 Results

Sun Apr 24, 2016 2:32 am

Congrats to the AS team. Nice numbers.

Quoting EA CO AS (Reply 9):
If he's talking about keeping the Virgin America name, he's going to be disappointed.

SRB makes good money off the brand license.

Quoting toobz (Reply 12):
Is this considered a good or awful deal for AS?

Wow... I'm shocked there isn't more controversy.

Those who like the deal note AS will grow quickly at SFO and LAX.
Those who dislike note that AS paid 2X what VX was worth.

Sound investment? Time will tell. What I know is the VX shareholders won't ever do better.

Quoting LAXtoATL (Reply 26):
Crude oil is expected to hit $40-50 in the next 2-3 months. Considering early this year it hovered at 30, even below for awhile - that would be about 40-50% increase from Q1 prices.

Less than 2 years ago it was over $100/bbl. A decade ago it was about $70/bbl. While at anything above $40/bbl the business case for the NEO/MAX/C-series is there, it is still cheap oil.

Quoting vs11 (Reply 67):
In view of Saudi Arabia just taking a $10b loan for its price war chest and US banks provisioning $15b for losses made to the oil industry, I don't think we are going to see major oil price increases any time soon.

Plus Iran is bringing capacity online. I wouldn't be against prices creeping up a little, but some of the frackers make great money at $65/bbl. So if the price does creep up above that price, expect a US oil boom to restart. Heck, some of the frackers are profitable:
http://247wallst.com/energy-business...at-should-be-profitable-this-year/

Boy will investment in oil drilling/fracking climb if we see $60+/bbl oil.
With Russia, Saudi, Venezuela, and Iran all *needing* pricier oil, it will be interesting to see how the market goes.

Lightsaber
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hatbutton
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RE: Alaska Record 1st Quarter 2016 Results

Sun Apr 24, 2016 3:18 am

Quoting winginit (Reply 68):
Is that SEA market share stat sourced from somewhere? Not intending to be confrontational but I'm finding that extremely difficult to believe.

The stat is 100% true. You can find the numbers from DOT T-100 data which is all public information.

http://www.transtats.bts.gov/Tables.asp?DB_ID=111

If you pull ASMs for all carriers for just flights from SEA to North American destinations (so excluding long haul international which AS would not compete against), AS had 45% of the market in 2012 and 47% in 2015. So market share has actually gone up. Delta has obviously gained considerably going from 13% to 19% over that same time period. This has come at the expense of other airlines though, not Alaska. United has gone from 13% to 9% for example.
 
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RWA380
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RE: Alaska Record 1st Quarter 2016 Results

Sun Apr 24, 2016 4:21 am

Quoting UA444 (Reply 64):
Can the 321NEO do TPAC from SEA and ANC? If so then there's one way for AS to use it that the 737 won't be able to do.

Not without a big payload hit, consider the ETOPS requirements alone.

Quoting milemaster (Reply 69):
I fly AS occasionally and cannot for the life of me see any difference between them and the majors they compete against on midcon routes. AS is effectively a standard issue generic airline

What mileage program do you belong to then? The large percentage of Northwesterners fly AS because they go n/s to many places we travel to & their frequent flyer program is the best.

Quoting lightsaber (Reply 70):
Those who dislike note that AS paid 2X what VX was worth.

AS paid for things that hold more value for them, then others. SFO access on a much bigger scale, LAX access with even more gates & the most important thing was the loyal VX fliers, this is what AS has to step up their game (especially up front) to retain.
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PlanesNTrains
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RE: Alaska Record 1st Quarter 2016 Results

Sun Apr 24, 2016 5:19 am

Quoting hatbutton (Reply 71):
United has gone from 13% to 9% for example.

Explained partially by the CRJ200 I flew on today LAX-SEA on UAex. I'd probably avoid that like the plague in the future.

Quoting EA CO AS (Reply 40):
I'd imagine that the A321NEO will likely become the long-haul workhorse of the fleet, and the firm order from Airbus will see quite a few extra frames added down the line.

Looking forward to seeing where this is going.

-Dave
-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.
 
LAXtoATL
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RE: Alaska Record 1st Quarter 2016 Results

Sun Apr 24, 2016 2:43 pm

Quoting hatbutton (Reply 71):
If you pull ASMs for all carriers for just flights from SEA to North American destinations (so excluding long haul international which AS would not compete against)

Whether they choose to compete in it or not, long haul international is still part of the market.
Just looking at select segments is ignoring the Actual SEA market.
If long haul international is growing faster than domestic at SEA, and AS is getting zero of that then they are absolutely losing market share in SEA. I don't know if the data says that is true or not, but my point is no reason to exclude a segment of the market. Pull the entire data for two comparison periods - and that will reveal what AS true market share in SEA is. Selecting which markets you analyze is always a convenient way to get the numbers to support your position, but it does not paint the complete picture.
(i.e. WN can inflate its market share numbers in LAX by removing transcon data because they don't compete in it but so what it is part of the market. They don't compete because they know they aren't competitive)

Also, considering that DL has added a lot international capacity in SEA and AS has added capacity in smaller markets out of SEA (that neither compete in)... it is almost assuredly that on the overlapping competing routes that AS has lost a lot of market share. And as long as you want to exclude data where AS doesn't compete, then why not exclude the data where DL doesn't compete?
 
32andBelow
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RE: Alaska Record 1st Quarter 2016 Results

Sun Apr 24, 2016 4:00 pm

Quoting LAXtoATL (Reply 74):
If long haul international is growing faster than domestic at SEA, and AS is getting zero of that then they are absolutely losing market share in SEA. I don't know if the data says that is true or not, but my point is no reason to exclude a segment of the market. Pull the entire data for two comparison periods - and that will reveal what AS true market share in SEA is. Selecting which markets you analyze is always a convenient way to get the numbers to support your position, but it does not paint the complete picture.

I don't think adding a few wide bodies is going to pace faster than all the domestic that has been added. However, I am sure that marketshare number is a domestic one.
 
hatbutton
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RE: Alaska Record 1st Quarter 2016 Results

Sun Apr 24, 2016 5:19 pm

Quoting LAXtoATL (Reply 74):
Whether they choose to compete in it or not, long haul international is still part of the market.
Just looking at select segments is ignoring the Actual SEA market.
If long haul international is growing faster than domestic at SEA, and AS is getting zero of that then they are absolutely losing market share in SEA. I don't know if the data says that is true or not, but my point is no reason to exclude a segment of the market. Pull the entire data for two comparison periods - and that will reveal what AS true market share in SEA is. Selecting which markets you analyze is always a convenient way to get the numbers to support your position, but it does not paint the complete picture.
(i.e. WN can inflate its market share numbers in LAX by removing transcon data because they don't compete in it but so what it is part of the market. They don't compete because they know they aren't competitive)

Also, considering that DL has added a lot international capacity in SEA and AS has added capacity in smaller markets out of SEA (that neither compete in)... it is almost assuredly that on the overlapping competing routes that AS has lost a lot of market share. And as long as you want to exclude data where AS doesn't compete, then why not exclude the data where DL doesn't compete?

I was not excluding all ASMs on purpose. I figured North American capacity would be most relevant. But since you asked, in 2012 AS had 35% of SEA share and in 2015 they had 37%. DL had 18% in 2012 and 25% in 2015. Same story. Satisfied?
 
ASFlyer
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RE: Alaska Record 1st Quarter 2016 Results

Sun Apr 24, 2016 5:31 pm

I think the figure people are talking about is the number of passengers carried at SEA. AS has remained static, while DL has modestly increased and most other carriers have modestly decreased. ASM's mean nothing if you're not filling the seats.
 
LAXtoATL
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RE: Alaska Record 1st Quarter 2016 Results

Sun Apr 24, 2016 5:37 pm

Quoting hatbutton (Reply 76):
I was not excluding all ASMs on purpose. I figured North American capacity would be most relevant. But since you asked, in 2012 AS had 35% of SEA share and in 2015 they had 37%. DL had 18% in 2012 and 25% in 2015. Same story. Satisfied?

Yup.

Quoting ASFlyer (Reply 77):
I think the figure people are talking about is the number of passengers carried at SEA. AS has remained static, while DL has modestly increased and most other carriers have modestly decreased. ASM's mean nothing if you're not filling the seats.

Correct. Passenger carried and not ASMs would be the relevant metric for markets hare.
 
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RE: Alaska Record 1st Quarter 2016 Results

Sun Apr 24, 2016 5:38 pm

Quoting ASFlyer (Reply 77):
I think the figure people are talking about is the number of passengers carried at SEA. AS has remained static, while DL has modestly increased and most other carriers have modestly decreased.

  

AS was 51% and remains at 51%, despite DL's massive buildup; the increases for DL have come largely at the expense of UA and WN.
"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
 
hatbutton
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RE: Alaska Record 1st Quarter 2016 Results

Sun Apr 24, 2016 7:00 pm

Quoting ASFlyer (Reply 77):
I think the figure people are talking about is the number of passengers carried at SEA.
Quoting LAXtoATL (Reply 78):

Correct. Passenger carried and not ASMs would be the relevant metric for markets hare.
Quoting EA CO AS (Reply 79):
AS was 51% and remains at 51%, despite DL's massive buildup; the increases for DL have come largely at the expense of UA and WN.

Using T-100 onboards data, for all markets (including international) here is 2012 vs 2015 for AS, DL, UA and WN.

2012 2015
AS 51% 51%
DL 11% 19%
UA 11% 7%
WN 9% 8%

So AS has held firm despite DL's increases as has been mentioned.
 
winginit
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RE: Alaska Record 1st Quarter 2016 Results

Sun Apr 24, 2016 10:44 pm

Quoting hatbutton (Reply 71):
The stat is 100% true. You can find the numbers from DOT T-100 data which is all public information.

http://www.transtats.bts.gov/Tables.asp?DB_ID=111

If you pull ASMs for all carriers for just flights from SEA to North American destinations (so excluding long haul international which AS would not compete against), AS had 45% of the market in 2012 and 47% in 2015. So market share has actually gone up. Delta has obviously gained considerably going from 13% to 19% over that same time period. This has come at the expense of other airlines though, not Alaska. United has gone from 13% to 9% for example.

Apologies if I've misinterpreted your post, but it sounds like you're talking about capacity share, which is very different than passenger or 'market' share. Alaska could still be maintaining capacity share while seeing market share reductions.
 
hatbutton
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RE: Alaska Record 1st Quarter 2016 Results

Mon Apr 25, 2016 4:19 am

Quoting winginit (Reply 81):
Apologies if I've misinterpreted your post, but it sounds like you're talking about capacity share, which is very different than passenger or 'market' share. Alaska could still be maintaining capacity share while seeing market share reductions.

Read post 80...the one right before your post....AS passenger share has not faltered either since DL began building SEA.
 
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RE: Alaska Record 1st Quarter 2016 Results

Tue Apr 26, 2016 10:01 am

Quoting klkla (Reply 22):
What type of profit sharing do you guys have?

It's known as "PBP" for "Performance-Based Pay" based on metrics set by the BOD each year. There's a threshold level, target level, and maximum level for each. Think of them as "minimum," "target," and "stretch" goals.

If the company hits the "target" for each, the payout is equal to 5% of each employee's annual wages.

The metrics that define it are as follows:

o The number of safety risk management system "level 3" events in the year
o full-year CASM
o Customer Satisfaction survey scores
o Pretax profit


The first three carry 10% weight each; the last, 70%. (Hitting target for all four = 10+10+10+70, or 100% of the 5% payout)

Underperforming in any area and hitting only the threshold equals 1/4 of the payout.
Reaching the stretch goal for each area equals 2X the payout.

So the theoretical maximum payout is 10% of pay, which AS employees saw in 2015 (from the FY2014 results).

PBP has averaged about 8.7% of pay over the past 5 years - not too shabby.
"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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