Alaska has record first quarter

good work by AS but the real test will be this summer since that is when most of the new competitive domestic capacity ramps up.

DL is up to 4 on ANC-SEA.

and note that AS paid 30 cents more gallon for jet fuel than DL. wowza.
Even a 12% CASM advantage is diminished when you pay that kind of fuel premium.
 
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I'm simply noting how much more they paid for fuel against a competitor that they decided they didn't want to work with on a codeshare basis.

If you want a negative comment, I'll put on here that their dissing of the codeshare relationship with DL will go down as one of the bigger strategic blunders that an airline has made.

It won't take many years before AS has to face the reality that they gave up a very lucrative hub at SEA and the ability to codeshare with DL in order to remain independent and have multiple mistresses.
 
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AS wont give up SEA   second  DL bullied them around AS did not buy it  and they will eventually or sooner expand codeshare with AA may be a few others  but it wont be on DL terms.  as far as Im concerned  DL lost out bec of their own stupidity   AS knows what they want and what they need  but in no way are they gonna be bullied into it
 
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good for AS.... given that there are huge DL ads in the SEA airport, AS had no choice but to try and fight back.

whatever AS does or doesn't do doesn't change that DL has about 1/3 of the seats in the SEA local market by this summer and will be the largest revenue carrier based on its far more valuable network in SEA.

Internet chat gurus can point fingers about who is at fault all they want but DL had a codeshare with AS for them to deliver domestic traffic to DL int'l flights; not only did AS not provide the seats that DL needed, they turned around and thumbed their nose at DL by adding even more codeshares which makes it even harder for AS to argue that they don't have seats they can sell to DL.

Doesn't matter, though. AS had a nice near monopoly hub at SEA; UA had already given signs of pulling back but AS screwed up the opportunity to strengthen their position in the SEA market and will now have a major competitive hub to look at from their largest hub operation.

AA won't make a difference; they are right back to the same #3 position on the west coast among the big 3 carriers that they were before the west coast because of DL's growth.

AS' self-described push to retain its independence could very well go down as one of the biggest strategic blunders in the airline industry and could relegate AS to the same type of position as Midwest Express and other niche carriers that blew it at the cost of their long term survival
 
 
WorldTraveler said:
good for AS....
Indeed. Maybe it'll do what "Keep DL my DL" did for this place...

Internet chat gurus
Lol.


Doesn't matter, though.
I'm fairly certain most people on the intahwebz have enough self-awareness to recognize that what they're chatting about won't ultimately affect decisions on that scale.

AS' self-described push to retain its independence could very well go down as one of the biggest strategic blunders in the airline industry...
...Or it could payoff, and they'll be just fine. Who knows? Isn't watching it all play out half the fun?
 
first, it may very well rally the troops but in the age of social media, giving Delta a couple second spotlight of what is likely supposed to be an intra-company rah-rah tool shows the effect DL is indeed having. (note the DL 767 landing at 0.27 - and it is a BEAUTIFUL landing indeed).

Second, all the internal rah rah doesn't change the external economic forces that AS brought on themselves. DL had no plans to add a dozen more domestic cities on DL coded aircraft. DL has pockets and a fleet way, way bigger than AS could ever dream to have.

Third, Alaska isn't Alaska; it is Seattle. Their crotch has apparently most been frosted because of DL's incursion into Alaska but they are an outsider to Alaska as well. They are lower 48 based airline.

fourth, all the stuff about the complexity of the AS operation is child's play in light of the fact that the sun never sets on the DL operation. And not just on one aircraft somewhere in Africa but dozens of DL aircraft flying into airports that are as complex or more so than JNU.


fifth, DL is itself running a very good operation and receiving plenty of accolades for what it does. Considering DL operates in the much more congested east far more than AS, DL's west coast operations look even more reliable than AS'.

sixth, DL is VERY aggressive AND successful at achieving its strategic goals, of which a Pacific Northwest gateway to Asia has been known to be one. With the AA/US merger and UA's strategic blunders, this is DL's hour to take the west coast battle on full steam ahead and based on the amount of capacity that DL is adding to both SEA AND LAX, DL is playing for keeps and to win.

seventh, the impact of DL's domestic expansion will be felt in the next few months and professional analysts are beginning to sound the alarm that ALK stock might not be a good investment until the competitive issues get worked out.

http://www.fool.com/investing/general/2014/04/29/rising-competition-is-still-a-big-worry-for-alaska.aspx

Alaska Air Group investors shouldn't take too much comfort from the company's strong Q1 results because hardly any of the new flights from Delta had begun during the quarter. Most of Delta's new capacity is coming online during the spring, with a few more flights beginning in the fall.

Alaska Air Group has a talented management team that has consistently created value for shareholders in recent years. It is thus in good hands to weather the challenges that lie ahead. However, I still think investors would be better off avoiding the stock.

Delta's growth in Seattle will put pressure on Alaska's unit revenue as 2014 progresses. Most importantly, it's hard to predict where Delta's growth in Seattle might end. As it adds long-haul international routes, it will be able to support more and more domestic flights in Seattle. In the long run, it could challenge Alaska's dominance in its home market. That's too much risk to contemplate investing in Alaska Air Group.



To the analyst's point, DL has more domestic capacity from SEA as of this summer than even UA did before 9/11. and UA has been the only airline since deregulation that has had enough impact on SEA to matter.

It's also worth noting that DL has the highest average aircraft size from the west coast, considerable larger than AA/US, UA, or AS. Of the largest west coast carriers, DL is much closer to WN than the other legacy carriers, including AS.

Good for AS for trying to rally the troops but the threshold has been crossed. DL committed to an int'l operation that they wanted to have AS serve as providing DL's non-hub domestic feed.

AS wasn't interested and there is no conceivable way that DL was going to walk away from its int'l buildup because of the lack of feed from AS.

AS now has to live with the consequences of its decision and their company will very likely constantly be fighting to achieve the levels of financial success they once knew because the market will be divided among two competitors where AS once had it to themselves
 
WorldTraveler said:
and note that AS paid 30 cents more gallon for jet fuel than DL. wowza.
Even a 12% CASM advantage is diminished when you pay that kind of fuel premium.
Hardly shocking. Take a look at a route map, Skippy.

Somewhere between 15 & 20% of AS's fuel is purchased in Alaska, where there's a premium added for transport from the lower 48, since there's no jet fuel production in Alaska according to the EIA.

Another 60% (if not higher) is purchased between Washington, Oregon or California, all with considerably higher fuel costs than you'll find in ATL, DTW, or NYC.

Even with DL expanding in SEA, the average they're going to pay for fuel isn't going to climb as much due to the size of their operation.
 
which puts AS at a disadvantage against a carrier that not only has US petroleum trading contracts.

Those who were convinced that DL would be harmed because AS decided to fight back might be a little surprised.
 
Spiking the football a little early, perhaps?

AS has barely started to respond to DL, so you might want to wait to see how the second and third quarter of the game goes before you declare your team the winner.
 
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