Alaska Airlines in Hawaii?

[joshuatree]

I said this before that Alaska Airlines may be considering to serve the Hawaii market but some folks thought I was insane. Here's more confirmation.

http://the.honoluluadvertiser.com/article/2007/Jan/21/br/br3701896524.html

According to them, it is not a matter of if, but when.

[GeckoGeek]

"We are looking at all of the top destinations that our passengers and mileage-point members would like to see on our schedule, and Hawaii is definitely at the top of the list,"

Gee, I wonder why? :D

It sounds like they'll fly to Hawaii. But will they try to serve the interisland market?

[joshuatree]

You know, that's a very good question but I think with the current interisland feud, I doubt they will get into it. However, their subsidiary, Horizon Air, primarily focuses on short hops and they have the right aircraft for the job so never say never.

But just having another credible player in the CONUS - Hawaii routes will further put pressure on HA and AQ.

[GeckoGeek]

Yeah, it will be interesting. Would they setup to fly to go direct to multiple islands? They might. Otherwise they'd have to drop them off in HNL and then work with one of the interisland carriers to get them to the final destination. But I'm not sure if there's enough projected traffic for direct. But if they do go direct, then it would seem to be a small jump to get into the interisland business.

[Miulang]

Alaska already code shares with HA (I can use Alaska Miles on HA flights and vice versa). The only reason why Alaska might want to go on its own is because they realize that their Mexico traffic (a substantial part of their revenue right now) might be slowed down significantly by the new TSA requirement that people travelling to/from Mexico will need passports. Alaska also would probably only fly between the West Coast and Hawai'i, although they do have some flights now to Florida and Washington, DC. I doubt they would want to get into the interisland market because it's already too crowded (it appears the demand for interisland travel has decreased significantly since go! entered the market because the load factors are consistently less than when the airfare wars started, and if there still was a great demand for interisland flights, go! would be flying with > 64% load factors). I'd have a tough time choosing between HA and Alaska to fly between CONUS and Hawai'i because both are great airlines with great service (I would choose whichever airline offered direct flights to Maui from Seattle, though). (BTW: Alaska Air is HQ'd in Seattle, not in Alaska, as most people believe!)

Miulang

[joshuatree]

I don't think the new passport rules are the only reason why Alaska would want to jump into the Hawaii market. Alaska is clearly on an expansion plan and rightly so since these days, the consolidation/mergers we see of many US airlines means the smaller fish need to build out or accept being bought out eventually. Alaska ordered 35 Boeing 737-800s in 2005 and will phase out their 22 MD-80s. That leaves an extra 13 new planes for new markets. I don't know if the 800s are the high gross weight versions with a max range of 2940nm. The standard 737-800s don't have the range to fly out to Hawaii but Alaska also has 22 737-700s (the type Aloha uses for CONUS flights) which also have the range if they are HGW. So it's easy to swap a current Alaska route with an 800 to free a 700 for Hawaii. I can see Alaska having flights out to multiple islands. The 700/800s have a pax range of 126 to 162, not a very large flight. Then they don't have to worry about doing interisland. Flying to Hawaii will also help them earn ETOPS certification if they already don't have it. Since you mentioned HA codeshares with Alaska, when Alaska decides to fly the route themselves, you can be sure HA will take another hit as it loses Alaska pax.

Regarding interisland loads, I wouldn't say demand has dropped. It's really more of an increase in supply as go! plus HA/AQ flooding the market with additional seats. The cheaper fares spur a growth in pax but not enough to compensate the increase in seats.

[Eric]

Back in the 1980s, I regularly flew United Airlines while commuting to and from college during summer and winter vacations. I happened to fly Alaska Airlines a couple of times, heading up and down the West Coast, and I was blown away by their customer service and food quality. It seemed light-years ahead of United's. I remember wondering at the time whether it was because they had a lot of Canadian customers, and as a result had to offer better service than what the average American customer would expect. I haven't had occasion to fly Alaska Airlines in more than 20 years, but I'd gladly try them again.

[Vanguard]

I figure they want to go to Hawaii because the "upper" 2 states (as opposed to "lower 48") need to stick together :)

[joshuatree]

I figure they want to go to Hawaii because the "upper" 2 states (as opposed to "lower 48") need to stick together :)

And have specials where at the end of the commercial in small fine print, "lower 48 not included"? :D

[Miulang]

Actually, another reason might be that one of their main hubs is Seattle, and I know that lots of people from the NW do travel to and from CONUS to the 'aina on a fairly regular basis (LOTS of expats live or go to school up here in the NW). They might also be considering flying between Hawai'i and Las Vegas because they currently fly to Las Vegas and lots of people from Hawai'i go to Las Vegas more than once a year.

Miulang

P.S. Here is an industry analysis (http://www.airlinebulletin.com/2006/09/what_does_the_f.html)of AS that was done this past Sept. Daily service to and from the state of Alaska is also a possibility because right now that market only has seasonal nonstop flights to Hawai'i (otherwise, they'd need to fly into Vancouver, BC or Seattle and catch a plane out from those two airports).

[Leo Lakio]

And have specials where at the end of the commercial in small fine print, "lower 48 not included"? :DOr a variation: "Prices slightly higher outside of Alaska and Hawai`i."

[joshuatree]

Looks like it finally happened. Alaska Airlines will have daily flights between the three city pairs on 737-800s. Dunno if the price is cheap or not from those cities.

Seattle-Honolulu
Seattle-Lihue
Anchorage-Honolulu

http://www.alaskaair.com/as/www2/Promo/New-Hawaii-Service.asp

[GnosticWarrior]

ALK - Alaska Airlines just closed below its 52 wk. low. Value investors David Dreman and Ronald Muhlenkamp (http://www.gurufocus.com/StockBuy.php?symbol=alk) have acquired very small positions. According to this article (http://moneycentral.msn.com/content/P145686.asp), there's supposed to be a shortage of planes to meet the demand of travelers and manufactures like Boeing and Airbus have a backlog and will take a few years to supply Airlines with enough planes to meet demand. This leaves room for Airlines to raise fares.

Although i've also heard that plane fares are still below pre-9/11 prices. Does anyone know if this is true? The fare wars between Go, Hawaiian, and Aloha are only for inter-Island flights right? If ALK can raise their fares, then it might be a good stock to own that also does business in Hawaii.

[Konaguy]

Alaska already code shares with HA (I can use Alaska Miles on HA flights and vice versa).

I believe I read that code share agreement between Alaska and HA was terminated as of April 30th, 2007.

[joshuatree]

I believe I read that code share agreement between Alaska and HA was terminated as of April 30th, 2007.

Hmm, that would make sense as Alaska would now be vying for the same piece of pie that HA wants.

On a side note, I read somewhere Delta is cutting back it's SFO-HNL service, they are removing their 767-400 even though it routinely has a packed flight. They are shifting their plane to transatlantic flights because of higher profit yields. I wonder what will they sub here instead?

And yet another side note, did Miulang disappear? :confused:

[Konaguy]

On a side note, I read somewhere Delta is cutting back it's SFO-HNL service, they are removing their 767-400 even though it routinely has a packed flight. They are shifting their plane to transatlantic flights because of higher profit yields. I wonder what will they sub here instead?


Delta has been cutting back their Hawaii service as of late. They ceased their ATL-SLC-KOA flight in late 2006 for example.