Originally Posted by
WutFace
Right now, ALK seems like a ship without a rudder. They're getting pressured in the north by Delta. They're getting pressured in the South and Hawaii by Southwest.
Every other airline is making big steps in growth. Southwest wants 25% in 3 years. Frontier just ordered 130+ airframes.
What is Angle Lake's plan? I'm not seeing it. All they've hinted at is a mild restructuring and retreating from markets. They're walking away from the premium transcon market. They want to "reinforce" the destination network from SF and LA, but they're way too slow to market and Southwest is going to eat their lunch.
The airline industry is and has been feast and famine. Right now, it's feast time. And Alaska seems dead set on missing this window, losing market share, and squandering the benefits of the acquisition.
Help me feel better about this. Where's the big order?
I'm unsure how nearly 8% growth annual projected is a "ship without a rudder." And why get into the costly "arms race" of a maintaining dedicated sub-fleet chasing after premium transcons against companies like AA, UA, and DL that benefit from huge corporate agreements? The course AS is plotting isn't as high-yield on a per-customer basis, but it's a MUCH bigger market segment they're going after in transcons.
But part of that is keeping costs low to remain competitive when AA/DL/UA/B6 try to fight with fares that trash yields for everyone.
AS took a knee this past quarter due to the QX fiasco, definitely - but barring that, I doubt there'd be anywhere near the hand-wringing that appears to be going on right now. And lest we forget, PBP is STILL projecting a payout in the 7.5 to 8% range; it may seem low since we've been spoiled by record payouts of over 9% for the past 5 years, but it's still healthy.
Take this one milestone at a time and you'll see things improving. QX is already righting their ship. 12/31 is the last day for Elevate. Then SOC in January, and single PSS on 4/25/18. Along the way, you see the first Airbus leave the paint shop in AS livery, followed by everything in the fleet getting retrofitted into the new interiors.
It's going to be an interesting ride, and I think, a very rewarding one.