Archive for the 'Alaska' CategoryPage 3 of 5

Hawaiian Steps on Alaska’s Turf with New Oakland Flight

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Dan Webb
on September 21, 2009
in Alaska and Hawaiian
. 0 Comments

sep20Last week, Hawaiian announced some additional flights, which coincides with some changes in the carrier’s fleet. The airline is currently all-Boeing, but that will change next year when the first of three leased A330s will arrive. The airline has also ordered A330s and A350s from Airbus.

The airline will be doing some additional flying during the summer season. San Diego-Maui will be launched again – Hawaiian did operate route in summer 2008, but did not this year. Meanwhile, the airline said it would be adding an additional flight between Los Angeles and Honolulu with one of the new A330s, though at this point, it is listed as a 767-300 in Hawaiian’s timetable.

But one of the interesting moves is new daily summer service between Oakland and Maui. ATA and Aloha operated this route before they went bust, but this year Alaska announced it would start operating the route four times a week starting in November. The new flight from Hawaiian complements its existing flight from Oakland to Honolulu.

Clearly, Hawaiian thinks there’s more demand in the market, and a daily 767-300 is a lot of capacity compared to Alaska’s four 737-800s a week. It will be interesting to see how this one shakes out, at least for the summer – Hawaiian’s flight starts on June 18 and runs through September 6. I wonder if Alaska will decide if it’s worthwhile to add any additional capacity in this market.

Photo Credit:

http://www.flickr.com/photos/uzvards/ / CC BY-SA 2.0

Revisiting Alaska’s July Revenue Numbers

Published
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Dan Webb
on August 28, 2009
in Alaska
. 0 Comments

Earlier this week, I had already discussed Alaska’s July numbers, but I realized I could analyze those a bit more. The airline noted that PRASM (passenger revenue per available seat mile) and RASM (revenue per available seat mile) were affected positively by the first bag fee, and the company estimates it earned $4.9 million from that in July. Meanwhile, Alaska estimates that a new agreement on the company’s Mileage Plan card will give the company an extra $2.5 million each month for the rest of this year.

These items, obviously, give the numbers a bit of a boost, so I decided to play around with them to remove that extra revenue. For RASM, I got 12.72 cents, and I calculated 11.64 cents for PRASM (compared to 13.07 and 11.87 cents, respectively). Comparing my numbers to last years’, I found a 1.99% decrease in RASM and a 3.25% decrease in PRASM (compared to a 0.7% increase and a 1.3% decrease).

Obviously, the removal of those other revenue make the comparisons to last year look a bit worse. Nevertheless, the decreases I calculated are still superior to the double-digit declines that some other carriers have reported.

Alaska’s Monthly Investor Update

Published
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Dan Webb
on August 24, 2009
in Alaska
. 0 Comments

Alaska releases a monthly update with some traffic and financial data, and it’s always interesting to take a look. First, let’s look at revenue. PRASM was down 1.3% year-over-year and RASM was actually up 0.7%. That’s great, right? Well, not so fast. Alaska reports:

RASM and Passenger RASM were favorably impacted by first bag fee revenue, which began on July 7, 2009, of approximately $4.9 million for Alaska mainline. Given the seasonally high passenger count for July, this amount is in line with our previously disclosed estimate of $70 million in incremental annual revenue for Air Group. RASM was also favorably impacted by the revised Mileage Plan affinity card agreement described in our second quarter 10Q which we estimate will provide approximately $15 million in incremental revenue for the last six months of 2009, or approximately $2.5 million per month.

So, those pesky bag fees make comparing harder, especially when comparing the carriers. From United’s Q2 release:

There is no consistent industry practice among airlines regarding the recording and classification of ancillary and other revenues. Some ancillary revenue products, such as premium seat upsell revenues, are consistently recorded by most airlines as passenger revenue. Certain other ancillary revenue products, such as first and second bag fees and ticketing and change fees, are classified by
some other carriers in other revenue. For United, first and second bag fees and ticketing and change fees are recorded in passenger revenue.

So those RASM numbers are making the situation look a bit better than it actually is.

But, on the bright side, advanced booked load factors look good – up 1.5 points for both August and September. And that could be a good sign – Alaska had an  a 3.5 point increase for July in its last update, but  the increase was actually 4.6 points. Two things on that – first, still doesn’t say much on revenue. But it also goes with what Virgin America CEO David Cush told me – that advance loads aren’t the greatest at predicting actual traffic. It seems to me that more people are booking close-in.

Like many other airlines, Alaska is seeing an increase in CASM ex fuel and items, and the airline is predicting an 8% increase for the third quarter. Alaska also estimates its fuel cost per gallon will be down 36% year-over-year in the third quarter.

Anyway, off to NBTA festivities! :D

Alaska and Southwest Tell The FCC To Approve Row 44

Published
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Dan Webb
on July 3, 2009
in Alaska and Southwest
. 0 Comments

One of the biggest changes in inflight entertainment/services in the past few months has been the introduction of inflight Wi-Fi, and carriers like AirTran, American, Delta, United, and Virgin America (which has the entire fleet equipped) have been adopting it. These carriers have all been using Aircell’s ground-based GoGo service.

Meanwhile, Alaska and Southwest have been testing Row 44′s satellite-based system for a few months now, and Southwest is now trying to figure out what to charge for the service. Unfortunately, these two airlines can’t roll out Wi-Fi fleetwide until the FCC approves Row 44, and this process has been conveniently been slowed down by a competitor, ViaSat.

Mary Kirby, also known as “Runway Girl,” reports in an article from yesterday:

In a joint letter filed on 1 July with the FCC, lawyers for Alaska and Southwest say the expeditious grant of Row 44′s application for a permanent license “will generate enormous benefits, including substantial work for almost a dozen technology companies all over the United States at a critical time in our economy”.

The article also notes that the airlines what to move ahead on this because their competitors are making progress, which makes total sense, and I especially see that from Southwest’s perspective. The airline has been busy focusing on attracting more business passengers, and I think Wi-Fi is an important part of that plan (especially if they offer it for free or a discount to frequent passengers, as suggested here).

But I think the FCC should approve this, not just because I agree with the airlines, but because I’m flying Southwest to California next month, and I don’t think I can go a few hours without tweeting. :D

Alaska’s Aviation Geek Night

Published
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Dan Webb
on June 29, 2009
in Alaska
. 0 Comments

Alaska Airlines is still a relative newcomer to the social media scene, but it’s been using it effectively basically from the get-go in my opinion, which is a lot better compared to other carriers. I think one very good example is the airline’s utilization of Twitter to get the word out about service disruptions due the eruption of Mt. Redoubt

Last week, Alaska held an Aviation Geek Night for fifteen lucky tweeps, which I think is just great since I always enjoy things that show what’s “under the hood,” so to speak. Attendees were able to have fun in the 737 trainer, have fire extinguisher training, and even spend some time in the simulator!

I think this is just awesome. First, kudos to Alaska for putting this on for free. Second, while I love social media, I still think word-of-mouth is one of the most effective forms of marketing. Gee, do you think the attendees might tell their friends and family about this experience?

as5

The group, along with Elliott Pesut (far right), Campaign Management Specialist at Alaska and the man behind the airline’s Twitter account (@AlaskaAir).

More pictures (all of them from Alaska’s Facebook page) after the jump. Continue reading ‘Alaska’s Aviation Geek Night’

Alaska To Launch San Jose-Austin; Files 8-K

Published
by
Dan Webb
on June 23, 2009
in Alaska
. 1 Comment

Just after it was announced last week that American would be cutting its San Jose-Austin nonstop, Alaska announced yesterday that it would be filling the void with service starting September 2. Even with Alaska’s new service, though, the route is still seeing a cut in capacity. While it looks like American is currently flying two MD-80s, Alaska’s flight will only be one daily 737-800. One reason I found this interesting is that Alaska announced Austin-Seattle service in February. This route was also one that American dropped.

Brett Snyder makes a very good point in his post about this new route:

Alaska certainly has a smaller customer base in Austin than American does, but remember, you can earn American miles on Alaska flights, and those miles are elite qualifying miles as well. So the loyalists should support this flight.

Meanwhile, the carrier filed an 8-K with the SEC this morning, and I found a few highlights.

First, for the second quarter to date, Alaska is reporting 7.4% decrease in PRASM for May, and a 4.7% decrease for the second quarter to date. Compared to what other airlines have been reporting, that’s not too shabby, I think.

Second, Alaska is estimating to earn $30 million in revenue this year from the first bag fee, and after that it hopes to make $70 million annually from the fee.

Third, and finally, advanced load factors look good. June and July are actually positive – up one and two percent respectively, while August is down 3%. The filing reports that “June and July advanced bookings have significantly improved as the date of travel approaches.” These statisitics don’t provide many clues when it comes to revenue. While fuller planes is a good thing, it depends on who is filling the seats. For example, are the higher load factors coming from passengers looking for last minute deals? Still, it’s something positive.

Alaska Plays With Its Route Map

Published
by
Dan Webb
on May 8, 2009
in Alaska
. 1 Comment

On Wednesday, Alaska announced some pretty interesting changes to its route map.

First, the airline has announced a 37% cut in Mexico capacity starting July 2. The timing for this seems a bit off to me. Last week, other airlines announced capacity cuts in this focusing on May and June. US Airways actually announced that it hopes to have a full schedule to Mexico again on the same day. I’m sure there’s a reason, but it just seems a bit weird to wait to cut capacity for so long.

But, Alaska is finding other things to do with those aircraft when it trims its Mexico flying. That’s good, because according to this post on PlaneBuzz, Mexico makes up 8% of the airline’s passenger revenue.

The Hawaii flights will be getting a nice boost. On July 2, the Seattle-Honolulu route will receive its second daily frequency. Previously, the airline announced Portland-Maui service, with three flights a week starting August 7. That route will now start three times a week on July 2, and move to daily service on August 7. Finally, in November, the airline will fly four times a week to Maui, and three times a week to Kona from Oakland. That makes sense, considering that Oakland lost a lot of Hawaii service when ATA and Aloha folded, though Hawaiian has picked up the slack a bit with a daily flight to Honolulu.

Later this year Alaska will also be adding a couple of new cities to its system. On September 23, one daily flight to Houston Intercontinental from Seattle will be launched, and on October 23 Atlanta service from Seattle will begin, also with one daily flight. While there’s nothing mentioned in the press release, I wouldn’t be surprised if these flights could open up some possibilities for some codesharing with Continental or Delta.

Some More Traffic Reports

Published
by
Dan Webb
on May 5, 2009
in AirTran, Alaska, Allegiant and United
. 0 Comments

First, let me apologize for this week’s short and hurried posts, as I am in the midst of final exams. Fortunately, I’ll be all done on Monday next week!

AirTran’s results were pretty good – a 0.3% increase in RPMs paired with a 7.9% capacity cut (in terms of ASMs) increased the carrier’s load factor by 6.5 points.

Meanwhile, Allegiant continues to outperform the industry with a 34% increase in RPMs and a 29.8% increase in ASMs. The airline’s April load factor went up 2.8 points to 90.3 percent. Wow.

United’s results weren’t as great. The only portion of its flying to see an increase in RPMs was its regional flying, which makes sense as the airline will have to rely more and more on its regional flying as it cuts down the 737 fleet. The carrier’s load factor in North America, however, went up 1.4 points due to a 12.9% reduction in ASMs.

Finally, Alaska also saw a load factor increase – 2.0 points, as the carrier’s decrease in ASMs was greater than the decrease in RPMs.

Unlike Continental, these traffic reports don’t provide any clues about RASM.

Alaska Adds First Bag Fee (Nicely), US Airways Wants You to Pay for Bags Online

Published
by
Dan Webb
on April 23, 2009
in Alaska and US Airways
. 0 Comments

Alaska announced in its earnings release that it has decided to start charging for the first bag, starting July 1 for tickets purchased starting on May 1. Like most of the other airlines, the fee will be $15. I’m not a fan of fees, but I can see why Alaska wants to go this route, just looking at changes to its revenues compared to other carrers (more on that in a future post).

On the bright side, though, Alaska is adding a guarantee along with the charge:

Customers whose luggage is not at baggage claim within 25 minutes after their flight parks at the gate will receive 2,500 Alaska Airlines Mileage Plan miles or $25 off a future flight.

I like this. As a consumer, I feel that if I’m going to pay extra for my luggage, the airline better well have it delivered at my destination and do so promptly, so kudos to Alaska for doing this.

The fee does have exceptions:

First class, MVP and MVP Gold Mileage Plan members, unaccompanied minors, military personnel on active duty and passengers traveling to or from Mexico City and Guadalajara, Mexico, will not be charged for a first checked bag. Customers traveling solely within the state of Alaska also will continue to be allowed three free checked bags.

The fee for the third bag is dropping from $100 to $50. The second bag fee remains at $25.

Meanwhile, US Airways announced today that it will “begin offering its passengers the convenience of prepaying to check their bags online at usairways.com.” More details:

Customers who check in online at usairways.com with tickets booked starting today for flights on or after July 9 will have the option to prepay $15 for their first checked bag and $25 for their second checked bag.

But, this really isn’t an “option” to me, as passengers checking bags at the airport will have to pay an additional $5 per bag. Great.

I can totally understand US Airways wanting to have more of this done online, as it will probably make the check-in process a bit faster, but it would be nice if they tried to steer consumers to this method in a different way, like offering 100 miles or something. Oh well.

Alaska, JetBlue, US Airways Report Earnings

Published
by
Dan Webb
on April 23, 2009
in Alaska, JetBlue and US Airways
. 0 Comments

This morning Alaska reported a net loss of $25.4 million excluding special items. Meanwhile, JetBlue has joined AirTran in making money this quarter and posted $20 million in pre-tax income. US Airways posted a net loss of $103 million, or $260 when special credits are excluded.

Alaska and US Airways both had some announcements in the luggage fee department, which I’ll post on later. I skimmed the JetBlue press release and found this interesting tidbit:

CASM is expected to decrease between six and eight percent over the year-ago period. Excluding fuel, CASM in the second quarter is expected to increase between 15 and 17 percent year over year.

That seems like a decent cost increase to me, I’m interested in hearing where those cost pressures are coming from (which will probably be discussed in today’s call).