Will Southwest entry into Hawaii speed up merger discussions of HA with B6

Overthecascades · Thu May 10, 2018 2:12 am

Stocks of HA down by >10%.

910A · Thu May 10, 2018 2:33 am

???? B6 and HA are not going to merge. End of discussion.

fastmover · Thu May 10, 2018 2:33 am

I would not be surprised. Look the idea of JetBlue and organic growth ended when they tried to buy VA. They are obviously open to something. Before anyone says the last thing we need is more mergers that’s almost exactly what we need. The government let the big guys get way to big and to compete the small guys will have to merge.

Is HA the perfect match no BUT it’s not a bad match. It would bring more financial support to HA and help them bulk up. Two very strong brands and could inflict damage on ALK as they are busy digesting Va and they make a ton of money flying to Hawaii.

I could see almost a KLM/Air France idea where both airlines keep their brands. JetBlue would be the best merger for HA if they want to keep their brand. There is no way SWA it ALK or United would keep any part of HA. The other thing is jetblue (if they did trans Atlantic ) would become a much larger player with Pacific and Atlantic ops.

KMCOFlyer · Thu May 10, 2018 2:33 am

I don’t understand why everyone thinks HA is going to suffer from WNs entry into HI. I really think that AS will be the one who will struggle with WNs entry and I could easily see them cutting their OAK-HI flights altogether or move them to SFO. Also I don’t know where everyone gets the B6/HA merger roumers from, they don’t make any sense to me and I don’t know what B6 would gain from it.

usxguy · Thu May 10, 2018 2:36 am

why does everyone seem to think WN is going to do very well to Hawai'i??

wedgetail737 · Thu May 10, 2018 2:53 am

fastmover wrote:
I would not be surprised. Look the idea of JetBlue and organic growth ended when they tried to buy VA. They are obviously open to something. Before anyone says the last thing we need is more mergers that’s almost exactly what we need. The government let the big guys get way to big and to compete the small guys will have to merge.

Is HA the perfect match no BUT it’s not a bad match. It would bring more financial support to HA and help them bulk up. Two very strong brands and could inflict damage on ALK as they are busy digesting Va and they make a ton of money flying to Hawaii.

I could see almost a KLM/Air France idea where both airlines keep their brands. JetBlue would be the best merger for HA if they want to keep their brand. There is no way SWA it ALK or United would keep any part of HA. The other thing is jetblue (if they did trans Atlantic ) would become a much larger player with Pacific and Atlantic ops.

By the way, B6 didn't try to purchase VA...they tried and failed to purchase VX.

Jamake1 · Thu May 10, 2018 3:04 am

I’ve always thought Hawaiian’s route system would nicely complement JetBlue’s network...especially if B6 expands across the Atlantic and/or into S. America. Having said that, I would hate for either to lose their brand identity to a merger.

wnflyguy · Thu May 10, 2018 3:19 am

usxguy wrote:
why does everyone seem to think WN is going to do very well to Hawai'i??

No difference than the reasons why the haters think they will fail!

Flyguy

SPREE34 · Thu May 10, 2018 3:22 am

HA AS.

SFOtoORD · Thu May 10, 2018 3:35 am

Jamake1 wrote:
I’ve always thought Hawaiian’s route system would nicely complement JetBlue’s network...especially if B6 expands across the Atlantic and/or into S. America. Having said that, I would hate for either to lose their brand identity to a merger.

What would the complement be? They obvious have a small number of mutual spoke cities plus HNL-JFK, but other than that there is nothing complementary.

kabq737 · Thu May 10, 2018 3:36 am

Here we go again....

toltommy · Thu May 10, 2018 4:42 am

Buying HA doesn't give B6 anywhere near the size and scale they need to survive on their own. A merger with AS only gives them a "barbell style" network, like the US/HP merger. So it won't happen. I see B6 prettying itself up, and doing some transatlantic 321 flying from BOS. But B6 is the way for AA to become a player in the NYC market again. Not any time soon, but eventually B6 gets swallowed by AA. They are the only ones who can.

allegiantflyer · Thu May 10, 2018 5:13 am

AS has waaaaaay more to loose with WN in Hawaii than HA does. HA will always have the upper hand in any Hawaiian market.

airzona11 · Thu May 10, 2018 5:26 am

Jamake1 wrote:
I’ve always thought Hawaiian’s route system would nicely complement JetBlue’s network...especially if B6 expands across the Atlantic and/or into S. America. Having said that, I would hate for either to lose their brand identity to a merger.

Where does it add any value to either? Adding 1 stop connections to Hawaii lowers yields. HNL is not a good connecting hub above what HA has going. I just do not see what either adds to the other.

airliner371 · Thu May 10, 2018 5:58 am

usxguy wrote:
why does everyone seem to think WN is going to do very well to Hawai'i??

I don't particularly think WN is going to do "very well," but I think they will hurt AS to some extent. And WN has more resources to take a loss in HI in order to harm AS.

LAX772LR · Thu May 10, 2018 6:20 am

fastmover wrote:
The government let the big guys get way to big and to compete

Why do people keep repeating this, as if it were fact?

MORE total pax are flying on US airlines than ever before, on both Legacies and LoCos
MORE total destinations are served nonstop by US airlines than ever before,
The int'l market continues to fragment in favor of smaller gateways which aren't dominated by any one carrier, and
{most importantly of all} avg fares when adjusted for inflation, are LOWER after the mergers than they were before.

Please explain to me how (or better yet, why) you seem to believe that those are signs of a market stifled by lack of competition.... because on the face of it, that seems like a rather ridiculous conclusion to reach.

eta unknown · Thu May 10, 2018 7:52 am

My own belief is WN will realise very quickly the planned inter-island Hawaii flights will not perform well, especially with the operating characteristics of the aircraft at their disposal.

jagraham · Thu May 10, 2018 8:01 am

toltommy wrote:
Buying HA doesn't give B6 anywhere near the size and scale they need to survive on their own. A merger with AS only gives them a "barbell style" network, like the US/HP merger. So it won't happen. I see B6 prettying itself up, and doing some transatlantic 321 flying from BOS. But B6 is the way for AA to become a player in the NYC market again. Not any time soon, but eventually B6 gets swallowed by AA. They are the only ones who can.

Under no circumstances will the feds let the largest airline buy anything like B6

enilria · Thu May 10, 2018 11:46 am

Overthecascades wrote:
Stocks of HA down by >10%.

As a starting point, I hate mergers.

Having said that, from an economic point of view there is actually too little overlap for the economics to work. There's no ability to seek economies of scale, there's no capacity reduction opportunities, and both are weak in the California business market. HA doesn't help B6 sell transcons in the West. I see zero synergy.

It makes more sense for AS who would see it as a capacity reduction strategy and pick up the Hawaii feed network to their existing HNL flights.

tphuang · Thu May 10, 2018 12:34 pm

airliner371 wrote:
usxguy wrote:
why does everyone seem to think WN is going to do very well to Hawai'i??

I don't particularly think WN is going to do "very well," but I think they will hurt AS to some extent. And WN has more resources to take a loss in HI in order to harm AS.

WN doesn't need to do well to hurt AS and HA a lot. Just their mere presence will lower AS and HA yield significantly in these markets. A route that's making 5 or 10 million a year could become break even with an additional competitor doubling the capacity. Especially out of OAK/SMF, where WN is really dominant. If that happens to enough routes, those 15 to 20% margin becomes 5%.

enilria wrote:
As a starting point, I hate mergers.

Having said that, from an economic point of view there is actually too little overlap for the economics to work. There's no ability to seek economies of scale, there's no capacity reduction opportunities, and both are weak in the California business market. HA doesn't help B6 sell transcons in the West. I see zero synergy.

It makes more sense for AS who would see it as a capacity reduction strategy and pick up the Hawaii feed network to their existing HNL flights.

i hate mergers too. I don't see what B6 really has to gain here other than maybe expertise into widebody aircraft? They already have code share, mileage earning and redemption + sit in the same terminal at SFO/LAX. And unless they keep HA brand, it would seem to me that a merged B6 airline with no brand recognition would suffer in the HI market.

And AS/HA merger makes more sense, but that seems to be harder to clear regulatory hurdle since they have much greater overlap and would hurt competition a lot.

fastmover · Thu May 10, 2018 12:36 pm

wedgetail737 wrote:
fastmover wrote:
I would not be surprised. Look the idea of JetBlue and organic growth ended when they tried to buy VA. They are obviously open to something. Before anyone says the last thing we need is more mergers that’s almost exactly what we need. The government let the big guys get way to big and to compete the small guys will have to merge.

Is HA the perfect match no BUT it’s not a bad match. It would bring more financial support to HA and help them bulk up. Two very strong brands and could inflict damage on ALK as they are busy digesting Va and they make a ton of money flying to Hawaii.

I could see almost a KLM/Air France idea where both airlines keep their brands. JetBlue would be the best merger for HA if they want to keep their brand. There is no way SWA it ALK or United would keep any part of HA. The other thing is jetblue (if they did trans Atlantic ) would become a much larger player with Pacific and Atlantic ops.

By the way, B6 didn't try to purchase VA...they tried and failed to purchase VX.

Point being for all of its existence jetblue has talked about only organic growth so trying to buy VA was a huge shift in their core strategy.

I’m not sure what other point you are trying to make.

jplatts · Thu May 10, 2018 12:58 pm

There is no need for a B6-HA merger since connectivity between B6 and HA already does exist through a codeshare agreement. In addition, HA already serves JFK, and HA can already connect passengers from HNL to BOS from JFK.

fastmover · Thu May 10, 2018 1:06 pm

LAX772LR wrote:
fastmover wrote:
The government let the big guys get way to big and to compete

Why do people keep repeating this, as if it were fact?

MORE total pax are flying on US airlines than ever before, on both Legacies and LoCos
MORE total destinations are served nonstop by US airlines than ever before,
The int'l market continues to fragment in favor of smaller gateways which aren't dominated by any one carrier, and
{most importantly of all} avg fares when adjusted for inflation, are LOWER after the mergers than they were before.

Please explain to me how (or better yet, why) you seem to believe that those are signs of a market stifled by lack of competition.... because on the face of it, that seems like a rather ridiculous conclusion to reach.

Dude take it easy. It’s my opinion did I say it was a fact? This is just a discussion board.

But do you really think the big 4 don’t pretty much control the domestic market?

As of Jan 2018 United had the least domestic market share at 14% ALK Jetblue Spirit and Frontier combined just beat that. That is only United.

If you don’t think the big 4 have a major advantage I don’t know what to tell you.

I guess we will see but there seems to be a lot of consolidation talk of the “2nd tier” airlines in order for them to compete.

evank516 · Thu May 10, 2018 1:09 pm

B6 and HA aren't merging. There's nothing to speed up.

FriscoHeavy · Thu May 10, 2018 1:30 pm

I'm a firm believer WN will do very well in Hawaii. They just carry too many people on their flights throughout the Continental USA and such a large domestic following for them not to be able to haul mountains of people to Hawaii. Is it a guarantee they will do well? No. But if anyone has a realistic business model and chance for succeeding, they do.

RWA380 · Thu May 10, 2018 1:36 pm

I'm amazed & sometimes amused by the zeal many wish to converse "the next" merger. When in reality I can't think of one merger that would likely get a green light here in the US for the top 10 carriers. We have a stable & thriving domestic market. There is little reason to keep taking the non US3 carriers & making them US3 carriers, AS, B6 & NK all serve a slightly different niche that needs the flights, lets focus on stabilizing what is currently flying first.

NameOmitted · Thu May 10, 2018 1:59 pm

fastmover wrote:
But do you really think the big 4 don’t pretty much control the domestic market?

As of Jan 2018 United had the least domestic market share at 14% ALK Jetblue Spirit and Frontier combined just beat that. That is only United.

A point of disagreement is on whether or not this is a problem.

An airline is an extremely capitol expensive venture. Selling time in a 60 million dollar machine at 2-3 hundred dollars a pop is madness. Any kind of economies of scale on the mainline are needed, having 4 competitors there is probably all that is sustainable.

Outside of that, you have the niche markets that are very important locally, but that don't add up to the big 4. They don't need to merge to compete, because they are not really in competition with the big 4.

evank516 · Thu May 10, 2018 2:05 pm

RWA380 wrote:
I'm amazed & sometimes amused by the zeal many wish to converse "the next" merger. When in reality I can't think of one merger that would likely get a green light here in the US for the top 10 carriers. We have a stable & thriving domestic market. There is little reason to keep taking the non US3 carriers & making them US3 carriers, AS, B6 & NK all serve a slightly different niche that needs the flights, lets focus on stabilizing what is currently flying first.

You've become my new best friend. THANK YOU!!

MIflyer12 · Thu May 10, 2018 2:26 pm

tphuang wrote:
And AS/HA merger makes more sense, but that seems to be harder to clear regulatory hurdle since they have much greater overlap and would hurt competition a lot.

The Mods might think this a topic for another thread but I don't think it can be argued that an AS+HA merger would hurt competition a lot. There are already 3rd (or 4th) competitors on many of the non-stop routes that make up seat capacity to Hawaii. Southwest is going to be a competitor out of some of the lesser West Coast gateways.

MIflyer12 · Thu May 10, 2018 2:28 pm

fastmover wrote:
LAX772LR wrote:
fastmover wrote:
The government let the big guys get way to big and to compete

Why do people keep repeating this, as if it were fact?

MORE total pax are flying on US airlines than ever before, on both Legacies and LoCos
MORE total destinations are served nonstop by US airlines than ever before,
The int'l market continues to fragment in favor of smaller gateways which aren't dominated by any one carrier, and
{most importantly of all} avg fares when adjusted for inflation, are LOWER after the mergers than they were before.

Please explain to me how (or better yet, why) you seem to believe that those are signs of a market stifled by lack of competition.... because on the face of it, that seems like a rather ridiculous conclusion to reach.

Dude take it easy. It’s my opinion did I say it was a fact? This is just a discussion board.

But do you really think the big 4 don’t pretty much control the domestic market?

As of Jan 2018 United had the least domestic market share at 14% ALK Jetblue Spirit and Frontier combined just beat that. That is only United.

If you don’t think the big 4 have a major advantage I don’t know what to tell you.

I guess we will see but there seems to be a lot of consolidation talk of the “2nd tier” airlines in order for them to compete.

Objective facts are useful things - you can't have intelligent analysis or opinion without them.

(It would have been nice if LAX772LR cited some references.)

ScottB · Thu May 10, 2018 2:56 pm

fastmover wrote:
I would not be surprised. Look the idea of JetBlue and organic growth ended when they tried to buy VA. They are obviously open to something. Before anyone says the last thing we need is more mergers that’s almost exactly what we need. The government let the big guys get way to big and to compete the small guys will have to merge.

Is HA the perfect match no BUT it’s not a bad match. It would bring more financial support to HA and help them bulk up. Two very strong brands and could inflict damage on ALK as they are busy digesting Va and they make a ton of money flying to Hawaii.

I could see almost a KLM/Air France idea where both airlines keep their brands. JetBlue would be the best merger for HA if they want to keep their brand. There is no way SWA it ALK or United would keep any part of HA. The other thing is jetblue (if they did trans Atlantic ) would become a much larger player with Pacific and Atlantic ops.

A merger with VX made some sense for B6 because it would have eliminated a competitor in the transcon market and would have given them bases at LAX & SFO with far more realistic growth prospects than LGB. A merger with HA brings almost no synergy over the existing code share agreement. Connectivity to Hawaii, Australia, and Asia is far less important for an East-Coast-centric airline than expanding the network to Europe. Giving financial support to HA is meaningless to B6 shareholders, and maintaining two brands is silly. The European airline groups maintain multiple brands for political and cultural reasons, but they'd ideally prefer to be able to consolidate under fewer brands more focused on market segments than geographies.

toltommy wrote:
But B6 is the way for AA to become a player in the NYC market again. Not any time soon, but eventually B6 gets swallowed by AA. They are the only ones who can.

Nope. The buyer for B6 will be WN. It is the deal with the least overlap between the players, and it gives WN a presence in the geography in which it is weakest. The mismatch in the fleets is easily resolved over the space of 5-7 years with new deliveries.

ctrabs0114 · Thu May 10, 2018 6:17 pm

ScottB wrote:
toltommy wrote:
But B6 is the way for AA to become a player in the NYC market again. Not any time soon, but eventually B6 gets swallowed by AA. They are the only ones who can.

Nope. The buyer for B6 will be WN. It is the deal with the least overlap between the players, and it gives WN a presence in the geography in which it is weakest. The mismatch in the fleets is easily resolved over the space of 5-7 years with new deliveries.

And it will probably undergo as much scrutiny from USDOJ anti-trust lawyers than any hypothetical B6/AA merger.

ScottB · Thu May 10, 2018 6:45 pm

ctrabs0114 wrote:
ScottB wrote:
The buyer for B6 will be WN. It is the deal with the least overlap between the players, and it gives WN a presence in the geography in which it is weakest. The mismatch in the fleets is easily resolved over the space of 5-7 years with new deliveries.

And it will probably undergo as much scrutiny from USDOJ anti-trust lawyers than any hypothetical B6/AA merger.

It should undergo scrutiny! But in all honestly, the potential scope of any required divestitures would be meaningless in the grand scheme of things. Both B6 and WN are bit players at LGA and WN doesn't serve JFK at all. Maybe they'd have to give up some gates at BOS or FLL but that's something they'd do anyway to consolidate into B6's (or WN's at FLL) facilities. Maybe they'd have to divest a few slots at DCA but a combined WN-B6 would still be far smaller than AA there. Despite all the breathless speculation regarding imagined demand for LGB slots, I doubt there would be any takers in the event of a required divestiture. At pretty much every other airport served by both carriers, there's no shortage of gates or slots. The fact that both serve markets like BDL-MCO and PVD-MCO is meaningless because there's no barrier to any certificated U.S. carrier starting either route. Maybe they'd have to give up some FLL-HAV authorities but then is giving them to AA better for competition? I doubt it.

par13del · Thu May 10, 2018 7:01 pm

ScottB wrote:

Nope. The buyer for B6 will be WN. It is the deal with the least overlap between the players, and it gives WN a presence in the geography in which it is weakest. The mismatch in the fleets is easily resolved over the space of 5-7 years with new deliveries.

Well WN did want in to ATL and once they got access they promptly set about dismantling, so be careful what you think they want.....

strfyr51 · Thu May 10, 2018 7:26 pm

tphuang wrote:
airliner371 wrote:
usxguy wrote:
why does everyone seem to think WN is going to do very well to Hawai'i??

I don't particularly think WN is going to do "very well," but I think they will hurt AS to some extent. And WN has more resources to take a loss in HI in order to harm AS.

WN doesn't need to do well to hurt AS and HA a lot. Just their mere presence will lower AS and HA yield significantly in these markets. A route that's making 5 or 10 million a year could become break even with an additional competitor doubling the capacity. Especially out of OAK/SMF, where WN is really dominant. If that happens to enough routes, those 15 to 20% margin becomes 5%.

enilria wrote:
As a starting point, I hate mergers.

Having said that, from an economic point of view there is actually too little overlap for the economics to work. There's no ability to seek economies of scale, there's no capacity reduction opportunities, and both are weak in the California business market. HA doesn't help B6 sell transcons in the West. I see zero synergy.

It makes more sense for AS who would see it as a capacity reduction strategy and pick up the Hawaii feed network to their existing HNL flights.

i hate mergers too. I don't see what B6 really has to gain here other than maybe expertise into widebody aircraft? They already have code share, mileage earning and redemption + sit in the same terminal at SFO/LAX. And unless they keep HA brand, it would seem to me that a merged B6 airline with no brand recognition would suffer in the HI market.

And AS/HA merger makes more sense, but that seems to be harder to clear regulatory hurdle since they have much greater overlap and would hurt competition a lot.

This whole line of reasoning is flawed because it presumes WN is going to come in "guns blazing" and everybody is going to shrink in Fear.
That AIN'T gonna Happen!! The First time a WN airplane is down in the islands? That's when you'll see who does what to WHOM.
Southwest can talk a good game but HA shrinking or AS running in Fear? That's pure MESS!
If WN gets to fly interisland then United should move 30-40 A320's and A319's to hawaii and connect with their Air Micronesia routes
(as I suspect they've wanted to do since the days of Sen. Dan Inoye who talked United out of flying Interisland in the 1980's, to protect Aloha and Hawaiian)
WN will be finding their way in Hawaii for quite a while to come. They may make some "noise" but they won't be making that much noise right off the bat.

Frontier14 · Thu May 10, 2018 7:45 pm

usxguy wrote:
why does everyone seem to think WN is going to do very well to Hawai'i??

With the zillions of frequent flier mileage pax they have, it is a no brainier that their flights will be full.

Frontier 14

tphuang · Thu May 10, 2018 7:47 pm

strfyr51 wrote:
tphuang wrote:
airliner371 wrote:
I don't particularly think WN is going to do "very well," but I think they will hurt AS to some extent. And WN has more resources to take a loss in HI in order to harm AS.

WN doesn't need to do well to hurt AS and HA a lot. Just their mere presence will lower AS and HA yield significantly in these markets. A route that's making 5 or 10 million a year could become break even with an additional competitor doubling the capacity. Especially out of OAK/SMF, where WN is really dominant. If that happens to enough routes, those 15 to 20% margin becomes 5%.

enilria wrote:
As a starting point, I hate mergers.

Having said that, from an economic point of view there is actually too little overlap for the economics to work. There's no ability to seek economies of scale, there's no capacity reduction opportunities, and both are weak in the California business market. HA doesn't help B6 sell transcons in the West. I see zero synergy.

It makes more sense for AS who would see it as a capacity reduction strategy and pick up the Hawaii feed network to their existing HNL flights.

i hate mergers too. I don't see what B6 really has to gain here other than maybe expertise into widebody aircraft? They already have code share, mileage earning and redemption + sit in the same terminal at SFO/LAX. And unless they keep HA brand, it would seem to me that a merged B6 airline with no brand recognition would suffer in the HI market.

And AS/HA merger makes more sense, but that seems to be harder to clear regulatory hurdle since they have much greater overlap and would hurt competition a lot.

This whole line of reasoning is flawed because it presumes WN is going to come in "guns blazing" and everybody is going to shrink in Fear.
That AIN'T gonna Happen!! The First time a WN airplane is down in the islands? That's when you'll see who does what to WHOM.
Southwest can talk a good game but HA shrinking or AS running in Fear? That's pure MESS!
If WN gets to fly interisland then United should move 30-40 A320's and A319's to hawaii and connect with their Air Micronesia routes
(as I suspect they've wanted to do since the days of Sen. Dan Inoye who talked United out of flying Interisland in the 1980's, to protect Aloha and Hawaiian)
WN will be finding their way in Hawaii for quite a while to come. They may make some "noise" but they won't be making that much noise right off the bat.

Calm down.

Do you think added capacity and more competition will not result in lower yield and load factor for current players in the market?

WkndWanderer · Thu May 10, 2018 8:44 pm

ctrabs0114 wrote:
ScottB wrote:
toltommy wrote:
But B6 is the way for AA to become a player in the NYC market again. Not any time soon, but eventually B6 gets swallowed by AA. They are the only ones who can.

Nope. The buyer for B6 will be WN. It is the deal with the least overlap between the players, and it gives WN a presence in the geography in which it is weakest. The mismatch in the fleets is easily resolved over the space of 5-7 years with new deliveries.

And it will probably undergo as much scrutiny from USDOJ anti-trust lawyers than any hypothetical B6/AA merger.

AA is a much stronger player in the northeast than WN and the MIA/FLL overlap would be significant, an AA takeover would almost certainly receive more rigorous scrutiny and objections than one by WN.

Swadian · Thu May 10, 2018 8:58 pm

jagraham wrote:
toltommy wrote:
Buying HA doesn't give B6 anywhere near the size and scale they need to survive on their own. A merger with AS only gives them a "barbell style" network, like the US/HP merger. So it won't happen. I see B6 prettying itself up, and doing some transatlantic 321 flying from BOS. But B6 is the way for AA to become a player in the NYC market again. Not any time soon, but eventually B6 gets swallowed by AA. They are the only ones who can.

Under no circumstances will the feds let the largest airline buy anything like B6

After AA's demise in JFK and BOS, it is not out of the question. If B6 does bad, AA could very well make a bid and use B6 planes to fill up Terminal 8 and sell or lease Terminal 5 to someone else. AA would still have to deal with DL and UA in NYC and BOS.

tphuang wrote:
strfyr51 wrote:
tphuang wrote:
WN doesn't need to do well to hurt AS and HA a lot. Just their mere presence will lower AS and HA yield significantly in these markets. A route that's making 5 or 10 million a year could become break even with an additional competitor doubling the capacity. Especially out of OAK/SMF, where WN is really dominant. If that happens to enough routes, those 15 to 20% margin becomes 5%.

i hate mergers too. I don't see what B6 really has to gain here other than maybe expertise into widebody aircraft? They already have code share, mileage earning and redemption + sit in the same terminal at SFO/LAX. And unless they keep HA brand, it would seem to me that a merged B6 airline with no brand recognition would suffer in the HI market.

And AS/HA merger makes more sense, but that seems to be harder to clear regulatory hurdle since they have much greater overlap and would hurt competition a lot.

This whole line of reasoning is flawed because it presumes WN is going to come in "guns blazing" and everybody is going to shrink in Fear.
That AIN'T gonna Happen!! The First time a WN airplane is down in the islands? That's when you'll see who does what to WHOM.
Southwest can talk a good game but HA shrinking or AS running in Fear? That's pure MESS!
If WN gets to fly interisland then United should move 30-40 A320's and A319's to hawaii and connect with their Air Micronesia routes
(as I suspect they've wanted to do since the days of Sen. Dan Inoye who talked United out of flying Interisland in the 1980's, to protect Aloha and Hawaiian)
WN will be finding their way in Hawaii for quite a while to come. They may make some "noise" but they won't be making that much noise right off the bat.

Calm down.

Do you think added capacity and more competition will not result in lower yield and load factor for current players in the market?

I don't think B6 will merge with HA (that's a crazy idea) but AS could merge with either WN or HA. Either way there is still competition to Hawaii. However, WN will not merge with HA.

I think the ULCCs will remain niche players and the rest will fold into US4 except possibly HA due to geography.

WkndWanderer wrote:
ctrabs0114 wrote:
ScottB wrote:

Nope. The buyer for B6 will be WN. It is the deal with the least overlap between the players, and it gives WN a presence in the geography in which it is weakest. The mismatch in the fleets is easily resolved over the space of 5-7 years with new deliveries.

And it will probably undergo as much scrutiny from USDOJ anti-trust lawyers than any hypothetical B6/AA merger.

AA is a much stronger player in the northeast than WN and the MIA/FLL overlap would be significant, an AA takeover would almost certainly receive more rigorous scrutiny and objections than one by WN.

The DOJ could force AA to sell B6's FLL gates and slots to DL, WN, and UA in exchange for JFK and BOS.

phluser · Thu May 10, 2018 8:59 pm

AA can’t buy B6. AA is too big. Remember AA had to divest slots in LGA, more than what was pmUS’s slots. Even combined and assuming no divestiture in NY, DL was still larger but AA had to concede or else the merger was doa.

Aside from NY, the DOJ also didn’t want AA to be too big from this merger and forcing some surrender of LGA, DCA slots and DAL gates was a way of controlling AA’s size, while not letting AA close PHX as a hub and permitting AA decision on how to control its size.

Interestingly, if you add WN + B6’s enplanements, it’s just under AA in size, but ahead of DL. That could be a positive for the likelihood of approval.

I think a WN B6 merger would reduce competition and make it tougher for smaller carriers to compete.

I’d rather see B6 competing against WN for years to come, and it’d be better for the traveling public having more LCCs.

Maybe if B6 could buy out F9, it would increase scale in the Mid Atlantic, and Midwest, DEN, while complementing the BOS, NY and Florida hubs/focus cities.

ODwyerPW · Thu May 10, 2018 9:01 pm

Poor B6... doesn't anyone believe they stand a chance on their own. The number of merger threads featuring them is incredible.

How about B6, F9, NK, G4, HA, AS, SY all merge into a super carrier and they we could all stop talking about WN slowly picking them apart on every single route they fly causing them to merge with someone else to survive.....

LAX772LR · Thu May 10, 2018 9:11 pm

fastmover wrote:
It’s my opinion did I say it was a fact?

Opinions can be based on fallacy.

fastmover wrote:
But do you really think the big 4 don’t pretty much control the domestic market?

Doesn't matter what I, you, or anyone else thinks... the fact (remember, that's the context we're dealing in) is that they don't have have "control" sufficiently to manipulate the pricing or composition of the market on a macro scale.

If you believe otherwise, then I'm sure the DOJ would love to see your methodology, since theirs came to a different conclusion.

fastmover wrote:
As of Jan 2018 United had the least domestic market share at 14% ALK Jetblue Spirit and Frontier combined just beat that. That is only United.

Why do you continue to conflate market size with market influence? They're not the same thing.

fastmover wrote:
If you don’t think the big 4 have a major advantage I don’t know what to tell you.

"Major advantage" at what? What does that even mean?

Here, let's break it down:
Fare manipulation-- where's the evidence for an advantage in that, in anything other than select micro-markets that don't reflect the whole?
Route selection-- the domestic market is fully open, and LoCos are highly competitive in the regional int'l route selection process.
Slot allocation-- nope, DOT/DOJ often cutout specifications for LoCo-only access to slot restricted markets.

So again, where's this advantage that seems so clear to you, but doesn't appear to show up in an analytical overview? What's being missed?

ikramerica · Thu May 10, 2018 9:15 pm

With the newer CFMs having trouble with multiple short hops, how frequent do the flights need to be for that to impact ops? Can an 737MAX do LAX-HNL-OGG-HNL-LAX with normal turn times or is it overheated by the time it lands in OGG?

strfyr51 · Thu May 10, 2018 9:15 pm

fastmover wrote:
I would not be surprised. Look the idea of JetBlue and organic growth ended when they tried to buy VA. They are obviously open to something. Before anyone says the last thing we need is more mergers that’s almost exactly what we need. The government let the big guys get way to big and to compete the small guys will have to merge.

Is HA the perfect match no BUT it’s not a bad match. It would bring more financial support to HA and help them bulk up. Two very strong brands and could inflict damage on ALK as they are busy digesting Va and they make a ton of money flying to Hawaii.

I could see almost a KLM/Air France idea where both airlines keep their brands. JetBlue would be the best merger for HA if they want to keep their brand. There is no way SWA it ALK or United would keep any part of HA. The other thing is jetblue (if they did trans Atlantic ) would become a much larger player with Pacific and Atlantic ops.

I would doubt it. Neither has a west coast Hub and JBLU doesn't have any significant mid continent hub, (which they could have picked up with a merger with F9)
Hawaiian is getting to to small major status with their purchase of the B787's They could easily expand on the mainland as they've done it before.

LAX772LR · Thu May 10, 2018 9:15 pm

Frontier14 wrote:
usxguy wrote:
why does everyone seem to think WN is going to do very well to Hawai'i??

With the zillions of frequent flier mileage pax they have, it is a no brainier that their flights will be full.

I doubt many are questioning whether it'd be full.

The question is where it'd be (1) profitable and (2) whether that profit is sufficient to overcome the opportunity cost of sending those planes elsewhere.

Southwest obviously feels that it will, but the outcome remains to be seen.

Swadian · Thu May 10, 2018 9:26 pm

strfyr51 wrote:
fastmover wrote:
I would not be surprised. Look the idea of JetBlue and organic growth ended when they tried to buy VA. They are obviously open to something. Before anyone says the last thing we need is more mergers that’s almost exactly what we need. The government let the big guys get way to big and to compete the small guys will have to merge.

Is HA the perfect match no BUT it’s not a bad match. It would bring more financial support to HA and help them bulk up. Two very strong brands and could inflict damage on ALK as they are busy digesting Va and they make a ton of money flying to Hawaii.

I could see almost a KLM/Air France idea where both airlines keep their brands. JetBlue would be the best merger for HA if they want to keep their brand. There is no way SWA it ALK or United would keep any part of HA. The other thing is jetblue (if they did trans Atlantic ) would become a much larger player with Pacific and Atlantic ops.

I would doubt it. Neither has a west coast Hub and JBLU doesn't have any significant mid continent hub, (which they could have picked up with a merger with F9)
Hawaiian is getting to to small major status with their purchase of the B787's They could easily expand on the mainland as they've done it before.

Where are they deploying the 789 anyway? LHR? SIN? PER?

strfyr51 · Thu May 10, 2018 9:32 pm

LAX772LR wrote:
Frontier14 wrote:
usxguy wrote:
why does everyone seem to think WN is going to do very well to Hawai'i??

With the zillions of frequent flier mileage pax they have, it is a no brainier that their flights will be full.

I doubt many are questioning whether it'd be full.

The question is where it'd be (1) profitable and (2) whether that profit is sufficient to overcome the opportunity cost of sending those planes elsewhere.

Southwest obviously feels that it will, but the outcome remains to be seen.

I don't think many are considering the level of competition that already exists between Hawaii and the mainland west coast. And? it's Not like WN is flying any big airplanes. They're flying from newer gateway airports. And? their competitors are flying the same or larger equipment. WN is bringing NOTHING new to the table.
Not airplanes, Service, Nothing. They're not the next NEW Airline to fly to hawaii. They're just next. their impact is overestimated at present. 4-5 new B737's is not going to change much on a daily basis, Now, were it 4-5 new B777's? That might change things quite a bit!

TWA772LR · Thu May 10, 2018 9:49 pm

ScottB wrote:

Nope. The buyer for B6 will be WN. It is the deal with the least overlap between the players, and it gives WN a presence in the geography in which it is weakest. The mismatch in the fleets is easily resolved over the space of 5-7 years with new deliveries.

Southwest can keep the B6 brand but rename it Northeast. :stirthepot:

hiflyeras · Thu May 10, 2018 9:55 pm

Frontier14 wrote:
usxguy wrote:
why does everyone seem to think WN is going to do very well to Hawai'i??

With the zillions of frequent flier mileage pax they have, it is a no brainier that their flights will be full.

Frontier 14

I said this earlier as well...they don't cap redemptions on any flight, right? Their yields could be absolute crap.

fastmover · Thu May 10, 2018 9:59 pm

LAX772LR wrote:
fastmover wrote:
It’s my opinion did I say it was a fact?

Opinions can be based on fallacy.

fastmover wrote:
But do you really think the big 4 don’t pretty much control the domestic market?

Doesn't matter what I, you, or anyone else thinks... the fact (remember, that's the context we're dealing in) is that they don't have have "control" sufficiently to manipulate the pricing or composition of the market on a macro scale.

If you believe otherwise, then I'm sure the DOJ would love to see your methodology, since theirs came to a different conclusion.

fastmover wrote:
As of Jan 2018 United had the least domestic market share at 14% ALK Jetblue Spirit and Frontier combined just beat that. That is only United.

Why do you continue to conflate market size with market influence? They're not the same thing.

fastmover wrote:
If you don’t think the big 4 have a major advantage I don’t know what to tell you.

"Major advantage" at what? What does that even mean?

Here, let's break it down:
Fare manipulation-- where's the evidence for an advantage in that, in anything other than select micro-markets that don't reflect the whole?
Route selection-- the domestic market is fully open, and LoCos are highly competitive in the regional int'l route selection process.
Slot allocation-- nope, DOT/DOJ often cutout specifications for LoCo-only access to slot restricted markets.

So again, where's this advantage that seems so clear to you, but doesn't appear to show up in an analytical overview? What's being missed?

Again no need to be rude your tone is annoying.

Is the domestic market fully open?
Sure to new flights but how about gates (Atlanta or Dallas Love) or Slots?

Sure the slots are gone at EWR but you need gates.
How about Atlanta, JetBlue had a heck of a time getting gates near each other but you are going to tell me that Delta does not have much say?

Look the big 4 make up over 60% of domestic share and that’s just mainline we aren’t even talking about regionals. It’s my opinion that they are simply to big now that’s all I was saying. If you don’t like that fine but there is no need to be rude about it.

Oh

I also think

Google is to big
Facebook has to much influence
And I think Amazon is crazy big

Guess I’m not a fan of a select group of companies having a huge market share. While they might not take advantage of it now there is no telling what they could do in the future.

Again my opinion but the percentage number is a fact.

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