Moderators: richierich, ua900, PanAm_DC10, hOMSaR
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.
usxguy wrote:why does everyone seem to think WN is going to do very well to Hawai'i??
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.
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.
usxguy wrote:why does everyone seem to think WN is going to do very well to Hawai'i??
fastmover wrote:The government let the big guys get way to big and to compete
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.
Overthecascades wrote:Stocks of HA down by >10%.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
usxguy wrote:why does everyone seem to think WN is going to do very well to Hawai'i??
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.
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.
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
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?
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.
fastmover wrote:It’s my opinion did I say it was a fact?
fastmover wrote:But do you really think the big 4 don’t pretty much control the domestic market?
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.
fastmover wrote:If you don’t think the big 4 have a major advantage I don’t know what to tell you.
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.
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.
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.
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.
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.
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
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?