Analysis: Winners and Losers From Alaska Airlines' Acquisition Of Hawaiian Airlines
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- čas přidán 20. 12. 2023
- With Alaska Airlines' plan to acquire Hawaiian Airlines (announced in early December), the landscape of the commercial aviation industry in the United States could be undoubtedly altered. So which groups and airlines could benefit from the deal?
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AS employee here… winner you missed, the AS flight attendants. They are involved in very contentious contract talks, with AS FAs asking for a competitive labor contract. This merger will require labor union approval & additional language addressing the integration of the FAs from both airlines. AS can no longer say that they don’t have a balance sheet to warrant a financially competitive contract. If AS wants this merger completed in 12-18 months, they need to settle the FA contract. This puts the FA union in an excellent position at the bargaining table.
Alaska employee also. I'm hoping that holding off on the contract was a strategic move of the airline to announce the Hawaiian acquisition then get into actual contract negotiations to incorporate the HA flight attendants also for a comprehensive contract that benefits both in-flight groups.
Just like the pilot contract, the flight attendants are in an even better position due to this merger.
I heard the deal is off. Hawaiian has too many lawsuits
@@mikeyriley8959any corroborating articles for this?
As a native kanaka (Hawaiian), there’s something people don’t realize about us and Hawaiian Airlines. A majority of us (both native kanaka and non-native) are life long die hard Hawaiian Airlines customers. We stick to what’s familiar and if there’s one thing we absolutely HATE is outsiders coming in and telling us they’ll be changing things. We really don’t take too kindly to that and if Alaska thinks they’re gonna step in and do that, they have another thing coming.
My primary concern is for the employees of Hawaiian. Every single takeover in the last 60+ years has seen the dismissal and upheaval of the acquired companies employees. Many of our pilots and flight attendants reside here in Hawai’i and with the cost of living already so high, we cannot afford to be pushed out of our homes. It is as we say “being priced out of paradise”. I honestly believe Hawaiian Air stands to lose much more than market shares and a foothold here but no one seems to be talking about it.
(Potential) Loser: Delta
With Hawaiian’s long-haul fleet at their disposal, Alaska will likely try to add their own transatlantic and transpacific routes from SEA under the Hawaiian branding. This will provide Delta with much stiffer competition at an airport where they already struggle.
(Potential) Winner: Seattle residents
If Alaska uses Hawaiian’s long-haul fleet to add long-haul flights from SEA, that will provide more options at that airport.
Not only that, Hawaiian planes (at least at Sea-Tac) get parked overnight resulting in a lot of wasted utilization. I could envision Alaska co-running HA's widebodies on some Alaska transcontinental routes between it's major hubs like Seattle or Los Angeles and the east coast over night.
@@ccooperev They are not just "parked" overnight. At some point maintenance needs to be performed on the fleet and SEA is one of the stations that carries a large maintenance load.
@@cepaasch when I first started flying internationally, I was astounded to discover that airlines were keeping their 747’s in the air 17-20 hours a day. It would appear that for west coast routes Hawaiian is utilizing their wide bodies at most 12-13 hours a day. With an Alaska tie-up, they could add a SEA-LAX route and add 3 route hours to daily schedule. And maybe operate 2 concentric routes. HNL-SEA-LAX-HNL and reverse. SEA-HNL-LAX-SEA. They could similar routing for OGG to west coast cities. Since Hawaiian takes 2 gates currently at the South Satellite in Seattle, those could move to the North Satellite or C&D concourses to streamline with Alaska operations.
I would say Delta is slight winner in this case and the reason lies in why Delta sold the spot for Tokyo Haneda International Airport and gave up on PDX-HND direct flights.
@@sunglassdubsteps5268 they wanted to change that from PDX to SEA? but how does this help them?
I absolutely love Hawaiian, and I'm worried it's culture will die due to the merger. Hawaiian by far has the best service of any US airline.
holy cow that's not saying much for us airlines. have you dealt with hawaiian customer service which can sometimes be from the phillippines?
Nice video, you covered a lot of benefits that I didn’t t even think about
I'm a die hard Hawaiian Airlines customer and will continue to be one. I live in Medford Oregon and I drive to PDX just to get on a Hawaiian Airbus aircraft. I don't trust Boeing or Alaska to make good decisions for my safety in the air at this point. One step on a Hawaiian aircraft you're met with a great Hawaiian experience and it continues the entire trip. Thank you Hawaiian !!
Embraer is another winner; for replacing the 717's at Hawaiian as the Group already flies 1st generation E175's and there's very little extra pilot training needed to fly any of the E2's
Alaska has stated they plan to keep the 717s at least another 5 years. They are in the middle of updating them
Agree! Alaska’s subsidiary Horizon, which operates the E175, has much lower overhead costs and the E175 would be a good fit for the smaller islands.
either the E2 or the A220 will replace the 717 when their time comes. It depends on how Alaska treats Hawaiian given their completely different business model when compared to Alaska and their former acquisition of Virgin America. I highly doubt the A321neo's will be replaced and I can see the potential of an A321LR or A321XLR order for Hawaiian as Boeing does not serve that market segment at all
@@noahbowie5985 The problem with the E2's is that they are too heavy and push them outside of the Regional Airline Scope Clause. The Scope Clause, negotiated between the airlines and pilots, stipulates that any regional jet must not have a Mean Take-off Weight (MTOW) of greater than 86,000 lbs. The E175-E2, with it's larger engines, exceeds that by 12,000 lbs, whereas the original E175 meets that. The Regional Jet designation allows the airline to pay pilots significantly less, that why the original E175 is a big seller in the US, and why Alaska will likely replace the 717's with them and have Horizon Air fly the small inter-island routes with them.
The way I see it there are three ways Alaska can go with the interisland fleet. 1 is buy more E-175s (not e2) to be operated by Horizon, or contract with SkyWest as they already do for some routes. The problem with this is that they are not modern aircraft and it would be a significant reduction in capacity from the 717 fleet. Option 2 is to use 737s, either the MAX-7 or -8. Alaska is experienced operating 737s in an extremely short hall role, particularly in southeast Alaska. I view these two options as about equally likely, with a combined operation of 737s and E-175s perhaps being the most likely. This gives flexibility, and would follow a model they already use on other high demand short hall routes such as Anchorage-Fairbanks. Option 3 is very unlikely but would be the best for passenger experience: order the A220, as a replacement for both the 717s and the 20-year old 737-700 fleet. Alaska has not yet ordered the MAX-7, so the replacement for these planes is technically unresolved.
too early to tell. the work CULTURE between Hawaiian and Alaska Airlines is a huge factor. Hawaiians are very loyal to the brand so Alaska management will need to figure how to make the "separate but equal" thing work out (hollies aren't the best at that)
Indonesia can help with that ;)
Do you mean “haole’s”?
@@heneleb7834 if you know you know
We can look at European airlines group at that.
hollies? lol. whatever they do don't touch the name. CVS knew to do that with longs. locals don't like change
As a Hawaiian resident, I don't necessarily agree with your thoughts of residents as winners. Hawaiian was already planning to replace the 717 and since Alaska likes Embraer, the E2 195 looks like a good replacement. However, we are very concerned about shrinking the number of flights and for the inter-island service to fall to Horizon Airlines, the Alaska regional subsidiary. Horizon offers lower salaries to their employees than Alaska.
I think the status quo will hold for 5 years. Maybe by then the pilots will re-negotiate contracts and adjust the scope clauses.
Hawiian as per the deal, is 900 million in debt. It should be looked as saving the brand from extinction.
Or Hawaiian could go bankrupt and pay their employees nothing.
I am very interested given that Porter Airlines in Canada is trying really hard to become the new third player in Canada and it’s made an alliance deal with Alaska (Now Alaska Hawaiian) this opens up a lot of route opportunities in western Canada,United States and the Pacific Rim.
I feel like that partnership would be a lot more interesting if Alaska had a flight from SEA to YYZ, YOW or even MDW (to allow for a transfer to YTZ) or if Porter had a direct flight to SEA from YYZ or YOW.
Right now there aren’t many points of connections between Porter’s and Alaska’s networks, especially from Billy Bishop.
I've been trying to use One World as a flight from Montreal to Tokyo but besides shooting me over to New York where JAL flies the 777 I've been wanting to get onto a JAL 787 (the best 787 economy in the world) ((they use the 2-4-2 set up instead of the 3-3-3 everyone else uses even ANA)) The issue is the flights from YUL to ORD with decent layovers are all over the place. Hoping such acquisitions + Porter, American Eagle. Bolster One world and make them a serious player across NA for Canadian flyers.
No mention of Southwest at all? The main motivation to merge?
Embraer could also be a potential winner not mentioned. As stated, the B717/MD-95 retirement is starting to appear off in the distance, happening sooner rather than later. An Independent Hawaiian might have leaned towards Airbus & the A220, similar to Qantas’s replacement plans. However, Alaska already has a relationship with Embraer, coalescing their Horizon turboprop fleet around the E-175. This would make Embraer the Head-and-Shoulders favourite to provide the replacement from their E2 family
It may be possible for Hawaiian Airlines with their widebodies to break into east coast Canadian Markets such as Montreal or in major US cities like Philadelphia with non-stop service. Perhaps even enter into direct flights to China and Singapore.
Good to see Alaska grow and prosper.
Which is something I know Alaska wants to get into
Winner: Airport employees. Ramp, CSA’s, Mechanics. Some airports are contract and some direct hire. After the merger, all airports with direct employees will be direct for the combined airline giving more areas to transfer to if they like. 👍🏼
I fly both Alaska and Hawaiian. When it comes to customer service, Hawaiian surpasses Alaska, which is saying something because Alaska is my choice over airlines like United and Delta. On another matter, Hawaiian appeared to be moving away from Airbus wide-bodies by ordering a Dreamliner at least a couple of years ago.
My experience in the last few years is that Hawaiian's widebody 330's are a bit dated/worn and their inflight food service in economy sucks. But I do like the seats and the mood setting music they play on boarding. It's amazing. Also, for some reason there are periods of time where the 330 cabin gets very cold. I saw FA's putting on their winter puffer coats while working the aisles. One big difference between HAL and ASA is that HAL has Inflight Entertaiinment Systems and ASA uses a "Bring your own device" system.
You did your homework on this one. A perfect marriage between two highly professional and respected companies. Alaska merged Virgin America into its operations better than any other major U.S. airline did during a mega merger. . . and they did it with mostly happy employees and customers during the process. They will do it again I'm sure with Hawaiian. And for all of you out there. . . . it's named Alaska Airlines. Not Alaskan Airlines or Alasker Airlines.
Virgin America was relatively tiny, I would hope that merger would have gone more smoothly than US Airways or Continental
All in all HUGE WIN. Love it !
As a die hard costomer of both sides i can only hope to see alaska do something like they did with SkyWest and Horizon. Hopefully they will make a special livery for some future aircraft and for the 717s. What i mean is at least agnolage Hawaiians contributation to the fleet by writing “ Hawaiian “ where SkyWest/Horizon is on the other aircraft.
You didn't cover hawaiian miles holders. I'm assuming it would be a win for them? their miles could be used for one world flights
I think its really big win for oneworld and their leading now the Market in the Pacific with Fiji Airways, Qantas and Japan Airlines. United Airlines must be gretting a little nervous, thats why their need to be present in Honolulu. UA Focus must be straight their hubs in DEN, SFO, LAX. Honolulu and Cleveland should be given more Focus again and together with their Partner Air New Zealand and Air Canada. UA have from all US Airlines the efficient hubs.
Embraer will win big. Hawaiian will likely get hand-me-down E175 to replace Boeing 717 on the insular services. However the 717 will stay in their fleet for the forseen future for now, while Alaska accumulates more Embraers to eventually send the older ones to Hawaii.
I got suggested this video after the incident with the plug. Oh well how the tables have their door plugs blown and the fleet grounded...
But Alaska and Hawaiian will remain independent companies in this merger so i doubt that Alaska will sell off Hawaiian Airlines A321s since both airlines are retaining their identities
No, they going to sell those planes
They are not going to be independent; they are going to keep their brands (at least for a while). These are totally different things...
With regards to scope clauses and pilot contracts, they will be independent liveries, but the work groups HAVE to merge. So we may see fleet compatibility.
@@erauprcwa If HAL shifts to the 787 and gets rid of the A330's that would accord with Alaska's Boeing preference. The question would be what will happen to the A321LR's?
@@ccooperev Replace with the 737 Max airplanes, which Alaska is already doing with its own fleet. Hawaiian only has 18 A321 NEO airplanes, which those can easily be replaced. Train the A321 pilots on the 737 and now you have a more diverse pilot group that are able to operate in the Alaska network, which is VERY different from other airlines.
The A321s will not be compatible with Alaska's network.
Once the big 4 finished their mergers in the early 2000s, the federal govt would prevent them from buying up any more competitors. Alaska would have done better to merge with JetBlue instead of Hawaiian.
That could still happen.
@@ccooperev A Alaska/Hawaiian merging with JetBlue/Spirit would give it the scale of United Airlines. Doubt feds would essentially allow a for way merger. It would also be an integration nightmare.
would this affect their jetBlue partnership?
I support Alaska selling all the Hawaiian aircrafts. It's the main reason a lot of business people would not fly hawaiin due to no wireless internet available on their planes.. I hope this day will come sooner.
Maybe we could see Alaskan break the model of getting the E2's for their intrastate (both Alaska and Hawaii) routes since these routes are mostly run outright, thus skirt the scope clause-although it could lead to reconsidering the middle E2 in some form
Alaskan?
What about Delta's codeshare agreements with Hawaiian?
Bye bye
I’m sure Virgin American didn’t want to be forgotten but it happened anyways. | 0:53
What about Delta & Skyteam?
I would say slight win for Delta. It will re-add the Portland-Haneda nonstop flights since one of the reason Delta dropped the route in the first place was that they sold the Haneda spot to United which is now used for Haneda-Honolulu flights. Because of the Alaska-Hawaiian merger, United might drop the Haneda-Honolulu flight and sell the Haneda spot back to Delta for Portland-Haneda nonstop.
AA will not be a likely buyer since AA has recently retired A330s and AA is not interested in PW. Likelier buyers would be Delta and Jetblue
I doubt Airbus will look to UA. They have a better chance with Delta and Jetblue
I'm still waiting for an eventual Alaska - JetBlue merger to form a proper fifth major carrier.
Jet Blue is going through a merger itself with Spirit
Alaska took over Virgin and then replaced a great service with a mediocre service. The whole thing was really disappointing.
Alaska ranked above VX, not to mention VX had bad business practices that weren't sustainable. So they were gonna be bought by someone.
I'm never going to fly on Alaska airlines because they bought a fleet of Boeing 737 MAX which became a problem.
y’all are bots and not admiring how good this video is!
Really, no mention of jetBlue and Spirit and their market share? And we're actually calling Hawaii residents winners? I could be wrong, having never been there, but from talking to people and reading I always hear how Hawaiians don't want more tourism and development.
It’s Not That, We Love All Walks Of Life! It’s Just More-so The Rich International Investors That Buy Out Big Parcels And Develop Them To Make More Condominium Buildings To Live Which Drive Up The Prices Like Crazy. Honolulu Only Has Limited Space And There Is Only So Much To Build Here :(
Do not agree? DOT will have a final say in this matter ? Then you do a analysis ?
I disagree with the airbus replacements, airbus planes seem to be safer than the Boeing planes i would not like Hawaiian to become an “Proudly All Boeing” Alaska should replace the Max planes with Airbus since the maxes have lots of problems.
Not a fan of Boeing, I hope they keep Airbus.
You overlooked a major market .. the eastcoast.. if AS drops OneWorld and aligned with STAR this gives direct access to KHNL from either KIAD or KEWR. Both of which service major population centers. Anyway you look at this .. both of these airlines essentially have ignored the EASTCOAST with direct flights.
the IATA code for Honolulu is PHNL (not K). P for Pacific, H for Hawaii (PHNL, PHOG, PHKO, PHTO etc)
SINCE I AND MY FELLOW EMPLOYEES HAVE NO WISH TO BECOME BOEING AIR CRASH DUMMIES WE ONLY FLY AIRBUS.
How do you brand this merger when you have two separate cultures and two distinct market cultures? 🥴
Ask AirFrance and KLM
One world has the worst airlines - save perhaps Alaska; BA, AA….ugh
It also has the best; Cathay, Qantas, Qatar…
I hate Alaska airlines so much
me too now since they now have a fleet of 737 MAX.
@@Perich29 Thanks for comment. Now get back to your job at Airbus.
First
Second.