Speculation arose again this weekend about the possibility of Alaska Air being acquired by American Airlines.
Alaska, which has of recent become a very significant player here in Hawaii’s skies, is valued at $1.5B, which makes it small enough to still be easily digestible.
This news of course comes hot on the heels of the announcement that the long-awaited marriage of Continental and United will come to fruition. I’ve believed for several years that once a second major consolidation occurred (following the Delta/Northwest merger), the pace of subsequent industry plays would quicken considerably. That time has arrived.
Hawaiian is much smaller than Alaska, with a market value of just under $400M.
My thought is that Hawaiian, which has never denied interest in being acquired, may not remain independent much longer. Here were my thoughts nearly a year and half ago:
“…Discussing Hawaiian’s Airbus order last summer, I remain skeptical about their ability to stay independent in the long term. This is in no way a reflection of anything wrong at Hawaiian, it is merely the state of the airline industry. I consider their future aircraft orders as a backup plan contingent on the larger question of company ownership. While airline consolidation seems to be taking a breather for the moment following the Delta/Northwest deal, I hardly think we’ve heard the last on the subject.”
Hawaiian and Alaska: Strategic Differences.
Hawaiian took delivery last week of their first Airbus A330, which will go into service on their Honolulu to Los Angles route next month. It is the first of three leased A300’s joining their fleet this year. Hawaiian has also indicated interest in serving Asia and Europe.
Two years ago I first questioned Hawaiian’s lack of smaller, more flexible aircraft for trans-Pacific service.
I continue to wonder if that wasn’t a strategic blunder. Alaska is nimbly using those smaller planes (737’s) to move into Hawaiian’s home turf, the Pacific Coast to Hawaii, with a vengeance.
Recently, for example, Alaska added a second Seattle-Kona flight that will operate from November through April, to supplement their year-round Seattle-Kona service. That’s flexibility.
And, as a point of reference regarding fuel cost, Alaska’s 737’s are approximately one-third more fuel efficient than Hawaiian’s new A330’s. That’s simply a huge difference.
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Sandi Swanson says
Well I obviously do not know the difference between a 747 and a 757 and my question was “What do you think of Allegiant expanding their fleet and flying to Hawaii??? The Airport in Bellingham, WA is closed for 3 weeks in September to make way for the ‘larger’ planes (I will call them that now, don’t want to make any more faux pas!!!
Oliver says
By the way (since i am currently in HI), it was interesting to see the splash the new A330 arrival made in the local media. The local evening news broadcasts all seemed to cover the story and the Star Bulletin dedicated half of its front page to a photo of the new aircraft. Hawaii really has a special relationship with its airline and I for one would be sad to see it absorbed into one of the mega carriers.
Oliver says
@Sandi – Allegiant purchased 757 aircraft, not jumbo jets (a term most commonly used for 747 and sometimes for other large wide bodies). A huge difference in size.
@Jeff – don’t feel like wading into the territory of Airliners.ccom and the argument of Boeing vs. Airbus fanboys carried out there. But I am not sure that it’s quite as easy to say that the Boeing is X % more efficient than the Airbus. Surely that depends on a number of factors such as cargo load, length of flight, …
Yes, Alaska may have more flexibility in that they can remove one aircraft of two from the route you listed. But on the other hand, they have to operate TWO during the peak season when it would maybe be more efficient to operate just one larger one (but Alaska doesn’t have THAT flexibility with their one-size-fits-all strategy, which might also hurt them in the Alaska summer season when the cruise dump thousands of pax into Anchorage for flights back to e lower 48). So a fleet with different size aircrafts might be ideal, except then yup run into higher maintenance cost as you need parts/staff for different aircraft types.
I am not an expert, so I don’t claim to know what the right answer is. Maybe Alaska and Hawaiian could merge, and then they’d have the flexibility they both lack individually 😉
So who do you think would be interested in buying Hawaiian? Delta?
sandi says
Interesting observations … will wait to see how clear your crystal ball is / was.
Sandi Swanson says
What do you think of Allegiant Air purchasing 6 jumbo jets and their plans to fly to Maui & Oahu?
Jeff says
Sandi,
We’ve written extensively about Allegiant’s Hawaii plans. Feel free to search our site for the various articles.
Aloha, Jeff