Cranky on the Web: Alaska/Virgin Merger, Airline Earnings, LA Deep Dive

Cranky on the Web

Cranky on the Web

The Alaska-Virgin Merger with Cranky Flier [Podcast #15]AirwaysMag
I sat down with the Airways podcast crew for an hour-long session of shop talk. We did start with the Alaska/Virgin America merger, but we moved on to airline quarterly earnings, and finished with talk about Air India’s future. You can listen in here.

Los Angeles Aviation with Cranky Flier [Deep Dive #5]AirwaysMag
As if you aren’t sick of me yet, here’s another one. After the regular podcast, we sat for a 40 minute deeper look at aviation in the Los Angeles Basin. If you have nothing to do this weekend… you’re welcome.

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8 comments on “Cranky on the Web: Alaska/Virgin Merger, Airline Earnings, LA Deep Dive

  1. I was surprised to find posts here today but see the reason…. I fast forwarded thru both podcasts and found a few things worth commenting.

    The concessions for the approval of the AK/Virgin merger are clearly significant or AK would have accepted them. There is lots of speculation but not much fact.
    AK has turned to AA to backfill the declining relationship with DL. It is not a surprise that the DOJ might be focusing on AA-AK codesharing given that it covers nearly all of their network up and down the west coast. There is no reason for a carrier that says it is the world’s largest airline to need to codeshare with another domestic carrier.

    AK and DL are likely both ready to part ways – and it will be mutual if it happens. both sides have benefitted and lost from the relationship and the same will be true when it ends. The real issue is what can replace the benefits for both sides. It is very likely that DL will engage in another round of aggressive expansion at SEA so I’m not sure the loss for them will be that much. The lost benefit for AS may be the ability to serve some of DL’s markets such as ATL and MSP as much as they do now without being able to codeshare behind it.

    Love Field is an issue to the merger only because Virgin is not anywhere close to using the gates it has while both DL and WN have said they want to add more capacity. It looks very much to outsiders that AK is simply blocking further competition for AA if the Love Field gate issue is not resolved. AK can’t compete more aggressively against WN at Love Field without impacting AA at DFW. There is a conflict of interest in allowing AK to retain gates at Love Field unless they are fully utilized while also allowing them to codeshare with AA esp. via DFW.

    As for LAX, AA’s aggressive international growth esp. in the Asia/Pacific region has been impressive but it doesn’t take too long looking at AA’s traffic reports to see that they are simply reallocating capacity from Latin America and Europe to developing their Asia route system. DOT data shows that AA’s average fares from continental US to Asia are far below DL and UA’s and that trend is equally present in LAX.

    DL will gain more gate expansion capacity at LAX than any other carrier beginning next year. AA might have locked up the best international markets at LAX right now but it is far more likely that DL and UA are making money on the international routes they do fly while DL will have the ability to continue to grow major domestic routes whch it can’t now serve from LAX because of space.

    First and foremost US airlines are for-profit companies. Individual routes might be fascinating to av geeks but the bottom line performance is all that matters to investors.

    Codeshares
    Love Field

  2. The Basin ?!

    I went to drop off a person at LGB this morning. There was quite a backup due to construction on the median in front of the terminal, so I went to the parking garage thinking I’d make use of the free first 20 minutes; then on exit I found out that this doesn’t exist anymore, so I ended up paying $2 for 10 minutes of parking.

    When did the free 20 minutes go away? And wouldn’t it make sense to reinstate it when the pick-up/drop-off area is cut in half due to construction?

    1. Ron – I think they’re removing that median entirely, but yeah, I doubt anyone thought about the parking impact. I want to say that free buffer went away last year, but I don’t remember exactly.

  3. Removing the median entirely? This sounds kinda silly, given that it did serve a useful purpose, adding pick-up and drop-off space. And what use would the wider roadway be, other than encouraging drivers to speed up?

    1. Looks like I was wrong. Found out today that the median removal plan is in the distant future as part of a bigger thing. Right now, they’re just fixing it up and making it nicer and safer.

  4. “The LA Basin” historically refers to the portion of Los Angeles south of the Santa Monica Mountains. It excludes the San Fernando and San Gabriel valleys, thus “The Basin” includes neither BUR nor ONT. LAWA, a department of the City of Los Angeles, ran ONT like a colonial power, one conflict of interest to the next. It was a part of the LA Basin in the same way French Guiana is a part of Europe. According the the USGS, LA Basin technically includes the Orange County coastal plain, so the phrase is good for a discussion about LAX, LGB and SNA, not to mention Surf Air’s HHR service.
    The term is pretty far off the mark for the apparent subject of the Greater Los Angeles Airline Market podcast. Please advise your AirwaysMag colleagues, who are trying painfully hard to sound hip and sophisticated: they need to just relax and speak directly about what they know, which will give their podcast a lot more authority.

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