Although Alaska Airlines plans to keep Hawaiian Airlines as a separate entity, I wonder if we might see Alaska Airlines operate widebody aircraft for the first time in a move that could transform the dynamics of Alaska’s transcontinental service.
Might Alaska Airlines Start Operating Widebody Jets?
Yesterday, Alaska unexpectedly announced it would purchase Hawaiian Airlines. Live And Let’s Fly was first on Boarding Area to report this. The most interesting facet of the merger, which will face intense scrutiny from the Department of Justice, is that the two carriers will remain separate brands (with a shared operating platform and common loyalty program):
“The expanded airline will maintain both industry-leading Alaska Airlines and Hawaiian Airlines brands while integrating into a single operating platform and loyalty program.”
Interestingly, Alaska Airlines hints of a “potential to cross-fleet widebody aircraft on high-demand long-haul routes not currently served.”
At this point, I’m not predicting we will start seeing 787-9 Dreamliner service between Alaska and London or Paris, but I do wonder if we might finally see Alaska meaningfully compete with its peers on transcontinental flights.
Right now the product, even in economy class, is not all that competitive. Sure, you can generally count on friendly service, functioning wi-fi, and a great buy-on-board program in economy class, but those Boeing 737 aircraft are not ideal for flights of 5-6 hours. In the premium cabin, there is simply no comparison between a recliner seat with 37 inches of pitch and a lie-flat seats that American, Delta, JetBlue, and United offer on head-to-head routes.
So I wonder whether part of this merger plan is for Alaska to deploy widebody aircraft on its busiest transcon routes in a way that those aircraft can be better utilized?
As for Hawaiian flying, we book a lot of Hawaiian travel at Award Expert and it never ceases to amaze me that clients will often pay double or even triple to fly on a Hawaiian A330 versus another carrier that does not have lie-lat seats between the US Mainland and Hawaii. Hawaii may be a leisure market, but there are deep pockets and folks like bigger seats.
Finally, although a loyalty program merger may be months or even over a year away, you might want to consider the implications of moving American Express Membership Rewards points to Hawaiian Air, which might become Alaska miles. If I was sitting on a huge balance of AMEX points, this is certainly something I would consider in the months ahead (today is far too premature).
CONCLUSION
Alaska Airlines plans to acquire Hawaiian Airlines and has hinted at the potential to “cross-fleet widebody aircraft.” That was my immediate thought the moment I learned of the merger and I think this makes a lot of sense if Alaska Airlines wants to grow beyond its all-737 business model.
Might the new AS move widebodies to seasonal ANC service?
Doubt it. There’s zero competition for lay-flat seats to Alaska. Much more likely to move them to LAX/SFO-NYC and similar, where they’d be more on par with UA/DL/AA.
Bet they wish they kept the Virgin America name now. The branding of this combined airline is dysfunctional at best. Of course they will combine them eventually, despite what they say now. Let’s hope they do a better job then they did wasting away Virgin America and finally get their heads out Alaska as a brand.
The Virgin name came at a high yearly licensing fee. Cutting the name was partly a cost saving move.
Some passengers think that lie flat seats are not needed on non-red eye transcons.
Cross utilization of 787 and A330 makes keeping separate brands more difficult. Perhaps most of the widebodies should remain Hawaiian but they will probably be rebranded as Alaska. That leaves the 717 as the likely retaining for the Hawaiian livery.
Hawaiian has a much stronger name in Hawaii, stronger in the Pacific, mainland for Hawaii travel and Alaska has a strong name in Seattle. To me, it’s easier to win over Seattle but corporate egos are in play.
I’m aware, and of the subsequent lawsuit by Branson. The reality is that it was a foolish fight by Alaska and a huge mistake. The fees would have been more than offset by a superb brand name that would have far more recognition around the country. I would venture to say that Alaska would be significantly larger by now if they had become Virgin.
Any thoughts of sending transferable currencies to HA for when they merge FF programs?
I did mention that. 😉
If they notice this phenomenon, maybe they will adjust the transfer ratio to a fraction and not 1:1.
I meant eventual exchange ratio between HA and Alaska points
I would not bet on AS ultimately using wide bodies on transcon routes. None of its markets really justify that much capacity and premium haul, not even NYC. A more likely scenario is AS using some of the wide bodies to fly TPAC and a small number of TATL routes, but that’s about it.
I wouldn’t rule out seeing a few “tag” flights using widebody aircraft (i.e. HNL-LAX-JFK or something like that), but I don’t know that you’ll see much more than that, given how AS has historically marketed its transcon service.
“Finally, although a loyalty program merger may be months or even over a year away, you might want to consider the implications of moving American Express Membership Rewards points to Hawaiian Air, which might become Alaska miles. If I was sitting on a huge balance of AMEX points, this is certainly something I would consider in the months ahead (today is far too premature).”
This is an interesting thought to ponder. However, I wouldn’t put it past AS to somehow disqualify transferred points from moving over to the new combined program, or at least substantially devaluing Hawaiian Miles before the conversion to discourage people from trying to convert MR points to MP via the back door. AS have shown themselves to be wholly untrustworthy when it comes to their loyalty program, given the constant no-notice devaluations and stealth changes over the last few years. Nevertheless, as someone who’s accumulated a sizeable stash of MR points, it’s something I’ll be watching closely.
As for the fleet, there’s several B787s in the Hawaiian pipeline. As least 2 or 3 would be based in SEA for transpacific and Euro service. The B787 would be ideal for this. Lay flat seats would be the draw. The rest deployed via HNL as the A330 are phased out.
The A321 jets could be swapped out with B737MAX jets just like the Virgin Atlantic situation.
The B717 could hang on for a few more years, but B737 (inexpensive NG series) would be the replacement just like WN is doing today with inter island service.
As for the overlap in service between Hawaii and along the west coast (see map above), Alaska would use the surplus to penetrate deeper into the mid west via frequency as opposed to twice a day service to airports which would draw more business PAX.
I have dreamed for a long time about what it would mean for Alaska to quit being (essentially) an all-737 airline, and get some long-legged 787s. This merger with Hawaiian looks like a big step in that direction.
With 787s, Alaska could easily fly nonstop from SEA to anywhere in Europe (for the geographically challenged: Seattle is closer to Europe than any other city in the western US, except ANC…because you don’t fly east from SEA (or SFO, or LAX) to get to London or Rome…you head north). The shortest way to Europe from the western US is over the pole. SEA is also the closest mainland US city to much of Asia.
Alaska has done very well serving sunny leisure destinations throughout Hawaii, Mexico, and more recently around the edges of the Caribbean and Central America. With 787s, and with Hawaiian, they now can reach all over the South Pacific (French Polynesia, the Cook Islands, Samoa, even Australia and New Zealand). Those destinations are all currently served from Hawaiian’s hub in Honolulu, but there’s surely some demand for direct flights between these places and the US mainland (arguably, more demand to/from the continental US than just Hawaii). Hawaiian also serves both Korea and Japan, from Honolulu. Looking at their existing combined routemap, the relatively short distance across the North Pacific between SEA and TYO (also SEA and ICN) makes a more direct route a no-brainer. IF YOU HAVE 787s.
Take a look at the Alaska Airlines web page about the merger. Scroll to the images at the bottom of their pitch. Take a good hard look at the last image, the one they finish on: you see Tokyo in the foreground (the red-and-white “Eiffel Tower” is a Tokyo landmark). But that big, snow-capped mountain in the background…that is not Mt Fuji…that is Seattle’s Mt Rainier.
That they finish their big announcement with this photoshopped mashup of Mt Rainier looming over Tokyo is a not-so-subtle hint at Alaska’s aspirations. It’s a big, audacious dream – can they pull it off?
If I was Boeing, I would expect a call soon from Alaska Airlines inquiring about placing an order for some of those long-legged 787s. Of course, they’re not going to use them on transcon domestic flights to Boston or Austin. They’re for crossing oceans (and maybe for crossing the Arctic on the way to Europe).
This is going to be fun. Giddyup!
Very interesting analysis.
The photo is Mount Fuji, not Mount Rainier. I compared the contour and Rainier is slightly more flat on top
You may well be right about the mountain…it’s hard to be certain, as mountains can look quite different from different angles/perspectives and during different seasons/conditions. And to the Seattle-based staff of Alaska Airlines, whatever that mountain really is in the photo, it’s going to remind them of their own local mountain and the potential for connecting them.
That said, all of my analysis above still stands.
In fact, the more I think about it, the more brilliant (and sneaky) this move looks. I know it goes against the conventional wisdom that AS is risk-averse and has been cutting back recent expansion plans (maybe that’s because they are now looking to expand in a much bigger, more significant way?). If they really want to expand, it’s hard to imagine a bigger, more aggressive move they could have made.
This may be all (0r primarily) about airframes, planes that they would need to acquire in order to transform AS from a regional player that dabbles with a handful of fun-in-the-sun leisure routes, to a significant player in international flights. Where do you get those planes?
It’s a daunting time for any airline shopping for new longhaul aircraft. Post-pandemic demand for leisure travel is exploding (been to Italy lately?) and airlines’ demand for planes with long legs for thin routes is sky-high. And for Proudly-All-Boeing airlines, it’s an especially dreadful time to go airplane shopping. 787 deliveries have been long delayed (don’t even ask about 777X deliveries), and for any airline ordering new frames, those planes will come with a significant delay. Buying another airline that has a bunch of 787 deliveries coming up soon is one clever way of jumping the line.
Worth noting: I believe that Hawaiian Airlines put in an order for up to twenty 787s (12 firm orders and 8 more options). I believe one is being readied for service in the Spring of 2024, but most have not yet been delivered or even finished (painted). Meanwhile, from what I’ve read elsewhere, Hawaiian has been having problems filling planes on its longer routes. New owners will be thinking about how to best utilize new airframes.
This probably wasn’t only about jumping the line and getting a bunch of new 787s, but for those driving this acquisition, that alone has got to have been a great incentive to get more creative with the overall plan – it opens up dizzying possibilities for Alaska going forward. I’m sure there are lots of other things that make this attractive to AS leadership, but getting deliveries of 787s in just weeks/months, instead of many years ahead? That’s gotta put smiles on their faces and set them to thinking about Some Very Interesting Things.
I have a feeling Boeing’s paint shop may have to rejigger their plans for some of those Hawaiian planes. (Hello, Charleston? Order more blue paint, hold the red!)
This merger has been in the works for years back when Inouye and Stevens were around this was a dream of theirs. Fast forward I am certain beyond anything that wide body transcontinental and Europe is in the back of many people minds. Good for them. Let’s hope Ben can manage this possible merger.
A sub-fleet of 737-MAX9 with lie flat seats for red eye transcons from LAX and SFO is a leap but sending a 787 to test the market is cheap. If not successful, they can be redeployment to Hawaii.
That’s the beauty of Alaska+Hawaiian.
Alaska is hoping they do better than with Jet America in Long Beach or Virgin America in San Francisco.
I’m kind of curious about the potential regulatory scrutiny of this acquisition/merger. Both airlines are heavily regional and that region happens to greatly overlap. Neither has any significant presence in the eastern portion of the country, which accounts for a little less than half of the US population. Given the number of routes on which these two are the only competitors and lacking significant complementary service that they could leverage to help consumers, I’m a bit skeptical that it goes through wholesale. It probably goes through, but there may be some requirements that they divest from certain routes or something similar. On that note, it is strange to me that Alaska keeps Hoovering up western airlines rather than trying to use an acquisition to establish a larger presence on the East Coast.
I still thought a JetBlue – Alaska merger made more sense. Maybe JetBlue and Alaska will still merge even if the HA-AS and B6-NK mergers goes through.
I totally agree, their route networks are complementary and would stand a far better chance at creating a fifth big, national carrier (if you consider Southwest as such, which I do).
I could see there being room for 2 distinct brands under the Alaska umbrella for sometime; I think each airline has a fairly strong and proud local customer base and their liveries are already similar. That said, while I maintain my highest status with Alaska, having done several transcons, I had planned to explore the waters of other carriers offering lie-flat seating and AVOD, as the hard product is just not great in any cabin for 5+ hour flights.
My last transcon on Alaska was a rush from office to airport and did not have a chance to grab food or load content to the tablet, and no upgrade combined with strong headwinds. Net impact, the appeal of UA/DL wide-body with a stop suddenly became much, much more appealing. If AVOD or lie-flats never come to narrow-bodies, than I’d love the option of a AK or even a HA continuation flight from LAX to the east coast (D.C).
I actually think this would mean more international destinations for Hawaiian, particularly to Asia. With the feed from Alaska, Hawaiian could launch flights to some more destinations in the Pacific. Honolulu could become a one-stop hub for certain routes from the Western U.S. to Asia, kind of like Reykjavik and Icelandair. We could also see Alaska using this to create a more premium product offering on some 737 MAX aircraft for transcontinental flights. Also, I think we might see something like AS getting some widebodies for international flights, but having the pilots come from Hawaiian or something. It wouldn’t be a major cost for some widebodies to come into the Alaska brand if Hawaiian already operates the same ones.
It would also be nice if they both had a strong partnership with Jetblue. All three airlines are complimentary and focused on quality offerings. That would be a great merger.
What are possibilities for the 787?
How about Seattle to existing Hawaiian cities, such as Osaka or Fukuoka, which has some tech companies?
How about expansion from Honolulu, such as Taipei Songshan, Kaohsiung, Busan, Hong Kong or Melbourne? Better connections between foreign cities and US cities through HNL is also an area for growth.
How about red eyes from LAX, SFO, and SEA to JFK with the daytime departures still 737’s?
So, Hawaska or Alaswiian?
This is a tough landscape to predict long term. HA has the legs but is the subsumed partner. AK, the daddy, is likely still roiling about the possibilities of going toe to toe with the big three (US) boys. For now, I’m having a tough time visualizing how this drastically moves the needle. I don’t see Delta, American or United shivering in their boots.
I think you’re right, which is why this particular merger will go through.
Thank you for your coverage of this angle of the story. Sometimes I feel like I’m the only one who cares about widebody vs. narrowbody comfort (I prefer widebody flights even when in economy and the seats would be the same!).
Alaska is a conservative airline. I don’t see them keeping their a330’s. 787’s are going to be enough of a wide body airplane. How about the Max series with so many on order?
Per CEO Ben Minicucci, it’s no longer a question of “if,” but WHEN Alaska will begin using B787s for long haul international flights out of Seattle.
SEA is the one hub where DL loses money, and they only do well on their long hauls there. Once AS starts, those DL flights become very unprofitable very quickly.
DL should be very, very nervous about their SEA hub right about now. Of the top 25 markets
in the U.S. the big four have 50% or greater market share in 23 of them. The two they’re missing? SEA and HNL. And with the closure of this deal, AS will have over 50% market share in HNL to go with the over 50% they already enjoy in SEA.