Delta restarting SEA to ANC and LAS

[johnsonrod]

Alaska doesn't want to play ball - so, Delta should just buy VA at a low price and be done with it. Increase SFO and LAX strength and plenty of already-operated Airbus airplanes that could be easliy integrated. Then flood the West Coast with capacity (focus existing VA A319s/20s on connecting the dots within the West Coast and to Delta's major hubs) and use newly acquired 747-400s (rumor) for connections to Asia, Hawaii and Europe from Seattle, Portland and Anchorage. Put a 747-400 with "cheapish" seats on the Portland to Honolulu and Seattle to Honolulu routes. How do you like them apples?????

 

[RNP.15]

Alaska doesn't want to play ball - so, Delta should just buy VA at a low price and be done with it. Increase SFO and LAX strength and plenty of already-operated Airbus airplanes that could be easliy integrated. Then flood the West Coast with capacity (focus existing VA A319s/20s on connecting the dots within the West Coast and to Delta's major hubs) and use newly acquired 747-400s (rumor) for connections to Asia, Hawaii and Europe from Seattle, Portland and Anchorage. Put a 747-400 with "cheapish" seats on the Portland to Honolulu and Seattle to Honolulu routes. How do you like them apples?????

How much money is Delta willing to lose? Good luck.

 

[Noserider76]

Alaska doesn't want to play ball - so, Delta should just buy VA at a low price and be done with it. Increase SFO and LAX strength and plenty of already-operated Airbus airplanes that could be easliy integrated. Then flood the West Coast with capacity (focus existing VA A319s/20s on connecting the dots within the West Coast and to Delta's major hubs) and use newly acquired 747-400s (rumor) for connections to Asia, Hawaii and Europe from Seattle, Portland and Anchorage. Put a 747-400 with "cheapish" seats on the Portland to Honolulu and Seattle to Honolulu routes. How do you like them apples?????

I won't be a war. Both airlines will use the codeshare to drive their own traffic until it warrants a flight on their own aircraft. DL will expand in the West. AS has/will use the codeshare to exand into markets it currently doesn't serve. I think it'll be a win for both.

 

[txav8r]

I think it's as simple as they are pretty much done building NY and they're now filling the last real hole in the network which would be the West, SEA and LAX.

I thought Delta filled that hole back in 1986...when they bought Western. Lots of flights to Alaska, crew bases in SEA, PDX, SFO, LAX,SLC gained in that deal, widely referred to as the best airline merger ever.

 

[General Lee]

How much money is Delta willing to lose? Good luck.

A couple more widebodies a day on the SEA to ANC route would make another airline lose even more. Just sayin.....


Bye Bye---General Lee

 

[Noserider76]

I thought Delta filled that hole back in 1986...when they bought Western. Lots of flights to Alaska, crew bases in SEA, PDX, SFO, LAX,SLC gained in that deal, widely referred to as the best airline merger ever.

Ha! Yes they did. DL was the biggest carrier in LA post Western merger before they moved the fleet back to fortress Atlanta. This time I get the feeling they won't be satisfied until they fill the hole in the West. They pretty much have to if they want to compete with new UA and AA for big corporate contracts.

 

[Scoot 11]

I'm genuinely curious why you think overlapping a few of Alaska's routes with one flight a day is RA forcing his will on the AS board. AS overlaps DL routes, and we were the ones who encroached on their turf first.

But I agree that something is up with all of this addition DL flying in the west.

RA isn't happy with the codeshare AS has with AA. AS has proven to be a slut when it comes to codeshare. It's now becoming more of a competition with AS to DL than a relationship with codeshare. (I hope that makes sense)
Look for more north south feed on the west coast. Like LA-SEA.
I've even heard rumblings of a possible (737) SEA base.
Interesting times indeed.

 

[CesnaCaptn]

RA isn't happy with the codeshare AS has with AA. AS has proven to be a slut when it comes to codeshare. It's now becoming more of a competition with AS to DL than a relationship with codeshare. (I hope that makes sense)
Look for more north south feed on the west coast. Like LA-SEA.
I've even heard rumblings of a possible (737) SEA base.
Interesting times indeed.

What changed with the codeshare with AA that DL isn't happy with.

First of all, AS has been whoring for as long as I can remember.

Second of all, AS was codesharing with AA when this new enhanced codeshare with DL started.

 

[Andy]

I don't see this entirely as a shot across AS's bow.
I've noticed that almost all new routes announced by airlines both originate and terminate in cities served by Virgin America (VX). These two routes meet that criteria. It just looks like another way to scrape off a couple more points of load factor off of VX. So if you live in SEA, you can either fly direct to ANC/LAS via DAL or connect through SFO or LAX via VX.

Alaska doesn't want to play ball - so, Delta should just buy VA at a low price and be done with it. Increase SFO and LAX strength and plenty of already-operated Airbus airplanes that could be easliy integrated. Then flood the West Coast with capacity (focus existing VA A319s/20s on connecting the dots within the West Coast and to Delta's major hubs) and use newly acquired 747-400s (rumor) for connections to Asia, Hawaii and Europe from Seattle, Portland and Anchorage. Put a 747-400 with "cheapish" seats on the Portland to Honolulu and Seattle to Honolulu routes. How do you like them apples?????

I'm going to assume that you mean Virgin America. VA = Virgin Australia. VX = Virgin America.

No one's going to buy VX. I've been following them closely for the last 3 years hoping that they'd do an IPO because this company is unable to turn a profit in spite of load factors in excess of 80%.

Their net stockholder equity at the end of 3Q2012 was -$579M.
Their long term debt is $823M.
Their current liabilities are $257M.
Their leases are some of the highest in the industry (comparing comparable equipment), paying more than $11,800/day/aircraft in lease payments.

While they've been paying some of their interest quarterly, a large chunk of it has been rolled into long term debt. Virgin Group is probably allowing their interest payments to be rolled into long term debt. The other investor in VX is VAI Partners, mostly comprised of Cyrus Capital Partners after Black Canyon sold its stake in the airline back in 2010. Cyrus Capital only has $2.1B assets under management so they are probably currently drawing interest payments and I suspect that there are some additional lines of credit that they are also paying interest on.

VX's CEO reminds me of The Boy Who Cried Wolf; in his case, it's The CEO Who Cried VX Would Be Profitable 'This' Quarter. He's made that statement just about every quarter in the last 4 or 5 years. The only profitable quarter that VX has had was 3Q2010.

There was a rumor floating around last September (I quote): Rumor : A few sources have said that VX has been given the ultimatum of turning a profit in 1 year or they will be shut down by the investors. The sources also said that all new plane orders are going to start being deferred and or cancelled. Anyone hear anything like this ?

We all know VX is struggling but Cush keeps promising profits that never come. Not sure what is next for this company.

I didn't pay attention to the rumor until VX announced aircraft cancellations in November. While the rumor will never be able to be confirmed, it's looking like there may be something to it.

VX's load factors are looking pretty grim for 4Q2012. Only Oct and Nov domestic numbers have been posted so far but VX's Oct loads are 1.47% lower than 2011 and Nov loads are 6.93% lower than 2011. VX burned through $14M in cash 4Q2011; the poor loads indicate that VX likely burned through more than $14M in 4Q2012.

VX's problem is that it's going through cash faster than Charlie Sheen on a Vegas bender. And while 4Q is looking bad, VX's 1Q has always been their worst quarter.

Without another $100M or so, I doubt that VX can survive past 2013. This company has been around more than 5 years and has had load factors in excess of 80% during most of its existance, yet only turned a profit in one quarter. If they haven't been able to be consistently profitable in the current environment, I don't see any hope for them.

 

[redflyer65]

Their leases are some of the highest in the industry (comparing comparable equipment), paying more than $11,800/day/aircraft in lease payments.

Wow. That's a pretty large number to overcome, everday, day in and day out.