HAL hiring

[Jim]

Why can't Hawaiian pilots fly those turboprops, Dan?

Because as I said early, if we hadn't agreed to a subsidiary last contract, the flying would have been done by a code share with HA pilots having no minimum interisland hours protections. We tightened the scope. The company would not have given up what they already had and there was no way HA pilots were going to be flying these routes.

We understand the pitfalls of subsidary/code share flying and we'd like to eliminate them. But the cat has been long out of the bag and we're realists about what we can get back. We're trying but it's only one piece of the puzzle and there are many other equally important considerations.

You live in a dream world Wave, after of course having flown for the same type of operations you berate others for allowing prior to getting your SWA gig. We made scope gains the last contract without really losing anything. But you will just continue to pick on others scabs about something your current airline already had BEFORE you joined it. You're not trying to stimulate discussions with your constant "holy than thou" stance, you're doing nothing but taking cheap shots.

 

[redflyer65]

Jim,

Great post about what happened at HA. Some of that I did not know.

Just like you may not know we've tightened scope EVEN more after Wave and I got on the property. So it goes both ways.

I don't see Hawaiian being anywhere close to other airlines that outsourced thousands of jobs back in the day when it was uncalled for. We need to all move the ball forward and get better. There's always room for improvement and I'm happy to see it happen at other carriers.

RF

 

[HAL]

Dan,

I wasn't pointing out that Alaska would buy HA, although it's possible.

But, that Hawaiian is a cheap company...for anyone to buy. 700 million? Now I can see why Hawaiian would be an easy purchase. Successful purchase? Might be a different story, who knows.

A little bit harder for someone to buy Alaska outright. Probably the only way would be a merger for stock transaction.

Red, when was the last time a company was bought strictly for the value of its outstanding stock? Pretty much never. The fact is that in the M & A world there's far more to a company's valuation than just stock price. And that is why HA hasn't been bought yet, because the stock price has little to do with the value of a company in a purchase. If HA were to be bought, it would cost the prospective purchaser much more than $700M. Then with that additional cost, the returns on the investment (after trying to adapt the HA business model to whichever airline was trying to buy it) would come out somewhere in negative territory. As Dan has said many times here, the HA business model just doesn't work for anyone other than HA. Take that away, and it becomes another expensive hole in the wallet of whoever bought us, with no chance of a return on the investment.

HAL

 

[redflyer65]

I think you're trying to make an argument to fit what you want to happen. I think HA gets purchased. Does it cost more than 700 million? Sure. But not much more. You'd have to dig into the balance sheet to look at the debt, but still it's out there like a ripe plum. So your right. Not just the value of the stock, but the purchase price. And Gary Kelly might see it as a good deal

I'm starting to think Southwest might make a play. That's just pure speculation on my part. And it has nothing to do with where I work, just a guess. Southwest has always liked good bargains, and HA is a bargain plain and simple. Even if I'm wrong, I see someone else stepping in and doing the same. At a little more than 700 million, there are plenty of players. Delta, Alaska, and even American after they get their merger worked out. I'd put American at the low end. Maybe 35/1. They need to get their house in order. Same could be said about SW, but we are further along. DL would just have to work around the DOJ.

I know it might not be what you want to hear, but I find it more than plausible. I understand HA has a great product and one to be proud of, but that doesn't mean it's not a takeover target. We are talking business and nothing more. Not feel good, warm and fuzzy stuff. Just business. And when you look at it that way you can see things differently. And CEO's many times think that way. They run the numbers and make decisions accordingly.

I think SW will buy someone else. With 3 Billion in the bank, who's the best deal?

JetBlue? Maybe. The planes don't match up at all, but NYC is attractive.
Frontier/Virgin/Spirit? Again, wrong planes and too small of a acquisition.
Alaska? Too expensive, unless it's more a merger with stock swap. But still possible.
Hawaiian? Inexpensive and SW could easily feed the widebodies from multiple points in the CONUS..and add widebodies to points beyond. I find it the most intriguing.

Either way, going to be interesting to watch it play out.

 

[Dan Roman]

Hawaiian? Inexpensive and SW could easily feed the widebodies from multiple points in the CONUS..and add widebodies to points beyond. I find it the most intriguing.

Either way, going to be interesting to watch it play out.

Not true, again Hawaiians business plan is as a hub in HNL, it doesn't connect to SWA or any other mainland route system very well. It also get's a lot of business because it's "Hawaiian". Paint SWA on the side of the airplane and allow SWA F/A's to replace ours and you lose a LOT of what has made us successful.Same with DAL or AMR or any other mainland airline.

HAL made some great points and YOU responded with a perception based more on what you thought was a good idea rather than any basis in reality. For years and years there have been pilots that thought HA would be a dream aquisistion, the money people that make that kind of decision never seem to consider it.

 

[Dan Roman]

BTW anyone who thinks buying HA would be easy is mistaken from a purely integration/operational perspective. Hawaii is an island, if anyone thinks they could acquire the employees without giving them seniority in all Hawaii ops over everyone else they would be in for a rude awakening. An outside entity trying to muscle it's way into Hawaii would have their arse handed to them on a platter. Not just pilots but everyone. If SWA tried to do what they did to AirTran here they would create a permanent hostile work environment that would hurt them in ways to numerous to list here.

 

[Dan Roman]

Also Red, yes SWA has some money in the bank and is in good shape (not as good as Pan Am once was! ) But they don't have the money to " buy" an international route system that could compete with DAL,UAL or AA. Not going to happen. Buying HA thinking that it would elevate them into the International arena would be pathetic. HA is good at bringing people to Hawaii as Hawaiian Air, but it hardly would give SWA an "International" presence. More like making SWA a tiny and very vulnerable player is all it would do.

 

[Dan Roman]

Red let me put it in simple terms. If SWA tried to acquire HA it would cost them at least 1.5 to 2 billion. Then because of integration problems they would lose 100's of millions more. Then because SWA and HA are relatively incompatible and an AirBus hub in HNL doesn't fit so well they lose millions more. Next thing you know they have gone through that 3 billion. Still think that's a good idea ?

 

[waveflyer]

Four separate posts, my friend.

It seems we all have discovered what you fear.

There is nothing to "fear" except....

 

[redflyer65]

Dan,

I'm headed out the door shortly, so I didn't dig into each post but let me just say this..

My post WAS just speculation on my part. I tried to convey that. It was in no way meant to stir the pot with you or any HA guy. Just industry speculation and what I think may be coming down the road.

 

[orangebellyav8r]

Dan

SWA and HA folks will have no voice in it if it happens. It is pure wall street and GK boys. Just like AirTran.

 

[HAL]

red/wave/orange, let me put this into a strictly business sense - not related to any 'wish' we have to stay separate. The question is - why would anyone buy Hawaiian? The answer is that it would either a) provide an increase in revenue to make the business grow, or b) provide feed to the current system of the purchasing airline, or c) reduce competition, to allow higher fares for the purchaser.

For a), the problem is that unless the purchaser left HA completely alone as a separate airline, there would be no increase in profits. The ONLY reason HA is profitable is its current business model. HA charges more per seat on average than the competition, and the only reason they are able to do that is the very specific service model they provide. People are willing to pay more to get better service - our current business model proves that. Do you see SWA suddenly agreeing to charge more and provide free meals on its flights? Do you see SWA staffing flights with more than the minimum required number of FAs? Do you see SWA providing passengers with all the amenities that HA does on its longhaul flights? No. If SWA (or any other current U.S. airline) were to buy HA they would change their service & business model to fit into their own, and suddenly all that extra fares HA charges would have to go away, and so would its profits. Like Dan has said so many times before, the business model of HA wouldn't fit into any other airline. Take that business model away, and suddenly HA becomes a money pit that no other airline would touch.

For reason b), that same business model of bringing people to Hawaii wouldn't fit in connecting passengers to feed the purchasing airline, because the flights arrive on the west coast too late to do anything with them, other than put them up in a hotel. Change the departure times, you say? Fine. Then you've killed the business model, because (as we've discovered) most passengers don't want to get up at 5am in Hawaii to catch an 8am departure. We've tried, and with a couple of exceptions, it didn't work.

And for reason c), none of the potential suitors for HA would consider our flights to be competition. SWA certainly isn't flying any of our routes, and if AS or UA or AA or DL wanted to buy us, it would be cheaper to simply put more of their own planes on the routes that go through the expense of trying to buy us. It simply wouldn't be worth the cost of buying us when it would be cheaper to simply add more of their own flights.

So from a business sense, a merger - especially with SWA - just doesn't make sense. If you have other business related reasons why it would, I'd love to hear them.

HAL

 

[Dan Roman]

Four separate posts, my friend.

It seems we all have discovered what you fear.

There is nothing to "fear" except....

LOL, no I think you are making SWA more imortant then it is in this discussion. It really isn't a fear for me. In fact if any merger actually did happen with anyone, I would be retired by the time the dust settles. I enjoy these posts because they are A) about Hawaiian and B) I've got reality on my side. Call me General Dan, but I'm WINNING!!!!:beer:
HAL said it better than I, but read his post. It's not speculation, it's simply some relevant, irrefutable facts. SWA more than anyone simply doesn't fit into HA's business plan. Again, not my opinion, just a simple observation.

 

[Dan Roman]

Dan

SWA and HA folks will have no voice in it if it happens. It is pure wall street and GK boys. Just like AirTran.

True statement that. SWA has enough money to get itself in trouble with bad merger decisions. Think USAir, Piedmont, PSA.... USAir and Piedmont were in as good as financial shape as SWA is now, once they merged it started a down spiral. I think your "Gary" is smarter than that.

 

[Dan Roman]

Your turboprop is wholly owned is it not?
You don't think that'll put downward pressure on things?

This has all been done Dan- why go down the same road spitting out the same arguments that led to all the outsourcing in the mainland?

I missed this one Wave. Small turboprop feed is a good thing for everyone. It doesn't cost jobs at all, it creates them. It feeds mainline from markets that would have not had air service in many cases. This requires more mainline seats, I.E more jobs. When DAL allowed RJ's they muddied the line on that one and now the cat's out of the bag with regional's costing jobs at mainline.
Hawaiian has not and definitely won't cross that line. We do know how to protect Inter-Island flying and it's enough of our heritage that protecting Inter-Island will always be of prime importance.