Hawaiian

[jmreii]

I think Deta or someone Delta sized will end up with Hawaiian eventually, but first I think their will be a tie up amongst smaller players. JetBlue/Hawaiian seems like it could be a very good fit.

Many airlines have bought other airlines only to have never benefit from the acquisition because the customer service at many airlines are poor. Hawaiian is one of the best in customer service in which is better than many big carriers with the service skills of a wild hyena with rabies.

 

[HAL]

Dan, money talks. And if DL were to buy your airline, I doubt they would take flights out of Hawaii. You just never know, but the fleets sure do match. Also, SEA residents probably should also have a shot at HND, and not Kona. You have 17 flights a day from HNL to Kona, which means plenty of chances to connect. How do you connect from HND to SEA? You really can't. It's up to the Gov't I guess. SEA and LAX were the top two choices for DL in the first place, and they awarded DTW, which hasn't done well.



Bye Bye---General Lee

General, the logic I see (and yes, I'm an idiot for using the words 'logic' and 'airline management' in the same post) is that in today's airline market you buy another airline in order to add profitability to your airline, not to reduce competition. This is because in most markets there isn't that much competition anyway what with the former big six (or seven, or eight) are now down to the big three. The cost involved in a merger will never come back in the way of increased fares via reduced competition. So airline managements today are looking at merger as a way to expand into areas and markets they don't already serve.

That means if someone were to buy HA, it would be because they don't go (or can't go) where we go now on their own. With the relative size difference between DL and HA, and the premium placed on HA because of our profitability and cash-on-hand, I don't see any way DL would profit by gobbling up HA. It would be cheaper to buy their own planes and fly them where we do without the added expense of a merger. And as it's been said before here, HA's profitability would probably tank if they were bought, because no other airline would sustain the HA customer service & experience as it currently exists, and those areas are exactly the reason HA is profitable in the first place.

After saying all that, I'd give it maybe a 60/40 chance against a merger, mainly because those words 'logic' and 'airline management' rarely appear together.

HAL

 

[Dan Roman]

Dan, money talks. And if DL were to buy your airline, I doubt they would take flights out of Hawaii. You just never know, but the fleets sure do match. Also, SEA residents probably should also have a shot at HND, and not Kona. You have 17 flights a day from HNL to Kona, which means plenty of chances to connect. How do you connect from HND to SEA? You really can't. It's up to the Gov't I guess. SEA and LAX were the top two choices for DL in the first place, and they awarded DTW, which hasn't done well.



Bye Bye---General Lee

Actually General, you are making my point. The state of Hawaii wants the HND to KOA flight. As you said, DAL would want to go SEA to HND as that would be better for them. If DAL bought HA that would be just one example of DAL doing what's best for DAL and not necessarily what would be best for Hawaii. I could go on and on with examples. Again, the State of Hawaii would have a big say in the matter, they would not want to lose all that Hawaiian brings to Hawaii in jobs, tourists and very strong name recognition.

Btw, we are very full to HND, I think HND may very well be our most profitable route.

 

[Dan Roman]

Oh yeah, I'll go with 90/10 chance of a merger (90 against!)

 

[Dan Roman]

I think Deta or someone Delta sized will end up with Hawaiian eventually, but first I think their will be a tie up amongst smaller players. JetBlue/Hawaiian seems like it could be a very good fit.

I'll go with the perception that there is no reason at all for the smaller players to combine. Airlines like HA AK JB all have their own niche and loyal passenger base. Combining any of them would destroy that and just make a more vulnerable medium sized airline. Remember USAir and Piedmont. Two very successful airlines that combined to make a medium sized loser.

 

[General Lee]

General, the logic I see (and yes, I'm an idiot for using the words 'logic' and 'airline management' in the same post) is that in today's airline market you buy another airline in order to add profitability to your airline, not to reduce competition. This is because in most markets there isn't that much competition anyway what with the former big six (or seven, or eight) are now down to the big three. The cost involved in a merger will never come back in the way of increased fares via reduced competition. So airline managements today are looking at merger as a way to expand into areas and markets they don't already serve.

That means if someone were to buy HA, it would be because they don't go (or can't go) where we go now on their own. With the relative size difference between DL and HA, and the premium placed on HA because of our profitability and cash-on-hand, I don't see any way DL would profit by gobbling up HA. It would be cheaper to buy their own planes and fly them where we do without the added expense of a merger. And as it's been said before here, HA's profitability would probably tank if they were bought, because no other airline would sustain the HA customer service & experience as it currently exists, and those areas are exactly the reason HA is profitable in the first place.

After saying all that, I'd give it maybe a 60/40 chance against a merger, mainly because those words 'logic' and 'airline management' rarely appear together.

HAL

Hal, I agree with your assessment. I give it 70/30 against a merger. But, fleet commonality is interesting.


Bye Bye---General Lee

 

[General Lee]

Actually General, you are making my point. The state of Hawaii wants the HND to KOA flight. As you said, DAL would want to go SEA to HND as that would be better for them. If DAL bought HA that would be just one example of DAL doing what's best for DAL and not necessarily what would be best for Hawaii. I could go on and on with examples. Again, the State of Hawaii would have a big say in the matter, they would not want to lose all that Hawaiian brings to Hawaii in jobs, tourists and very strong name recognition.

Btw, we are very full to HND, I think HND may very well be our most profitable route.

I am sure the State of Washington is pushing for DL's SEA to HND bid too. I hear our HND to LAX flight is doing well btw. (But the plane had to be right sized, from a whale to a 330)


Bye Bye---General Lee

 

[HA25]

The only question that has to be asked is "what is in the best interest of the HAL share holders and DAL share holders?" everything else is moot.... the commonality is interesting, the business agreements in place current also, but whether it happens (this is straight from the HAL CEO's mouth) depends entirely on the board of directors and what the offer from DAL would be..

 

[HAL]

The only question that has to be asked is "what is in the best interest of the HAL share holders and DAL share holders?" everything else is moot.... the commonality is interesting, the business agreements in place current also, but whether it happens (this is straight from the HAL CEO's mouth) depends entirely on the board of directors and what the offer from DAL would be..

Actually, I don't think that is as true today as it was in the 'go-go' era before 2008. Yes, return on investment is an important goal, but it can't be the be-all end-all for corporate strategy. As too many companies have discovered, short term gain this quarter, and mean the destruction of the company a year or two down the road. Without strategic planning (which often means some big up-front expenses) the company won't last.

Shareholders are important, but so are employees, the local community, and more. That's how successful companies have survived for decades.

HAL

 

[Dan Roman]

The only question that has to be asked is "what is in the best interest of the HAL share holders and DAL share holders?" everything else is moot.... the commonality is interesting, the business agreements in place current also, but whether it happens (this is straight from the HAL CEO's mouth) depends entirely on the board of directors and what the offer from DAL would be..

While I don't disagree that it really is mostly about money, the simple fact is it would never fly politcally in the state of Hawaii. No one knows for sure if that could stop it, but I think it would. Mergers still have to jump through government hoops.

 

[HA25]

I agree with both of my HAL counterparts in principal, especially HAL's very true comment, but I'm just repeating what our own CEO has stated is the ultimate deciding factor.

 

[General Lee]

Actually, I don't think that is as true today as it was in the 'go-go' era before 2008. Yes, return on investment is an important goal, but it can't be the be-all end-all for corporate strategy. As too many companies have discovered, short term gain this quarter, and mean the destruction of the company a year or two down the road. Without strategic planning (which often means some big up-front expenses) the company won't last.

Shareholders are important, but so are employees, the local community, and more. That's how successful companies have survived for decades.

HAL

But Hal, when you have a niche, you become dangerous. If your market cap is too expensive, like AK, then a purchase might be a big leap. If it is a cheap buy, then it may be explored even more. We all know your airline is a great airline with great service and new routes. But your problem is your airline would be relatively cheap to buy, and that makes you vulnerable.



Bye Bye---General Lee

 

[igneousy2]

I agree with both of my HAL counterparts in principal, especially HAL's very true comment, but I'm just repeating what our own CEO has stated is the ultimate deciding factor.

Your management has to say that it will consider all offers and act in the best interest of the shareholders at all times...otherwise they get sued so I wouldn't use that as any indication of managements desire to remain indpendent or not.

 

[HAL]

But Hal, when you have a niche, you become dangerous. If your market cap is too expensive, like AK, then a purchase might be a big leap. If it is a cheap buy, then it may be explored even more. We all know your airline is a great airline with great service and new routes. But your problem is your airline would be relatively cheap to buy, and that makes you vulnerable.



Bye Bye---General Lee

As always, you're correct General. That's why I give it a 40/60 chance of being bought. All it would take is an airline with some cash on hand and a BOD with island fever. I hope not, but it could happen.

HAL

 

[johnsonrod]

Hey HAL,

You're "dangerous" like MAVERICK... Think of Iceman chomping his teeth after saying that...

 

[Full of LUV]

I am sure the State of Washington is pushing for DL's SEA to HND bid too. I hear our HND to LAX flight is doing well btw. (But the plane had to be right sized, from a whale to a 330)


Bye Bye---General Lee

The State of Washington doesn't have Innoeuye or Akaka as senators.

 

[General Lee]

The State of Washington doesn't have Innoeuye or Akaka as senators.

Yeah, but how about the senators in GA, NY, OH, MI, MN, CA, and UT? Get the picture? Just Jokin, right? Right?



Bye Bye---General Lee

 

[HA25]

The State of Washington doesn't have Innoeuye or Akaka as senators.

both of whom are well into their late 80's it bares mention however.

 

[Full of LUV]

both of whom are well into their late 80's it bares mention however.

Oh I agree and Akaka is retiring and being replace this term already, but until the end of the year for him and till who knows for Inouye, you don't wield a bigger stick in the Senate than the state of Hawaii, if you don't believe it, just look at the amount of Fed dollars vs taxes that Hawaii gets every year to see that effect. Inouye even boasts about it in the paper, he will do whatever it takes (legislatively of course) to make sure Hawaii gets what it wants. That being said, not sure how much the Senators can effect the taking of a slot awarded to Delta to provide service to Haneda from Kona, vs Seattle. Guess we'll find out shortly.....

 

[General Lee]

Oh I agree and Akaka is retiring and being replace this term already, but until the end of the year for him and till who knows for Inouye, you don't wield a bigger stick in the Senate than the state of Hawaii, if you don't believe it, just look at the amount of Fed dollars vs taxes that Hawaii gets every year to see that effect. Inouye even boasts about it in the paper, he will do whatever it takes (legislatively of course) to make sure Hawaii gets what it wants. That being said, not sure how much the Senators can effect the taking of a slot awarded to Delta to provide service to Haneda from Kona, vs Seattle. Guess we'll find out shortly.....

I actually saw Inouye fly into HNL on DL, obviously a connection from DCA, which Hawaiian doesn't fly to. He and his body guards looked happy.


Bye Bye---General Lee