A Look At Alaska Air’s Network Expansion Across The West Coast
Alaska Air (NYSE:ALK), along with its regional partner airlines, serves more than 100 cities in Alaska, the Lower 48, Hawaii, Canada, Mexico, and Costa Rica. Its operations, however, are limited to the domestic markets of the Americas.
As we have talked in a series of articles, one of the primary objective behind Alaska’s acquisition of Virgin America, is to expand Alaska Air’s footprint in the West Coast, more specifically California, and to strengthen its competitiveness against the top four U.S. airlines. In the last 10 years, from 2005-16, Alaska has expanded its transcontinental presence, such that, it gets 18% of its total revenues from these routes now. This has occurred along side capacity expansion, whose pace has exceeded that of the industry over the last few decades.
- Should You Pick Alaska Air Stock At $37 After Q4 Beat?
- Will Alaska Air Stock Rebound To Its Pre-Inflation Shock Highs of $70?
- What’s Next For Alaska Air Stock After A 24% Fall This Year And A Downbeat Q3?
- Which Is A Better Pick – Alaska Air Or UAL Stock?
- What’s In The Cards For Alaska Air’s Q2?
- Should You Buy Or Avoid Alaska Air Stock At $52?
In line with this, Alaska has announced the inauguration of a number of new flights across the country, starting at cities on the West Coast. One of the more notable launches is the flights to Newark from three different cities on the West Coast, namely, Portland, San Diego, and San Jose. This launch has been facilitated by Federal Aviation Administration’s recent decision to ease “slot” restrictions. Previous capacity controls at the airport made it extremely difficult for airlines to add new flights at the airport, where United controlled the vast majority of the so-called takeoff and landing slots.
The new flights from San Diego, San Jose, Seattle, Portland, Los Angeles will allow Alaska Air to establish its presence on the West Coast more firmly, especially as it awaits DoJ’s approval on its Virgin America deal. As the merger completes, Alaska can expect greater access to a number of gates across both the East and West Coast. Consequently, we can expect Alaska efforts at network expansion pay off in the way of giving stiff competition to JetBlue and Southwest.
Further, due to relatively lower costs than legacy carriers, which allow Alaska to offer almost 25% cheaper flights, we can expect the expansion to help the company attract more traffic. This will also be helped by the company’s high ranking operational performance for on-time arrival, cancelled flights, extreme delays and fewest complaints.
See Our Complete Analysis For Alaska Air Here
Have more questions about Alaska Air (NYSE:ALK)? See the following links:
- Airlines And The Federal Minimum Wage
- How Did Alaska Air Perform Operationally In October?
- Alaska Air Reports A Solid September Quarter On The Back Of Continued Capacity Expansion
- Alaska Air Q3’16 Earnings Preview: Continued Capacity Growth, Higher Unit Costs To Weigh On Earnings
- How Did Alaska Air Perform Operationally In September?
- Why Has Alaska Air’s Stock Price Fallen 20% Since The Beginning Of The Year?
- Will The Alaska Air-Virgin America Deal Get Delayed?
- Why Are The Air Fares Offered By The U.S. Airlines Falling?
- How Did Alaska Air Perform Operationally In August?
- What Is The Role Of Passenger Airlines In The Air Cargo Industry?
- Why Have We Revised Alaska Air’s Price Estimate To $69 Per Share?
- Alaska Air Reports Another Strong Quarter Backed By Rapid Capacity Growth And Lower Fuel Costs
- Alaska Air Q2’16 Earnings Preview: Capacity Growth, Fiscal Discipline To Support Earnings
- How Will The Virgin America Deal Impact Alaska Air’s Share Repurchase Program?
- Will Alaska Air-Virgin America Face Antitrust Issues?
- How Will The Virgin America Merger Impact Alaska Air’s Cost Of Capital?
- How Will Alaska Air’s Market Share Change Post The Virgin America Deal?
- Why Is Alaska Air Acquiring Virgin America?
- How Will Alaska Air Benefit From The Virgin America Deal Operationally?
- How Will The Expected Return On The Alaska Air-Virgin America Merger Compare With The Previous Deals In The Sector?
- How Will The Virgin America Deal Alter Alaska Air’s Capital Structure?
- Has Alaska Air Paid A Fair Price For Acquiring Virgin America?
- Alaska Air’s Earnings Rise On The Back Of Rapid Capacity Growth And Lower Fuel Costs
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Alaska Air Group
View Interactive Institutional Research (Powered by Trefis):
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap