paxex - Stephan Segraves

Alaska Airlines purchases Virgin America

April 4, 2016 ssegraves

The Wall Street Journal reports that Alaska Airlines has reached a deal to purchase Virgin America. The big news is the price paid.

Alaska Air Group Inc. said Monday morning that it had reached a deal to buy Virgin America Inc., winning a frenzied bidding war with rival JetBlue Airways Corp. The parent company of Alaska Airlines said it would pay $57 a share for Virgin, a 47% premium to Friday’s closing price, representing a total equity value of $2.6 billion. The Wall Street Journal had reported Sunday that Alaska won the bidding contest for Virgin, whose shares have risen lately on takeover speculation.

And investors are responding with a little bit of disapproval as well, with Alaska Airlines stock down around 5.5% at 10am Pacific.

I am a little concerned that Alaska is paying a significant premium simply to gain gate space and landing slots at a few different airports, namely San Francisco. They are making the purchase at a time when Delta is still trying to grow their new Seattle operation and encroach further into Alaska’s dominant hub, yet they seem unfazed. The Alaska premium product is definitely not cut out to go head to head with some of the other premium transcontinental products and Virgin’s product is showing its age. How does Alaska plan to compete with better products on some of the more lucrative transcon markets (SFO/LAX-NYC, SFO-BOS)?

And all of this without taking into account two very different customer loyalty groups. Virgin is considered sleek and hip, while Alaska Airlines has a loyal following in the Pacific Northwest and Alaska. Merging those two cultures together while not losing customers will be key for Alaska to succeed. I wonder if the Alaska Airlines management team has a plan in place for doing just that or if they are going to call in the consultants to try and sort it out.

Lastly is the two very different airplane fleets. Virgin America operates an all Airbus A320 and A319 fleet while Alaska Airlines is Boeing 737s for their mainline operations. During the analyst call this morning it was mentioned that the Virgin America Airbus leases start expiring in 2020, so for the next few years, there will be a mixed fleet. The one possibility is that Alaska will use the Airbus fleet up and down the west coast since their capacity is a little less than what the 737s can hold and Alaska could run more frequencies to make up for that.

My general sentiment is that I had thought JetBlue would win the bidding war and build a larger west coast presence. This seems like a generally risky move for Alaska who up until this point has not needed financing to operate and they have grown very organically through the years. I worry that biting off more than they can chew could come back to haunt them in the next few years. I hope I am wrong, but the true test will be whether or not they are able to stay entrenched at Seattle-Tacoma International.

First Class Experience on Alaska’s New Regional E-175

July 22, 2015 ssegraves

After our move to Portland last year, I decided to match my United 1K status to Alaska Airlines. At the time, there were rumors that Alaska was matching top tier statuses from other airlines with their Gold 75K status, so I gave it a shot. A few weeks after submitting the match I received my credentials in the mail and sure enough, Gold 75K was what they gave me.

Since then I have not had much of an opportunity to fly on Alaska. Most of trips early in the year were to places they don’t fly or where their prices were not competitive. But recently Alaska Airlines has started offering flights between Seattle and Milwaukee and it has been perfect for my work trips. The flights are operated by Skywest using Embraer E-175s, a regional jet that doesn’t feel like a regional jet. They can hold normal sized carry-on bags in the overhead bins, they have tall ceilings, and for most carriers, they have a first class cabin.

My first trip on Alaska’s new Skywest E175 service was a return from Milwaukee to Seattle on the second day the flight operated. I had been upgraded to first class shortly after booking. The only seats available were the set of two in the bulkhead. Not my favorite seats, but I was not going to complain. At the airport, there was an agent helping customers use the kiosk as well as two agents helping at the counter to check bags and print boarding passes. All were very friendly and seemed excited about the new service. I arrived with a little more than an hour until boarding but with PreCheck, I was through security and at the gate very quickly. Not much more waiting and they were already announcing boarding for families with children under two and those needing extra assistance. Then active duty military were called and first class. Walking onboard I got a good whiff of “new plane smell” which, I have to say, is like new car smell just a bit more expensive.

The flight attendants had already placed small Dasani water bottles at every seat and were greeting passengers as they boarded. They both seemed excited about the new planes, the new service, and just happy to be there. It was refreshing. The plane did not take long to board and we pushed back from the gate right on schedule, the captain telling us it would be right at four hours until wheels down in Seattle. I was actually seated next to a pilot who explained that for the first few days of service, Alaska and Skywest were flying an extra crew to operate the return flight just in case there was a storm or other delay that would cause the original crew to time out and cancel the flight. He was gracious and answered all of my questions about the E-175 and the Skywest service for all of the different carriers. It seemed like he enjoyed his job and was happy to be able to fly the E-175 for multiple carriers now.

Shortly after takeoff the flight attendant visited each passenger, asking them what they wanted to drink and whether or not they would be having dinner. I asked for an Alaskan Amber and mentioned that yes, I would be having dinner. I expected to hear choices for dinner but none were presented. A short time later and the Alaskan Amber and plastic ramekin of nuts was delivered (the nuts had been heated). A little while later and the dinner was placed in front of me. The meal consisted of a sandwich, in this case chipotle chicken, a salad, and a cookie. The meal was ok. I am not a fan of those sandwich rounds used for the bread but other than that, it was fine. I will say that I found the portion to be a little small for a flight of four hours. United, on Chicago-Portland in first, serves a large portion meal followed by an ice cream dessert.

On the next flight I took, Seattle to Milwaukee, the meal was a similar sandwich and salad affair but the sandwich was a “Cuban”. I put it in quotes because it had pickles, cheese, and ham but that’s about where the similarities between what I ate and a what Cuban sandwich is end.

Let’s talk about the seat for a minute. It’s a simple first class seat with a power outlet for each passenger. The headrest is adjustable and the recline is nice. Other than that, it’s a basic seat. There is also supposed to be WiFi and streaming entertainment but neither of these have been available on any of the flights I have been on, though I am told it is definitely coming.

Overall, Alaska’s E-175 offering is a great option to get from the Pacific Northwest to Milwaukee. The food leaves a little to be desired but it’s non-stop from Seattle (I do wish it left a little earlier) and the operation seems to be pretty solid. I have taken thes flights between Seattle and Milwaukee about 5 times so far and the only inconsistency I’ve noticed is in the flight attendant service. I think this will work itself out once they are used to operating for Alaska on the E-175s, but there were a few times where the crew did not know how to operate some of the equipment or handle the service. Definitely nothing that is a deal breaker for me. I am just happy to have another option where I do not have to connect through Chicago.

Why Luxury Air Travel is Taking Off Again

November 28, 2014 ssegraves

The Financial Times on Why Luxury Air Travel is Taking Off Again

An interesting tidbit:

“Everyone thinks first class must be diminishing, but its quite incredible how more and more airlines are renewing their first-class offer and having more first-class seats on board,” says Nigel Goode, director of the design agency PriestmanGoode, whose recent projects include new first-class cabins for Qatar Airways, Swiss, Lufthansa and Air France. “There is quite a resurgence.”

And yet the picture isn’t straightforward. “Absolute numbers are up, but it’s the composition that is the really intriguing thing,” says John Grant, executive vice-president at OAG. Look at individual airlines and you see big discrepancies. In China, where flying first has traditionally been an important status symbol for executives and politicians, as well as in the Middle East, carriers have rapidly expanded their first-class offering. However European airlines, and US carriers on international routes, have tended to scale back.

Really, it is the Middle East and Far East carriers who are bringing the resurgence. Western carriers are simply trying to keep up and some are doing better at it than others. And I doubt we’ve seen the end of western carriers getting rid of longhaul first class cabins. Maybe the answer is for some western carriers to focus on the business class traveler experience and make it as comfortable and beneficial for flyers as possible while keeping the price in the range of employers.

Are Flyers Getting What They Want?

December 27, 2013 ssegraves

This short article from Business Insider seems to suggest we as travelers are getting exactly what we want. From the article:

The reason flying is the way it is is because that’s exactly what today’s fliers want.

Specifically, fliers want:

Safe, rapid travel between two cities

The lowest possible price

Oh, sure, people who fly won’t say that they’re getting what they want — because then they would reveal themselves to be cheap bastards who care mostly about price.

While it is true that travelers are getting low priced, relatively fast transportation between cities, the amenities that used to be offered on the same flights have been eroded to keep the price low.

I think what travelers want has changed a little in recent years and the above list needs to be amended to include power ports and internet connectivity. These two items have become even more important travelers over the last few years and most of the airlines are just now getting these things installed or playing catch up figuring out how to do so. I would also add “cleanliness” to the list. My last few flights on United have been on planes that were absolutely filthy and it was not a pleasant experience.

Are travelers willing to pay more for a better experience in flight? Based on Delta and United reconfiguring a number of aircraft to remove economy seats that have extra legroom and replace them with regular economy seats, my guess is no. There is a small segment of the traveling public that is willing to pay for more amenities but most just want a seat between two cities.

New United Seats – Not An Improvement

June 7, 2013 ssegraves

Last night as I boarded my flight home from a week of work in New York City, I noticed that the seats on my United Airbus A320 looked a little different. Turns out I was experiencing the newly converted A320 with the Recaro slimline seats with the “comfort” upgrade. These seats are very similar to the Lufthansa NEK seats that have caused a bit of stir in their frequent flyer ranks, the difference being that United’s install has more padding and are supposed to be a more comfortable experience. From my three hour and fifteen minute flight last night, my conclusion are that the seats are a downgrade for passengers.

My immediate reaction to the flight last night was a little bit of the knee-jerk, “I hate change!” type but after gathering my thoughts and reading through my notes, my summary is this – the seats are not a one for one swap with regards to passenger comfort when compared to the previous United A320 seats and the new seats are certainly not an improvement. United’s reasoning for these seats was clear from the get-go, they wanted to fit an extra row of seats on the plane and these seats allowed them to do that by moving the rows closer together.

I was seated in row 21, seat A, an exit row window seat, for my flight last night. The first thing I noticed was that the legroom in this particular row had been severly reduced. The previous seat configuration here gave so much legroom that a passenger could barely touch their bag if there was one under the seat in front of them. The exit rows were clearly the losers when it came to where rows were squeezed closer together. The second thing I noticed was the somewhat cheap feeling of the seat. It is flimsy, just like the Lufthansa seat. When you or others in your row move, the lightweight metal frame of the seat is not very forgiving, allowing that movement to be felt by everyone else in the row.

The magazine storage has changed so that the magazine and safety briefing card are now in a small plastic divider behind the tray table. I was not surprised by this, I have seen the setup before on Lufthansa and it is actually a smart way to store the magazines. Where the negatives are for the passengers is the standard storage sleeve. What used to be a pocket in the seatback in front of you is now a shortened mesh pocket that is not good for storing much. I typically carry a small bag with my headphones and electrical accessories and between it and an iPad mini, the storage area could barely hold them. The seatback pocket is great for holding things and allowing a passenger to stay in their seat and avoid moving things around in the overhead bin.

The tray table on these new seats is noticeably smaller. In the exit rows the tray table used to be held in the armrest, that is no longer the case. I did not see what the setup was for the bulkhead rows but in the exit row, the tray table is now on the seat in front of you. The width has been reduced but I would say the depth is about the same as what the tray tables were when stored in the armrests. Again, the metal connections feel a little flimsy here. I rested my hands holding a book on the table and without really pushing I could feel a significant give in the table.

Lastly, the seat itself and a number of aspects that I find contribute to the overall uncomfortable feel of these seats. A lot of people think it’s the padding alone but with the things I list below, I think it is a group of things that really make these seats a downgrade for passengers.

The comfort package does not add a significant amount of padding. There is definitely more than what Lufthansa offers but it is certainly not a huge improvement. It slightly removes the wood feel of the Lufthansa seats.
The bottom cushion of the seat is a standard width but does not extend as far forward under the passenger’s legs as the previous seats. I would say the bottom seat cushion reminded me more of an exit row seat on a regional jet where they had to reduce its length to comply with safety standards. Thinking about this now I wonder if it is the same case on the A320s, the exit row required the seat cushion to be shorter. If you’ve flown in a regular row (rather than an exit row) on this converted plane I’d love to know if you felt the same way about the bottom cushion.
There is very little lumbar support. In United’s announcement about these seats it was stated that there would be more lumbar support than the seats installed on Lufthansa but if it was there, it definitely was not noticeable. I thought reclining would help a little but it did not.
The armrest width and length has been significantly reduced. The armrest is no longer as long as the seat is deep, ending up around four to five inches shorter. The width suffers greatly as well. I used to be able to share the armrest with a neighbor, each of us taking a little bit of it, but that is no longer possible. My seatmate and I were being polite and trying to do just that on the flight but we both commented that it wasn’t really possible.
Tapering of the back of the seat. Halfway down the seatback, the seat tapers inward, leaving larger gaps between the seats. I have not noticed this before on Lufthansa flights but doing a quick Google Images search shows that it is there as well. My only comment on this is that it leaves you feeling a little more exposed. The armrest used to fill this void now there is nothing there. It is not a huge deal, just really different.
The multidirectional headrest is small but slightly padded. I do not see any real benefit.

All of the above, especially items 1-4, combine to make the seat uncomfortable. Let me explain. Since there is less support under the forward portion of your legs your butt slides forward some so that your back takes on more of a support role, but there is no longer significant lumbar support so you continue to slide forward. To counteract this you have to use your feet to push yourself back into place. This process repeats until finally you leave your feet firmly planted on the floor to keep from sliding forward. In the exit row window seat there is no armrest attached to the seat on the window side leaving you with the middle seat’s outer armrest to try and keep your balance. This leaves you kind of squirming in the seat trying to find a comfortable position. I tried leaning back against the headrest but to keep from sliding into a slouched position I had to plant my feet and push myself into the seat to use the headrest.

If you can’t tell from the short novella I have written, I do not find the seat very comfortable. I think it is a downgrade for customers and a poor choice for United to make, no matter the extra revenue United squeezes out of those six extra seats. And I was not the only one making negative remarks, I heard plenty of people comment that they could not find a comfortable position in the seat. My co-worker leaned over and asked me “why have they not removed these old harder seats for those nicer padded ones”. I am serious, that is what I was asked. When I replied that these were new seats and were coming to the Airbus fleet he simply shook his head.

One last item. In the United announcement a comment was made about the entertainment options on these planes. There are none. While it was stated that Wi-Fi would be available, it definitely was not on during my flight last night and I also noticed there are no power ports to charge devices when they do get Wi-Fi on these planes. If they are going to be streaming entertainment via the Wi-Fi then they are going to need a power source of some kind. Also, the pilot announced Channel 9 was available but there is no audio on the plane and thus, no way to listen to air traffic control.

All in all the seat is a disappointment and I hope decision makers at United are flying on these planes and noting the issues that customers are having. I cannot imagine sitting in one of these seats for a transcon or even a red-eye, which are bad enough without uncomfortable seats thrown into the mix. The revenue of those six extra seats may look good on an accountant’s business case but it is being earned on passenger’s lower backs and rear ends.

I know this was a lot of words to describe a seat but when you are in one of these things twice a week, every week, it kind of matters.