It’s a fascinating time for Alaska Air Group, given the merger between Alaska and Hawaiian, which is causing a major strategy shift. We’re seeing Alaska Airlines create a long haul hub out of Seattle-Tacoma (SEA), using former Hawaiian Airlines jets. Along those lines, there’s an interesting update…
In this post:
Alaska modifies its Boeing 787 Dreamliner order
Pre-merger, Hawaiian had placed a firm order for 12 Boeing 787-9s, and the long term plan is for these to fly for Alaska, out of Seattle. Just a couple of months ago, Alaska revealed it would boost this order, adding five additional frames, meaning there are now 17 of these jets on order.
That’s not all that has changed, though. Alaska has also swapped the variants for some of these orders — five of the 787-9 orders have been swapped to the larger 787-10 variant. That means Alaska now has 12 787-9s and five 787-10s on order.
This was initially reported by Seeking Alpha last week, but at the time, many of us weren’t sure if it was accurate, since it wasn’t reported elsewhere, and seemingly wasn’t based on any public filings. So there’s now an update, as Alaska has confirmed that it has converted some 787-9 orders into 787-10s. The airline states it will share more details about this in the near future.
For those not familiar, the 787-10 is the largest variant of the Dreamliner. While it has the least range of any Dreamliner variant, the per-seat economics are great, given how it’s “stretched.” Furthermore, the plane’s range has nicely been expanded since it first launched, thanks to incremental improvements.
Among US airlines, United operates the 787-10, Delta is expected to order the 787-10, and I have to imagine that at some point, American will also order the 787-10 (as it eventually makes a decision about 777 replacement plans).
This seems like a logical development for Alaska
The Boeing 787-10 seems like the perfect plane for Alaska, especially given Seattle’s geography. For context, the 787-9 officially has a range of 8,700 miles, while the 787-10 officially has a range of 7,300 miles. Of course let me emphasize that doesn’t mean the planes can fly routes quite that long, since it doesn’t factor in fuel reserves, winds, variations between configurations, etc.
Still, 7,300 miles from Seattle covers a vast majority of destinations that Alaska could want to serve, including everything in Europe, as well as much of Asia. The only thing that potentially wouldn’t be within range is destinations like Australia, India, and Singapore, but those can be flown by the 787-9.
Given the great per-seat economics, plus Alaska’s ability to eventually fill long haul seats given its strong hub, upgrading to the larger plane makes sense.
I think the only challenge is going to be to have two relatively small subfleets, which isn’t ideal in terms of aircraft scheduling, spares in the event of irregular operations, etc. A fleet of just five planes doesn’t offer much scale. Then again, who knows, maybe Alaska will significantly increase its Dreamliner fleet over time, beyond what has been announced so far.
Bottom line
Alaska Air Group recently boosted its Boeing 787 order from 12 to 17 frames. Not only that, but Alaska has made those incremental orders for the 787-10, rather than the 787-9. That makes perfect sense, given the 787-10’s great unit costs. Ideally you’d have a larger and more uniform fleet, but at the margins, this order is logical.
What do you make of Alaska ordering the Boeing 787-10?
Though it's worth noting that the opposite can also be true.
The PER-LHR nonstop on Qantas exceeds the 787-9's brochure range. And yet, the aircraft does it nonstop, due to a lite configuration + recent software upgrades.
Alaska is working that S curve very well in SEA and the share gap has grow since 2019. Bad news for DL in SEA and especially TPAC.
the S curve cannot fix the hypercompetitive nature of many markets like TPE, the inability to get into HND and China, or the very concentrated nature of the ICN market.
No airplane can fix those problems. AS is simply coming late to the party in many of the international markets that matter and, in the case of FCO, DL jumped right into the market and added BCN.
Interesting that despite being ‘late’ to the international market Alaska has grown their already enormous market share gap in SEA while being as profitable as UA and DL and enjoying leading customer loyalty. Sorry, Alaska doesn’t need to defend six other hubs, only one in which they have overwhelming advantages. And as you like to point out when it suits you they will engender good will from DOT and others as a source of competition...
Interesting that despite being ‘late’ to the international market Alaska has grown their already enormous market share gap in SEA while being as profitable as UA and DL and enjoying leading customer loyalty. Sorry, Alaska doesn’t need to defend six other hubs, only one in which they have overwhelming advantages. And as you like to point out when it suits you they will engender good will from DOT and others as a source of competition with the big 4 when additional access to markets becomes available.
first, AS' 2nd quarter net income margin was 4.6% compared to DL's 12.8% so it is patently false that AS is as profitable as UA, let alone DL.
AS had more market share at SEA even before DL started its hub; no one disputes that has remained.
We don't know how profitable any airline's hubs are because they don't report it.
The issue is about whether AS can successfully break into the longhaul international market...
first, AS' 2nd quarter net income margin was 4.6% compared to DL's 12.8% so it is patently false that AS is as profitable as UA, let alone DL.
AS had more market share at SEA even before DL started its hub; no one disputes that has remained.
We don't know how profitable any airline's hubs are because they don't report it.
The issue is about whether AS can successfully break into the longhaul international market and generate REVENUES comparable to DL and other international carriers.
Your statement was about the S curve which is true - but it still can't overcome that AS is entering multiple international markets not as the dominant carrier - which it is in the SEA domestic arena - but in international markets where it will be 4th or 5th carrier.
and it is precisely those 6 other hubs that DL and UA and AA have that make breaking into TATL markets that much more difficult.
your last sentence makes no sense. Goodwill doesn't fix a lack of competitiveness which is where AS is in many international markets.
A bigger plane will lower costs - if AS can fill those bigger planes with fares that are as high or higher than what other airlines get on smaller, equally cost effective aircraft - such as other airlines are already using from SEA.
Type rating is the biggest factor here. A pilot rated on a B787-8 can handle a -9 & -10. And there will be a 95% commonality of parts among these jets which will be stationed at SEA.
As for the A330 fleet (24 PAX & 10 Amazon freighter), they stay at HNL with their own crew base, maintenance, etc. The cash flow from the Amazon contract makes it difficult to just walk away from...
Type rating is the biggest factor here. A pilot rated on a B787-8 can handle a -9 & -10. And there will be a 95% commonality of parts among these jets which will be stationed at SEA.
As for the A330 fleet (24 PAX & 10 Amazon freighter), they stay at HNL with their own crew base, maintenance, etc. The cash flow from the Amazon contract makes it difficult to just walk away from the A330.
Similar situation with Sun Country, B737NG, and its approx 18 Amazon freighters.
except HA sent its 330s off the islands for heavily maintenance; at one time, it was DL.
and, yes, the cargo operation is separate from the passenger operation and AS doesn't seem interested in getting rid of it.
I don’t understand this order. They are already fitting 300 on the 787-9 which is substantial and it gives them flexibility.
Only reason to get the 787-10 is to fly between the mainland and Hawaii !!
Why (or better yet: how) are you jumping to such a conclusion, when you have no idea what their needs, or even wants, in long-haul capacity are.
Anyway, the most commonly alleged answer, is because Alaska is working on a premium economy, but doesn't want to sacrifice the density that it already has in business and coach. The obvious solution is therefore a longer version of the aircraft they already have.
The bait is thrown.
Tim's BA alter ego bot is its way to say that "if it's Boeing I ain't going" again.
I don't get a hat tip for mentioning it a few days ago?! lol
yoloswag420 gave me crap 2 months ago because I was questioning if the -10 would work for them lol
"I wonder if the -10 would work for them. The -10s range seem to be adequate for them, while the -9s size works for them too."
"Why would they want more seats, when they can't fill the smaller gauge right now?"
I...
I don't get a hat tip for mentioning it a few days ago?! lol
yoloswag420 gave me crap 2 months ago because I was questioning if the -10 would work for them lol
"I wonder if the -10 would work for them. The -10s range seem to be adequate for them, while the -9s size works for them too."
"Why would they want more seats, when they can't fill the smaller gauge right now?"
I guess they can use the extra seats later on. And you really don't need the range of the 9.
Anywho, the -10 is a great aircraft even without the updates; once BA increases the MTOW, it'll be comparable to to the current 772ER which seems to be the sweet spot for a lot carriers; not everyone needs the range of the 359 while retaining a comparable configuration.
the 787-10 makes alot of sense. As I have accurately noted, it has the lowest CASM of any widebody right now. It has a 12+ hour range which is enough to fly a big chunk of the Pacific Rim plus Europe from SEA.
UNITED ahead of the curve on that one
Greg, exactly. UA set the trend on US carriers for that one. Anyone else will following UA's lead.
and the MAX 10 and yet UA is well behind the curve on the A350 which is superior in economics and performance to its 787 counterpart.
Try and fly a 787-10 on a 17 hour flight and let us know how it works out. With a full passenger load, btw
Not every airline wants to wack an airplane for 17hrs straight and how many 17 hr flights will one airline fly when you’re not Qantas which is exactly why the 787 is almost double in sales versus the 350.
350 is great. It can do everything but at the edge of the envelope it’s really useless for most airlines because most airlines don’t need all that.
So the premium Airbus charges for that...
Not every airline wants to wack an airplane for 17hrs straight and how many 17 hr flights will one airline fly when you’re not Qantas which is exactly why the 787 is almost double in sales versus the 350.
350 is great. It can do everything but at the edge of the envelope it’s really useless for most airlines because most airlines don’t need all that.
So the premium Airbus charges for that comes back to bite them because it makes the aircraft price uncompetitive to most airlines. But they’ve beefed up that jet to be able to do that so they have to charge that. That’s the problem vs the 787. Plus on most routes the 787 will burn less fuel and is cheaper to operate with its lower MTOW
"UNITED ahead of the curve on that one"
Not really. Delta somewhat publicly rejected the aircraft in 2018, when a team led by Justin Hale was basically told by Boeing to not come back without a 787 order from them. From what I understand, they threw everything against a wall, but Delta still ordered more Airbuses instead, citing the Trent engine issues and the lesser capabilities of the 787-10 back then.
United on the other...
"UNITED ahead of the curve on that one"
Not really. Delta somewhat publicly rejected the aircraft in 2018, when a team led by Justin Hale was basically told by Boeing to not come back without a 787 order from them. From what I understand, they threw everything against a wall, but Delta still ordered more Airbuses instead, citing the Trent engine issues and the lesser capabilities of the 787-10 back then.
United on the other hand, was willing to accept those limitations, while at the same time, continually delaying its A350 order. I don't have their numbers, but in hindsight, that looks like a dumb move.
Now, 2 engine PIPs, a software upgrade, an MTOW increase, and a potential -IGW on the way, it seems like Delta is looking at the 787-10 in a new light. As would be expected. United on the other hand, is stuck with having the 787-9 as its longest ranged aircraft, which limits it from doing routes like L.A. to Singapore with the payload it was previously expecting.
So if anything, Delta is leading the way by having the A350, which lets it do routes that the other 2 can't, assuming it gets off its behind and actually tries them, versus flying to a partner hub. Bringing back L.A. to Hong Kong is a good start. There's nothing that United's 787-10 can do however, that Delta's A330/A350 or even American's 772/773 can't replicate though.