Delta and Alaska Partnership Will Duke it Out

Delta Airlines

Here’s the weird thing. As much as airlines are fierce competitors, many also need each other to survive. Take Delta Air Lines and Alaska Airlines. Alaska feeds Delta’s international flights out of Seattle from up and down the West Coast.

If you want baseball-like statistics, Alaska carries 65 percent of the passengers from Las Vegas to Seattle. They haul 40 percent of the traffic between San Francisco and Seattle. Alaska delivers 89 percent of the seats into Seattle from Portland.

Alaska operates 472 flights daily from Seattle, which is their home, accounting for the majority of flights into Seattle-Tacoma International Airport.

About a third of Delta’s international passengers come from Alaska’s network.

In Seattle, rainmaker routes for Delta are their international flights to Tokyo Narita and Haneda (now the preferred airport for business travelers because it’s closer to Tokyo’s heart). They also fly to Beijing, and will be adding Seoul and Hong Kong routes.

Now Delta wants a bigger slice of Alaska’s pie and they’re increasing frequencies to go toe-to-toe with Alaska on feeder routes into Seattle.

Delta’s VP for Seattle, Mike Medeiros, recently told the Puget Sound Business Journal that Delta wants to grow their West Coast routes and announced six new daily non-stops between Seattle and San Francisco. They’ve also added flights into Seattle from Las Vegas and Los Angeles.

“We’re very committed to Seattle,” Mr. Medeiros said. “And what that means is we’ll be looking for opportunities on the West Coast — including California — for Delta airplanes.”

And that’s a threat to its key Seattle code share partner Alaska Airlines. Of course Delta would rather fly passengers within its own network, and “having its own service from the top domestic markets to Seattle underpins that goal.”

“Delta and Alaska are fierce competitors,” Mr. Medeiros added.

“It’s a double-edge sword; the code shares are fine as long as Alaska wins traffic, a Seattle-based consultant told the Business Journal. “Delta has the ability to do significant damage. The damage will be in revenue dilution. The way Delta can hurt Alaska is taking money away from them.”

“Las Vegas, Los Angeles and San Francisco are large markets from Seattle and we are grateful to be the dominant carrier in all three of these,” an Alaska spokesperson responded. “As Seattle’s hometown airline, we’ll continue to meet demand in these core West Coast markets.”

Early in 2014, Alaska Airlines plans to take on Delta by adding frequencies. The move follows Delta’s declaration of launching new service from Seattle to San Francisco in 2014 and adding frequencies in Los Angeles and Las Vegas.

The Tarmac’s View: It’s pretty clear that Delta Air Lines is morphing Seattle into its gateway to Asia. SEA is a relatively uncongested airport and air space, close to many Asian destinations. For now, Delta and Alaska need each other, but Delta’s got the fleet to take on Alaska. Delta’s going to cut into Alaska’s dominance in Seattle and shareholders won’t like it. Don’t be surprised if Delta makes a bid to buy Alaska.


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Comments (Showing 4 of 4)

  • scnzzz at 12:16am October 18, 2013

    I’d love to see DOJ take on a proposed DL/AS merger, particularly given the upcoming heavy overlap on the west coast.

  • trajanc at 2:56am October 18, 2013

    Don’t be surprised if Delta makes a bid to buy Alaska? Good god please no.

  • BearX220 at 3:15pm October 18, 2013

    Alaska’s market cap makes acquisition a tall order for any suitor. And the AS customer base in the Northwest and Alaska would fight a takeover tooth and nail — if DL were to do to AS what it did to Western, or what AA did to Reno Air, or what US did to PSA, it would be disastrous. Nobody wants a DL-AS merger except perhaps some DL strategists who would like to knock AS off the chess board. But AS is prospering as an independent entity and would probably prefer to break off the AS-DL cooperative agreement and align more closely with AA first.

  • PhatSeat at 2:15pm October 30, 2013

    Perhaps AS should take a look at their relationships and stop prostituting themselves, what is good for AS is not always in the best interest of their DL partner.

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