Future of Seattle
Apr 17, 2017, 9:02 am
#31
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I'm sure the braintrust on Virginia Avenue has their ideas but most of the publicly available data suggests things aren't so rosy for DL in SEA. Sure they've gained share but the yields are mostly trash and most of the local base has an affinity for AS and their partners for international travel. Plus DL is going for the low fare fodder out of East Coast and other points in the west coast.
Delta hasn't talked about yields in SEA - U.S. carriers are very wary about discussing yields in specific markets lest they be accused of signaling - but they have said that SEA margins are higher than when they started the expansion.
As for DL yields systemwide, they are higher AA's or UA's; they are notably higher than Alaska's.
This is from Alaska's investor day presentation of 3-29-17. The awkward way for ALK management to put this: on a stage-length adjusted basis, people are willing to pay a lot more to fly Delta (than they are Alaska).
http://phx.corporate-ir.net/phoenix....ventId=5251562
Apr 17, 2017, 10:29 am
#32
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Being SEA-based, I will concur with previous posters in that in my experience, demand for DL out of SEA has been very strong, at least with my observance in how full cabins have been (excluding non-revs).
While just one piece of anecdotal evidence (which may not be statistically significant), yesterday on a flight returning to SEA, a senior FA was chatting with a newer FA and mentioned how hard it is to non-rev out of SEA nowadays, given the planes are so full.
I feel like her point could be said industry/network-overall, not just SEA, but her 2 cents was an interesting perspective.
While just one piece of anecdotal evidence (which may not be statistically significant), yesterday on a flight returning to SEA, a senior FA was chatting with a newer FA and mentioned how hard it is to non-rev out of SEA nowadays, given the planes are so full.
I feel like her point could be said industry/network-overall, not just SEA, but her 2 cents was an interesting perspective.
Apr 17, 2017, 10:58 am
#34
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I will note that as a business traveler, Delta has tended to be my choice out of SEA, whereas I noticed when flying for leisure, I tend to pick Alaska since their prices are cheaper (and for a recent trip, better schedule).
Apr 17, 2017, 11:17 am
#35
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I don't see the connection between the KE joint venture and the future of SEA.
Delta built up the SEA hub because taking on UA at SFO was not realistic and DL is already doing everything it can at LAX. ATL, DTW and MSP are very long flights to anywhere in Asia and those cities don't make any sense as a connection point for any west coast cities. They cover the SE and upper mid-west very well, but offer nothing to the west half of the country.
When fuel prices were $3/gal and lower prices were not on the horizon, Anderson bet on SEA as a lower-cost domestic alternative for long-haul flights to Asia. SEA still makes sense for most of the big Asian destinations, and the KE joint venture will not change that.
The KE joint venture will help DL with connections to all of the second-tier and third-tier Asian destinations as well as a couple of first-tier cities like SIN and BKK that aren't going to get DL nonstops in the foreseeable future. The days of the NW NRT hub were fun, but over.
Delta built up the SEA hub because taking on UA at SFO was not realistic and DL is already doing everything it can at LAX. ATL, DTW and MSP are very long flights to anywhere in Asia and those cities don't make any sense as a connection point for any west coast cities. They cover the SE and upper mid-west very well, but offer nothing to the west half of the country.
When fuel prices were $3/gal and lower prices were not on the horizon, Anderson bet on SEA as a lower-cost domestic alternative for long-haul flights to Asia. SEA still makes sense for most of the big Asian destinations, and the KE joint venture will not change that.
The KE joint venture will help DL with connections to all of the second-tier and third-tier Asian destinations as well as a couple of first-tier cities like SIN and BKK that aren't going to get DL nonstops in the foreseeable future. The days of the NW NRT hub were fun, but over.
Apr 17, 2017, 1:41 pm
#36
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DL is still doubling down in Seattle. They just released this video, for example.
There's a ton of business to be had in Seattle, and they know that Alaska is the only other real player out there and Alaska can't meet a lot of people's needs.
There's a ton of business to be had in Seattle, and they know that Alaska is the only other real player out there and Alaska can't meet a lot of people's needs.
Apr 17, 2017, 2:24 pm
#37
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Not sure why people think is it DL vs AS at SEA, while I think it is DL at SEA vs UA at SFO.
AS is a domestic player, like WN. DL is a network carrier like UA.
Unless you think that if DL is battling AS, then DL might as well be battling WN at ATL...for the same reasons.
AS is a domestic player, like WN. DL is a network carrier like UA.
Unless you think that if DL is battling AS, then DL might as well be battling WN at ATL...for the same reasons.
Apr 17, 2017, 2:28 pm
#38
Join Date: Jul 2014
Posts: 385
N. Korea?
I wanted to start this thread just to see what everyone's opinions are. I think there are several recent developments which may greatly alter the future of Seattle, at least in the way of international expansion.
Factors
- Korean JV. DL is looking at another ~10% cut in capacity across the Pacific.
- DL sees a surplus of widebody capacity, especially across the Pacific, which has already seen the largest of cuts throughout the system.
- 747s are leaving the fleet this year, being replaced (unevenly) by A350s.
Bastian sees the KE JV as a huge win for DL (not disagreeing) but I do think that announcement will commence the real decrease in capacity to Asia. In the next several years I see NRT being completely dismantled, including Guam and Saipan. TBH, over the next severla years I think DL will try to get one more HND slot, and use HND as their sole airport serving Tokyo and remove NRT from the equation completely. The remaining Intra-Asia flights will be cut in lieu of KE's feed through ICN. Bastian is also very excited for the new terminal in ICN which opens later this year.
On the call, and clarification later on, DL will more than likely be deferring or converting some of their widebody orders. Cutting out all of Intra-Asia and reducing capacity across the board in order to focus on ICN, means they won't need the extra lift. The 747s, as we all know, will be gone by EOY. The first A350s won't be arriving on property for another several months and I don't see DL taking delivery of all of them. My guess... they'll take 15, convert 10 to domestic A321s or neo and defer the A330 order a few years in order to push the 767s a little more. 3 767ERs will be leaving the fleet by year end with more than expected to follow in 2018. So... capacity reduction is real across the board.
So, about Seattle. Seattle originally was going to be DL's Asian gateway and the A350s were going to be deployed out there pretty quickly. Expectations were that TPE, KIX (again), MNL or even SIN were going to be added to SEA at one point. I don't think that will be the case anymore personally. Since DL is feeling the pain across the Pacific right now, I think they'll focus on feeding ICN more than anything, making NRT/HND, HKG, PVG and PEK single spokes from the US, and connections onward to MNL and SIN on KE. The 350s will more than likely takeover the DTW-Asia routes and SYD, which should take up at least 6-8 frames, which wouldn't leave much (in my scenario) for a SEA operation, let alone a base. I wouldn't be surprised to see PVG and PEK cut from SEA either, with an upgauge of equipment to ICN.
Disclaimer: I'm not a SEA hater as many on here seem to be. I'm simply looking at the market as it exists right now and making my own predictions.
Factors
- Korean JV. DL is looking at another ~10% cut in capacity across the Pacific.
- DL sees a surplus of widebody capacity, especially across the Pacific, which has already seen the largest of cuts throughout the system.
- 747s are leaving the fleet this year, being replaced (unevenly) by A350s.
Bastian sees the KE JV as a huge win for DL (not disagreeing) but I do think that announcement will commence the real decrease in capacity to Asia. In the next several years I see NRT being completely dismantled, including Guam and Saipan. TBH, over the next severla years I think DL will try to get one more HND slot, and use HND as their sole airport serving Tokyo and remove NRT from the equation completely. The remaining Intra-Asia flights will be cut in lieu of KE's feed through ICN. Bastian is also very excited for the new terminal in ICN which opens later this year.
On the call, and clarification later on, DL will more than likely be deferring or converting some of their widebody orders. Cutting out all of Intra-Asia and reducing capacity across the board in order to focus on ICN, means they won't need the extra lift. The 747s, as we all know, will be gone by EOY. The first A350s won't be arriving on property for another several months and I don't see DL taking delivery of all of them. My guess... they'll take 15, convert 10 to domestic A321s or neo and defer the A330 order a few years in order to push the 767s a little more. 3 767ERs will be leaving the fleet by year end with more than expected to follow in 2018. So... capacity reduction is real across the board.
So, about Seattle. Seattle originally was going to be DL's Asian gateway and the A350s were going to be deployed out there pretty quickly. Expectations were that TPE, KIX (again), MNL or even SIN were going to be added to SEA at one point. I don't think that will be the case anymore personally. Since DL is feeling the pain across the Pacific right now, I think they'll focus on feeding ICN more than anything, making NRT/HND, HKG, PVG and PEK single spokes from the US, and connections onward to MNL and SIN on KE. The 350s will more than likely takeover the DTW-Asia routes and SYD, which should take up at least 6-8 frames, which wouldn't leave much (in my scenario) for a SEA operation, let alone a base. I wouldn't be surprised to see PVG and PEK cut from SEA either, with an upgauge of equipment to ICN.
Disclaimer: I'm not a SEA hater as many on here seem to be. I'm simply looking at the market as it exists right now and making my own predictions.
Dangerous stuff in the Koreas. I'd rethink that for years to come.
Apr 17, 2017, 2:30 pm
#39
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I think DL will continue to grow at SEA. They have put in too much time and money to pull out. DL @sea will just never be as big as UA @SFO Because UA has a head start and SFO has a lot more demand. DL knew they would either need to take on a loss and expand past what is feasible @sea or get a JV partner across the pacific. I think SEA will eventually be finished expanding when it has PVG, PEK, HKG, HND (will replace NRT), an ICN plus two or three additional cities like SIN or TPE. UA will be able to expand into secondary Chinese cities but DL will be happy to feed those passengers to KE.
Apr 17, 2017, 7:19 pm
#40
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Apr 17, 2017, 8:08 pm
#41
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The DL/AS partnership ends this month. All of us loyal AS customers will choose airlines other than DL whenever feasible to travel internationally, including flying out of YVR. I expect AS will look for additional Asian airline partners flying out of SEA. Point of information: currently airfares to Asia are about equal leaving from YVR or SEA and significantly cheaper flying to Europe out of YVR.
Apr 17, 2017, 8:12 pm
#42
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With due respect, that logic is rather weak. You singled out the two (and only TWO) Chinese cities that UA serves and KE doesn't at present, but failed to mention the dozen+ Chinese cities that KE serves and UA doesn't.
Apr 17, 2017, 8:40 pm
#43
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Excluding XIY, which both airlines serve, KE has CSX, DLC, CAN, KWE, HFE, TXN, TNA, KMG, NNG, TAO, SHE, SZX, TSN, WEH, WUH, XMN, YNJ, and CGO while UA has HGH and CTU. Yes, KE could/should expand to other large Chinese cities like HGH and CTU (also CKG, HRB, and FOC come to mind). However, I don't see any reasonable argument saying UA has a better network of Chinese secondary cities than KE.
Apr 17, 2017, 8:48 pm
#44
Join Date: Jan 2007
Posts: 5,679
I am thinking geopolitically that NRT is best, given the current read on the nut cases up north. The bad news is that N. Korea, even under The Donald, is probably not going to be solved there may not be much left of ICN.
Dangerous stuff in the Koreas. I'd rethink that for years to come.
Dangerous stuff in the Koreas. I'd rethink that for years to come.
The problem for KE is the way DL is set up the far ends of the spokes in TPAC arrive fairly late and leave VERY VERY early (i.e. SIN). KE is going to have to shift its' schedule around to make US centric connections. That can create load issues for KE because no one with a choice is going to choose the SIN departure where you need to be at the airport at 4am unless it's at a significant discount.
Hopefully KE and DL have figured out a way to mitigate that risk.
Apr 17, 2017, 9:26 pm
#45
Join Date: Jan 2017
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Excluding XIY, which both airlines serve, KE has CSX, DLC, CAN, KWE, HFE, TXN, TNA, KMG, NNG, TAO, SHE, SZX, TSN, WEH, WUH, XMN, YNJ, and CGO while UA has HGH and CTU. Yes, KE could/should expand to other large Chinese cities like HGH and CTU (also CKG, HRB, and FOC come to mind). However, I don't see any reasonable argument saying UA has a better network of Chinese secondary cities than KE.
If this is going to work, KE is going to have to make a decision between serving its local business traffic, which presumably wants AM flights to these cities, and its JV traffic. Or find a way to increase capacity.
UA already serves some of these through the JV with NH, but some flights have the same issue (AM departure or HND departure rather than NRT). My point being that UA is choosing the prime secondary cities (HGH and CTU are the number 5 and number 7 Chinese metro areas by population and major business hubs) for non-stops from SFO, and it's not clear how well a DL/KE JV will actually compete.
