The expansion we’ve seen from Delta in Seattle over the past year has been incredible. Last October they announced their Seattle expansion, and that was just the beginning. Now all their flights between Seattle and New York JFK are operated by aircraft with BusinessElite seats, and in addition to their already amazing international route network out of Seattle they recently announced they’ll also add service to Hong Kong, Seoul Incheon, and London.
Not only have they massively increased their international presence out of Seattle, but they’re also sprucing up their domestic service. By next year they’ll have a handful of flights per day between Seattle and Las Vegas, Los Angeles, and San Francisco. They just announced the San Francisco service earlier this week, and I have to imagine it places an interesting strain on their relationship with Alaska Airlines.
Alaska Airlines has always fascinated me. I endearingly refer to them as the “slut of the skies” because they’ll partner with just about any airline. As long as the other airline doesn’t ask for monogamy Alaska is DTF (down to fly).
So Delta’s continuing expansion was obviously initially really exciting for Alaska, since Delta was increasing their international presence out of Seattle, and it was Alaska’s “job” to provide the feeder traffic, since Delta wasn’t putting much of a focus on expanding their domestic route network out of Seattle. Reciprocal mileage earning and elite benefits between the two airlines seemed like a no brainer.
But what happens now? Delta — hands down Alaska’s strongest partner — is going head to head with Alaska on some of their “bread and butter” routes. You certainly can’t blame Delta for wanting to provide feed for their own flights rather than basically “contracting” out to Alaska, but at the same time we all know what increasing capacity in a market does to fares.
The thing about Alaska is that despite the horrible shape the airline industry has been in over the past decade, they’ve been able to do what almost no other airlines has by fairly consistently turning a profit. That’s probably largely thanks to the fact that they don’t have direct competition in so many of their markets.
But as Delta continues to expand in Seattle, and in the words of a Delta VP “Delta and Alaska are ‘fierce competitors,'” it will be interesting to see what happens.
My guess is that they’re eventually hoping for a merger. An Alaska and Delta merger has been rumored for a long time now, and long term it seems like it would be a win-win. Short term Alaska has two choices. They can either continue their non-monogamous relationship with Delta and just take the scraps they’re given (since I doubt Delta is interested in entering smaller markets in the Pacific Northwest), or Alaska can try to “prove a point” and end their relationship. I assume Alaska isn’t thrilled with either option, but they don’t seem to have much leverage here.
What do you guys think? Where is this partnership headed?
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