Alaska Air Group is a U.S. airline success story, having recovered from a string of miserable, image-tarnishing financial and operational years in the previous decade to become one of the industry?s steadiest and most highly regarded performers.
Now the parent company of Alaska Airlines and Horizon Air is being tested again, this time on its home turf, in a Seattle battle that could see Delta challenge the carrier on corporate contracts and push Alaska Airlines into deeper ties with American Airlines.
The battle also could become a test of the ability of a smaller network carrier to compete against the airline goliaths that consolidation has created.
?One could argue that they are potentially in the crosshairs of a Delta onslaught,? said Michael Linenberg, a Deutsche Bank analyst who recently downgraded the group?s stock, anticipating that an oversupply of Seattle capacity as a result of a buildup by Delta will reduce the company?s projected profits.
?It?s a good company; my sense is that it will be nicely profitable for the foreseeable future,? he said.
But Linenberg also said he believes ?it?s only a matter of time before some of the smaller carriers trying to play in the same sandbox as the bigger carriers? have to become more closely aligned with other airlines or face absorption.
Delta has been growing its presence at Seattle-Tacoma Airport as a gateway to Asia, assisted, paradoxically, by a strong codesharing and frequent flyer partnership with Alaska.
Delta now flies to six international destinations from Seattle, and it begins service to London Heathrow at the end of this month and Seoul and Hong Kong in June. That means Delta will be offering approximately 2,500 seats on international flights out of Seattle each day.
The airline?s big boost in domestic service in Seattle is intended, in part, to provide even more feed to fill seats on those international flights, a Delta spokesman said. Unstated, perhaps, is that offering its own feed gives Delta more control over the flight schedule and the consistency of its product offering, such as in-flight WiFi and multi-class service.
But the buildup goes beyond that. In a March 4 presentation at the Raymond James Financial Institutional Investors Conference, CFO Paul Jacobson referenced Delta?s plans to turn Seattle not just into an international gateway, but also the H-word: a hub.
Last August, Delta created a new executive position: vice president-Seattle. Since then, it has announced new and expanded services that, by year?s end, will give it seven daily flights to Seattle from San Francisco and Los Angeles, five from Las Vegas, Phoenix and Vancouver, and four from Portland, Ore., and San Diego and San Jose, Calif.
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Source: Andrew Compart (2014). Delta takes on Alaska in Seattle, Travel Weekly http://www.travelweekly.com/Travel-News/Airline-News/Delta-takes-on-Alaska-Air-in-Seattle/ published Mar 16, 2014. Viewed Mar 19, 2014.