DL expands SEA further with SEA-SFO flights

[WorldTraveler]

thanks... apparently some of the chief pilot offices in the west are saying that DL has a plan underway to get between 25 and 30 gates at SEA which would make it comparable to JFK in terms of number of gates.

 

[Glenn Quagmire]

I would think SEA-SJD would be a decent vacation market?

 

[WorldTraveler]

AS reaffirmed its intention to remain independent and develop other relationships if working with DL isn't viable.


seems like DL is pretty much taking the tack that it intends to build its network as if AS won't be there.

"Alaska Airlines is determined to remain independent and its financial results are crucial to staving off a takeover, the head of the airline said on Tuesday."
http://finance.yahoo.com/news/alaska-air-ceo-says-performance-224023548.html

 

[WorldTraveler]

the latest volley, PHX, PSP, JAC, and TUS plus an additional HNL starting in Dec 2014

http://finance.yahoo.com/news/delta-offer-nonstop-seattle-palm-173000240.html

 

[WorldTraveler]

here is confirmation of DL's moves

http://airlineroute.net/2014/02/11/dl-sea-w14/

while some sources are reporting that AS has loaded new flights to DTW, MSY, and TPA

DL continues to force AS to deviate from its own strategies in order to try to regain control of the AS-DL business relationship.

 

[Kev3188]

 

while some sources are reporting that AS has loaded new flights to DTW, MSY, and TPA

It's noted here, for those that may be interested:

http://airlineroute.net/2014/02/11/as-sea-jun14/

 

[WorldTraveler]

thanks, Kev.

Longhaul flying by low fare carriers doesn't deliver the financial benefit that it does for higher fare and higher cost carriers because pilot costs are not that different and they burn essentially the same fuel. Ground efficiencies matter less on longer flights which is part of why WN favors shorthaul flying and LFCs have not succeeded on long haul int'l flying. AS has succeeded at longhaul flying from SEA because they have been the dominant if not only carrier on many of those routes, not because their lower costs do much for them.

Specific to the new cities, it is almost certain that AS will not be using the DL terminal at DTW, and they will directly compete with DL without the benefit of connections that they have had in other DL hubs. MSY and TPA are both long routes to cities where other carriers are stronger in the city. IN some cases, DL is not necessarily the strongest carrier even in these SEA markets. MSY is not a terribly large market to SEA but UA and WN both have similar or larger shares of the market than DL... which highlights how this battle between AS and DL has the power to hurt other carriers as much if not more so than DL which has the ability to connect int'l traffic beyond SEA, something other carriers cannot do in anywhere close to a unified hub as DL is building.

Further, SEA is geographically not an ideal location for a domestic hub. Other than in the local market, whatever cost advantage AS has is wiped out by having to carry passengers often 30 to 45 minutes beyond their destination only to have to carry them back. SEA works best as a hub to feed TPAC flights, exactly what DL wanted AS to do via codeshare. Hawaii and Alaska geographically make sense but DL is ensuring that AS gains no benefit from that flying by pushing capacity into the market.

Finally, the domestic capacity that DL is adding to SEA is a fraction of a percent of DL's system capacity. However, AS is having to defend its largest hub and home and has undoubtedly lost the advantage of being the only carrier that serves most of SEA's top domestic markets.

The AS-DL relationship is yet one more example of how DL is using its market strength to achieve its strategic objectives and it is putting its competitors on the defensive. DL's financial performance not only continues to strengthen despite these competitive skirmishes but the same increasing financial performance enables DL to continue to achieve more and more of it strategic objectives while other carriers are left on the defensive.

There hasn't been a network/legacy carrier that has shown the level of strategic control that DL is showing now in years - certainly well before 9/11.

 

[eolesen]

Fixed your post for you:

The AS-DL relationship is yet one more example of how DL is abusing its market strength to achieve its strategic objectives and it is putting its partners on the defensive.

What's left out of Wiley Tyrus's gyrations up there is the fact that all the new additions are on RJ's, with the exception of SEA-HNL which will be on a  753.
 
Don't know about you, but SEA-PSP (~1000 miles), SEA-PHX (~1100 miles) & SEA-TUS (~1200 miles) on an RJ sounds awful.


The enhanced deal between DL and AS was signed in November 2008, and implemented during 2009.

Does anyone know when it comes up for renewal? I'm not looking for speculation, posturing, or pontificating.

If you don't know, don't try to impress everyone by responding with a non-answer.

 

[WorldTraveler]

I'm not sure anyone outside of the specific mgmt areas of both companies know that answer but AS execs themselves have said the contract with DL is a long term contract that involves performance guarantees on both sides.

If they haven't gotten out, I'm sure they would have. And it goes both ways.

OTOH, SEA is clearly providing DL with the gates that DL needs to grow. Thus, the notion that DL would be limited by gates has yet to be shown to be the case with strong indications that SEA is moving forward with an expansion plan that will allow DL to have enough gates to operate a facility comparable in size as DL has at JFK, where DL and DCI operate between 160-175 flights/day. A DL operation of that size in SEA would clearly not only eliminate AS' ability to dominate the local domestic market but would also give SEA an int'l operation that would rival if not surpass anything else by any other single carrier in the western US.

As for large aircraft, you do realize that AA operates 50 flights/day that are over 1000 miles and nearly all are on CR7s although a few are on ERJs? DL has about 125 flights/day on any RJ but all except 15 are on E170/175 jets and none are on 50 seat aircraft. UA has nearly 300 flights/day on RJs that are longer than 1000 miles and a very high percentage are on 50 seat RJs.

DL's pilot contract has limits on large RJs so there will be upgrades of large RJs to mainline elsewhere in the US because DL simply doesn't have any spare large RJs that it can grow in the west w/o upgrading elsewhere.

 

[robbedagain]

Wt you do realize the sea phx tus and psp are on rj not dl mainline if I were a paying customer id choose mainline jet over them rjs if possible any day

 

[WorldTraveler]

yes, I do realize that.

The vast majority of passengers don't even know what aircraft they are flying... they make their purchase decision based on price.
Further, the flights are all operated on large RJs which are reasonably comparable to mainline jets in terms of space.

You do realize that the large RJs that fly for the mainline carriers have artificially low seat counts based on the pilot contracts? The CR9s that US has used with 88 seats seat 76 seats max for the current legacy carriers.


Most of the flights from SEA overall are on Ejets which have comfort on par with mainline jets - and like the CR9s still have artificially low seat counts which means 2 FAs for 76 pax etc

Further, the amount of capacity that DL is offering in any of these markets is so small relative to the market total that anyone who really believes as you do can go on a mainline jet while it won't matter for the vast majority of customers. I guess you also know that half of US' CLT departures are on RJs of some type and 20% are on CRJs.

The most significant part of this announcement is that DL no longer cares about stepping on AA or US' toes leaving DEN as the largest major market in the west that DL doesn't serve from SEA.

Finally, do you realize that about 70% of AA and UA's domestic departures from ORD are on RJs of one form or another and in many cases one of them has RJs in a market where the other has mainline but they both manage to compete? For PHL, it is 30% CRJs.

Both hubs appear to be quite viable.

 

[robbedagain]

Ejets that seat 76 or rjs that seat 76 are still operated by various companies such as republic (repuke) air air wiskey skywest but I do think flying the distances of sea to phx and psp and tus are putting the rjs to the test bec in the future companies like delta could say we only need widebodies for intl and cross country while the rjs do the rest.

 

[WorldTraveler]

see the stat I posted above. DL is mid-tier among AA and UA in terms of the number of flights over 1000 miles and the only one that every fly at that distance is on large RJs.

If the market won't accept those aircraft, DL will get the message - and so will AA and UA.

Right now, there are hundreds of flights on small RJs that are being cancelled due to a lack of pilots.

And DL is still reducing the total number of RJ flights and esp. small RJs more so than either AA, UA, or US and moving those flights to mainline aircraft.

Your argument might have merit - but DL is the least exposed of the big 3 including US based on your argument.

finally, you do realize that AS also has CR7s flying for it via Horizon including markets like TUS to PDX which is also over 1000 miles?

 

[WorldTraveler]

The Wall Street Journal has an article about DL's changing Pacific strategy.

google Delta Shifts Focus From Japan as Trans-Pacific Hub to gain access to the article.

highlights

The shift underscores the growing importance of other Asian markets for the world's third-biggest airline, given the significantly weaker Japanese yen and a growing middle class of Chinese and other Asian travelers who are willing to pay more for direct flights.

Stronger relationships with Chinese state carriers also are helping push the rapid development of nonstop flights into China, with passengers connecting on to the nation's smaller cities, Delta President Ed Bastian said.

"The network structure is realigning based on customer demand, [people] wanting to go direct…and the fact that we are building out Seattle geographically" as an international hub, he said in an interview here.

By summer Japan will account for just 48% of Delta's trans-Pacific passenger capacity, with other direct flights accounting for 52%. The changes will come as the Atlanta-based airline introduces direct flights from Seattle to Seoul, South Korea, and Hong Kong

Delta has remained profitable in Asia over the past five years, with revenue growth of around 60% outpacing a 25% expansion in capacity.

"Demand continues to grow" in Asia, Mr. Bastian said. "These are the greatest growth opportunities in the global market place." He cited China's economic growth, which is running at 7% to 8%.

In China, Delta hopes to work more closely with SkyTeam alliance partners China Eastern Airlines Corp. 600115.SH +0.38% and China Southern Airlines Co. 600029.SH -0.37% to develop hubs in Shanghai and Beijing.

Growth in other Asian markets doesn't mean that Delta is pulling out of or cutting flights to Japan and Narita, which Mr. Bastian said would remain a hub.

-----

again, DL continues to view NRT as a viable ongoing hub, DL has been profitable in Asia since the merger, and DL is committed to growing the SEA hub - int'l and the necessary domestic feed - in order to ensure that DL has multiple options to serve Asia/Pacific markets.

 

[eolesen]

As for large aircraft, you do realize that AA operates 50 flights/day that are over 1000 miles and nearly all are on CR7s although a few are on ERJs? DL has about 125 flights/day on any RJ but all except 15 are on E170/175 jets and none are on 50 seat aircraft. UA has nearly 300 flights/day on RJs that are longer than 1000 miles and a very high percentage are on 50 seat RJs.

 
How many of those routes are flown head to head against someone else, much less someone who is supposedly in a partnership?
 
Personally, I don't really care which carrier is flying 1000+ mile flights on an RJ. Any flight on a CRJ or ERJ for more than two hours is inhumane.

The E-Jets are mildly better, but still not my first choice. The only way to get a rollerbag into the overhead on those is to orient it with the wheels facing the nose or tail. Hardly friendly to those seated around you.

 

Finally, do you realize that about 70% of AA and UA's domestic departures from ORD are on RJs of one form or another and in many cases one of them has RJs in a market where the other has mainline but they both manage to compete? For PHL, it is 30% CRJs.

Both hubs appear to be quite viable.

Sure, but what's the average stage length of those departures, and how often is the mainline competition flying?

That's where you're missing the point.

In a market like LAX-XNA or PDX-TUS, there's no competition. On a 90 minute flight, the difference between a CRJ and a 319 is negligible, especially if it's just a day trip.

On anything longer, if there's a choice of a 319 or 737 vs a CR7, I'll take the full-size jet. If the choice is an ERJ vs. a CRJ, I'll buy based on schedule and alliance affiliation (in that order).