DL expands SEA further with SEA-SFO flights

[eolesen]

If AS is indeed generating 88% of their revenue online, and the codesharing & interline revenue from DL only represents about 4-6% of their revenue, I suspect they'd do fine if that traffic went away overnight.

Certainly, it would be less disruptive to AS than it would be for DL to lose the 1000-1200 pax AS is currently feeding them daily at SEA.

I don't know what percent of DL's connecting traffic is for DL's transpacs, but if it turns out to be >10%, that's more than just a rounding error... it's likely the difference between break-even and loss leader.

 

[WorldTraveler]

you do realize that this whole discussion is about the thousands of seats that DL is adding to the SEA market to feed its int'l network, don't you?

You also realize that it is AS, not DL, that has provided investor guidance that the changing dynamics of the SEA market will affect AS' finances - not DL's, don't you?

We realize that you very much want to believe that DL will lose in all of this but DL is the one that has a strategy figured out for dealing with the partnership that AS didn't want to have.

AS has yet to articulate what it will do to deal with a significant competitive hub in its hometown that will affect AS' own finances.

BTW, apparently AS is adding mainline to PDX-SFO service, a market DL doesn't even fly... but further prove that other carriers including VX and UA will be disproportionately affected by the competitive rearrangement that is taking place on the west coast.

no, Kev, resistance is not futile but it will cost AS more than it will DL whose capacity adds in SEA are a fraction of DL's overall network while SEA is the heart of DL's. In comparison, a competitor would have to be adding hundreds of flights to ATL or close to a hundred to DTW or MSP to come up with the same competitive impact - but that isn't happening.

 

[eolesen]

You still see AS as the bad guy, eh?...

The decision to alienate AS was shortsighted and arrogant, and it was all initiated by DL.

I suspect few people outside of you, the DL executive suite, and perhaps the ACJ see it any differently.

Unlike you, I honestly don't care if DL succeeds or fails. I'm just pointing out the risks involved. It's been a very risky proposition, and it's a fact that previous efforts to build up hubs in secondary markets like PDX and SEA haven't exactly worked out too well in the past.

 

[Kev3188]

Agreed, and I'm not sure DL is taking into account just how loyal people in the Pac NW are to AS.
 
Or maybe it's that arrogance at play, and they think it won't matter. We'll see, I 'spose...

 

[WorldTraveler]

NO, I don't see AS the bad guy. I see them as the ones who foolishly decided to turn their back on a pretty decent business proposal.

DL make it clear several years ago that it was developing SEA into a transpac gateway and contracted with AS to provide feed from the western US for that purpose. DL didn't start service on its own metal to most of the key markets but left it to AS to do so.

Not only did AS not provide the feed that DL needed - DOT data can easily confirm how much traffic AS delivered to DL - but they turned around and sought out one partner after another.
AS couldn't seem to be interested in providing feed to DL but they had no problem signing up other carriers.

Maybe DL wasn't willing to pay what AS wanted - but those prices were well known at the time AS signed the contract.

DL was not the aggressor. AS wanted to play the role of the whore while DL wanted someone that would provide feed.

Feel free to characterize DL any way you wish but it won't change that DL has a hub at SEA that will easily be one-third as large as AS' just this year and DL has already said they intend to keep growing its SEA hub with more domestic growth.

AS will keep growing itself but in so doing will continue to flood the market with seats and push its own yields down beyond what the extra capacity that DL is adding would have done.

If you think PNW passengers are loyal to AS, Kev, you might want to watch the LAX-SEA market this year. Two years ago, DL did not fly it. Last year DL threw (sorry, I forgot you don't like that word) a couple mainline flights in. This year, DL has added even more frequencies as well as more mainline frequencies. By this summer, DL will have about 40% of the seats in the LAX-SEA market that AS has had. Let me know how DL will manage to fill those seats if Seattlites (is that what you call them) are as loyal as you think they are.

 

[robbedagain]

or AS did not want to be bullied by DL and therefore they can make better deals w AA or any other air carrier 

 

[WorldTraveler]

and if they do, I certainly don't slight them.

But neither they nor anyone else should be surprised if they end up with a competitive hub in their hometown.

Again, all of the talk about how loyal PNW flyers are to NW belies the fact that AS has dominated the market.

It is far less clear how loyal those people will be with DL putting capacity in most of AS' major markets that also happen to be major Asia markets.

 

[Kev3188]

Again, all of the talk about how loyal PNW flyers are to NW belies the fact that AS has dominated the market.

Who said anything about NW?

 

[WorldTraveler]

Pacific Northwest.

And yes you are right that should be AS.

But the strength that DL gained in the PNW came to a great degree from NW including the deeper relationship with AS.

Either way, the whole notion that passengers are loyal to AS only works because AS has dominated the market.

You could say the same thing about AA at DFW or CO/UA at EWR. It is not hard to label someone loyal when they don't have many other nonstop options.

The real test of how loyal AS passengers will be to see how much DL moves the LOCAL market to DL/DCI metal this summer when the first big wave of DL's SEA domestic expansion kicks in.

 

[AdAstraPerAspera]

Wow, you have a serious lack of understanding of the Seattle market.
 
People love to say that most travelers only book tickets based on price. And all other things being equal, that's true. But something else happens when you have a hometown airline in a city that was founded and developed there. Alaska airlines enjoys unparalleled community support and pride from the Seattle folk. Local business leaders as well as civic promoters know the benefits of having an airline headquartered in their own town-- where money spent there, stays there. How adaptive it is to the local market. How "plugged in" executives and senior management are to the needs and shifts of the economic health of the city and the greater Seattle area. Only a few cities in the USA enjoy such a relationship with a carrier of Alaska's size anymore. Witness what would happen if, say, Delta were to purchase Hawaiian and merge it into the network. Island business leaders and important civic people (who all spend quite a bit of money on flying, btw) would be apoplectic about having management, jobs, money, and cachet move out of state. And in reality, the pride of having an airline headquartered in your hometown, aside from all the economic benefits and convenience, is something you can't really put a price on. Denver is a great example. For the first few years after WN moved in, they had a hard time competing against Frontier. Yields were in the gutter and most of the passengers were connects from other cities, while F9 had a lock on the local passengers on routes where they competed. And when WN tried to buyout F9, there were rallies and protests against it at the state capitol. It wasn't until Republic bought the company, moved the HQ to Indy, turned the airline into an ULCC and cut back on routes that the people of Denver felt betrayed enough to move on, and it was a very sad thing for the city to endure. Bottom line, if you don't believe that the Seattle chambers of commerce and other local economic promotional institutions aren't trying to steer every possible dollar they can into the hometown hero, you are greatly mistaken.

 

[AdAstraPerAspera]

 

 

[WorldTraveler]

There is nothing unique about SEA with regard to air service than there is at any other airport.

If being the hometown airline is supposed to matter, then why has DL been able to increase its share of the JFK market RELATIVE to B6 despite the fact that DL's HDQ are hundreds of miles south while B6's is practically around the corner.

There is NOTHING that will stop SEA locals from choosing other airlines if given a choice. The only reason that AS has had as high of a share of the market is because no other network carrier has really focused on operating it as a hub.

Feel free to tell us how much the people of SEA will support their hometown carrier. The mere fact that DL upgraded its LAX-SEA route for this summer back to several mainline aircraft after already increasing frequencies via large RJs such that DL's capacity on the route is now about 40% of what AS operates says the market is very much supporting DL's expansion at SEA.

As with so much about this business, the data will eventually become public and it won't be hard to debunk this myth that Seattlites (help me Kev) are as loyal to AS as people here seem to think they are.

 

[AdAstraPerAspera]

LOL, you are truly daft trying to compare the Seattle market to New York. Of course NYC residents have no airline loyalty. Puhleeeze. NYC is home to hundreds of corporate headquarters. Airlines there have come and gone across the decades. They couldn't possibly care less.

 

[FrugalFlyerv2.0]

If being the hometown airline is supposed to matter, then why has DL been able to increase its share of the JFK market RELATIVE to B6 despite the fact that DL's HDQ are hundreds of miles south while B6's is practically around the corner.

Perhaps a better question is why B6, over the course of a dozen or so years has grown to the size it is at JFK inspite of the amazingly awesome DL? 
Now, you  might be tempted to retort that in a similar manner that B6 grew at JFK, DL will be able to grow at SEA.  I doubt it - unless DL is able to somehow obtain even more space (gates / terminal) and have the unwavering support of state + local politicians that B6 enjoyed in NY.  I doubt that will happen.

 

[WorldTraveler]

LOL, you are truly daft trying to compare the Seattle market to New York. Of course NYC residents have no airline loyalty. Puhleeeze. NYC is home to hundreds of corporate headquarters. Airlines there have come and gone across the decades. They couldn't possibly care less.

 except that B6 is hardly known as the airline that caters to corporate traffic.

Again, show us some evidence that anyplace in the US or around the world really breeds the type of brand loyalty in the face of competition - not just because a carrier provides the majority of the seats in the market - that you think exists.

It's nice to think that AS has such greatly loyal customers but I've seen no real proof... but perhaps you have it.
 

Perhaps a better question is why B6, over the course of a dozen or so years has grown to the size it is at JFK inspite of the amazingly awesome DL? 
Now, you  might be tempted to retort that in a similar manner that B6 grew at JFK, DL will be able to grow at SEA.  I doubt it - unless DL is able to somehow obtain even more space (gates / terminal) and have the unwavering support of state + local politicians that B6 enjoyed in NY.  I doubt that will happen.

did you forget that B6 was handed a bunch of slots in order to start service at JFK?

with the facilities that DL has been able to pull together, DL by this summer will be able to offer more than 1/3 of the total seats that AS offers from SEA, IIRC, - and DL is using a lot of large regional jets.

IF DL operated the same mainline/regional aircraft percentage that AS uses, DL's share of the market would be a whole lot higher.

We are less than two months from DL's buildup of domestic capacity at SEA. I have seen no evidence that they are backing down - which they clearly would have to do if the bookings weren't materializing.

Either DL has figured out how to get the bookings from the "opposite end of the flight" from SEA (which in the case of LAX would pretty well blow away the theory about how weak DL is there), from Asia, or AS really doesn't have the loyalty in its hometown that people here think they do.

I just threw another bag of popcorn into the microwave.