Belatedly Pondering Alaska’s Dallas Plans

I’m well aware that it’s been about three weeks since Alaska announced its plans for serving Dallas/Love Field, but I’ve been thinking about it a lot since then. Why do I care? Well, I don’t see a world where Dallas is all that important for Alaska, so I’m trying to find a good reason why the airline is bothering at all. I’m coming up short. It seems like Alaska is trying to solve several problems and in the end, it’s just creating an operational headache.

This issue goes back to Virgin America’s decision a few years ago to try to expand outside of its LA and San Francisco bases. It had covered the big destinations from those cities, but it had more airplanes on order. So it desperately looked for a place to, ahem, spread its wings. When American and US Airways merged, the feds forced them to give up their 2 gates at highly-constrained Dallas/Love Field as well as slots at both Washington/National and New York/LaGuardia. Virgin America started formulating a plan.

The idea was to snag those 2 gates at Love along with slots at National and LaGuardia. Due to perimeter rules at both those airports restricting the distance airlines can fly, Virgin America couldn’t use the slots to fly to its hubs in LA or San Francisco. Instead, the airline would build a mini-hub at Love Field. It would use those two gates to fly east to DC and New York as well as west to its bases in LA and San Francisco. It would fill in the rest of its Love gate capacity by flying a few flights to Austin. Those were never meant to be more than placeholders. Eventually those Austin flights were so miserable that they disappeared and Virgin America started a Vegas flight. This allowed Virgin America to put airplanes somewhere, but with no growth prospects and little relevance to the rest of the system, it was still a puzzling move.

When Alaska acquired Virgin America, the intent of the merger was clear from the outset. Alaska wanted to replicate its success in the Pacific Northwest down in California. It had already started to build up medium-size airports like San Jose and San Diego. But with the addition of Virgin America’s portfolio at LAX and San Francisco, it could now begin to serve the needs of Californians in a much more comprehensive way. Whether that strategy pays off remains to be seen, but it’s at least very clear. How Dallas fits into the mix, however, is not.

Alaska indicated it would keep its gates at Love Field after the merger, so then the question became… how would the airline decide to utilize them? There were several competing needs.

  1. Act as a new destination from Pacific Northwest markets complementing the service to Dallas/Ft Worth that already exists.
  2. Act as a way to maintain service from LA and San Francisco to the Dallas area since it had no DFW service from there.
  3. Act as a way to grow connectivity from smaller California cities into the Dallas area.
  4. Act as a way to continue to maintain those slots at National and LaGuardia since Alaska couldn’t use them to serve any of its west coast markets due to the perimeter rule.
  5. Act as a way to piss off Southwest since it desperately wants those gates.

So what did Alaska decide to do? ALL OF IT.

  1. Alaska will fly twice daily from Seattle and once daily from Portland. One of the Seattle flights will be on a Virgin America A320 while the other flights will be on Embraer 175s.
  2. Alaska will keep three daily flights to Dallas from both Los Angeles and San Francisco. These will be operated by Virgin America Airbuses.
  3. San Jose and San Diego will each get one daily flight to Dallas on Embraer 175 aircraft.
  4. LaGuardia will keep 4 daily flights while National will retain its 3 daily flights.
  5. I’m sure Southwest is pissed.

For you math whizzes out there, you can see this adds up to 18 daily flights, or 9 on each gate. I’ve played with the schedules and can’t quite figure out how all of this positioning is going to work, but it does appear there will be 5 aircraft that spend the night in Dallas with a lot of towing required to get airplanes on and off the gate. Virgin America struggled to run a good operation with such tight constraints in Dallas, and I expect Alaska will have trouble as well.

Sure, 11 of the 18 flights are on 76-seat Embraers, so they should be able to get quicker turns. But you still need everything to go right. And considering perennially-delayed San Francisco and New York/LaGuardia count for 40 percent of the operation, it’s going to be a complete mess. To go back to the five points I made earlier one more time…

  1. Alaska already has up to 4 daily big jets from Seattle and 2 daily flights from Portland to Dallas/Ft Worth. That benefits from the connectivity at codeshare-partner American’s hub. Love might add a little utility for some people, but it hardly seems worthwhile to run the split operation there.
  2. LA and San Francisco would likely benefit more from flights to DFW than these Love options, because they could connect further into the American network. Since these airlines are no longer allowed to codeshare on hub to hub flying, Alaska now has no way to get people in LA and San Francisco to American’s DFW hub.
  3. San Diego already has 3 daily nonstops to Dallas on Southwest while San Jose has 1, so it’s not like Alaska has a service advantage. I’d think these cities would also benefit more from DFW service for the same reasons as mentioned above.
  4. LaGuardia and National provide no benefit to the network. Sure, Alaska can squat on those slots, but will it ever be able to use them to get to the West Coast? It’s unclear. How long do you keep losing money (I assume) before you decide it’s not worth it?
  5. Ok, so pissing off Southwest has to be fun.

In the end, I just don’t see enough strategic value to bother with the operational hassle, no matter how much fun it is to be able to prevent Southwest from growing at its home airport. I know the Alaska team is smart, so I’m just trying to find the angle that made sense to them. Three weeks after the announcement, I’m still searching.

Get Posts via Email When They Go Live or in a Weekly Digest

Leave a Reply

54 Comments on "Belatedly Pondering Alaska’s Dallas Plans"

avatar
Sort by:   newest | oldest | most voted
christophe.bottega
Member

Isn’t that a good way to try to get an additional gate ?

eponymous coward
Guest

There aren’t any. DAL is capped at 20 gates.

Alex Hill
Member

Wasn’t one of the AS/VX merger conditions that they couldn’t divest the within-perimeter DCA and LGA slots or the DAL gates? If so, DAL seems like the least-bad place for them to fly from DCA and LGA, since they at least have artificially-constrained competition.

Tim Dunn
Member
There have been a number of very chat-worthy airline topics of late so it isn’t a surprise this got pushed back… it’s still worth discussing. AS is ultimately doing what it was expected to do which is to build its own bulk on the west coast even if it meant stepping on AA’s toes which this move does. Since AA and AS cannot codeshare on routes to each other’s hubs, AS’ own DFW service lost a little value. Building Love Field helps them compete in the DFW area against AA which obviously has a bigger presence. DAL does add more… Read more »
Daniel
Guest

What is the Delta situation like right now at Love? Last I heard, it was still in the Court of Appeals.

Tim Dunn
Member
it is…. DL remains there with 5 flights/day to Atlanta I believe 4 717s and one 320 for the summer, WN is required to accommodate them. WN says they could expand further above the 10 flights/day per gate if they could but the district judge said that WN can’t add flights until the DL access case is resolved. My gut says that at some point WN will figure out how to operate 12 or more flights/day from 16 gates. Everyone said that 10 flights/day is not possible but LUV has been doing it. DL also did about 10 flights/day from… Read more »
jeff
Member

Cranky,

Independent of the DFW/AA factors most of these are at least rational, SAN maybe less so. If AS is deciding to evaluate DAL catchment as seperate from DFW it may not be as bad as you see. It seems the choice is really between building out the schedule, as they have done, or pulling out of DAL. Plus doesnt AA still actually own the gate rights but are required to sublease them per the merger settlement?

MC
Member

Isnt the AS/AA codeshare going away on some flights due to anti competitive reason when AS bought Virgin and a lot of the routes affected are DFW to the pacific northwest?…..AS will compete with WN on a few routes to the west coast and pacific norhwest, even if only one flt, lower fares….

Alex Hill
Member

Yes. In approving the AS/VX merger, the DOJ required AA and AS to stop codesharing on routes from the west coast to AA hubs, essentially, to encourage AS to serve those routes with its own metal.

Paul
Member

I’ll bet SWA wishes they’d played ball with DAL when they cut that AA/United back door deal.

Now they’re really screwed.

Miss Informed
Guest

I see AS falling out of Love (sorry — someone had to say it!) the moment someone with an appealing amount of cash in hand arrives on the scene. They’ve got their hands on a marketable commodity, and they know it.

Tim Dunn
Member
As long as the DOJ remains involved in the case, the assets are not marketable but the Trump DOJ or DOT has not weighed in on any high profile aviation issues. The Obama DOJ’s order for Virgin America to notify the DOJ if it chose to divest the Love Field gates is still in force and it isn’t clear if there will be any changes under the Trump Administration. whether any of this matters long term to AS remains to be seen but they have the number 2 position at DAL right now. Further, using E175s on many routes is… Read more »
David SF eastbay
Member

They are doing it for two reasons one so Delta won’t get more dates and so they can make some good money selling them later if things don’t work out.

southbay flier
Guest

I would think DL would be pissed off as well. They are the ones who are on the outside looking in and really want those gates. But, then again, the less DL has at DAL, the happier WN will be. I think DL would have provided the most competition at DAL.

Tim Dunn
Member
If nothing else, DL is keeping WN from expanding at DAL until the case is resolved. As for AS and DL, they are competitors; I’m not sure why anyone didn’t come to that conclusion five years ago when DL started to build its domestic feed at Seattle. Further, based on the financial impact to AS when termination of the AS/DL was announced, it was AS that was benefitting from the relationship from DL and not the other way around so it was AS that had a financial impact from termination of the relationship. and the impact to AS from terminating… Read more »
Olorin
Guest

Alaska and Delta are not on friendly terms right now. I wouldn’t be surprised if this is as much about keeping the gates out of Delta’s hands, as anything else.

Seanny
Member

I’ve been wondering if Alaska feels the need for a mid-country hub or focus city of sorts. Chicago or Denver would seem to make more sense though.

eponymous coward
Guest

Chicago (three airlines hubbing there: United, American, Southwest) or Denver (three airlines hubbing there: United, Frontier, Southwest)?

Um, no? As in “you might as well dump some Jet-A on bales of hundred dollar bills and light it on fire?

Seanny
Member

I meant solely from a geographic location, but see your point.

Miss Informed
Guest

Similar thought to my own. Just as long as they don’t try Kansas City/MCI. Is there an airline that has ever had a “real” hub there and has survived? (Reminder: Southwest doesn’t have “hubs.” according to them). I hear St. Louis has a little bit of excess floor space available, Assuming AS is on friendly-enough terms with AA there might be some possibilities for creative interlining.

Captoza
Guest
I don’t believe AA holds the leases on the closed and unused gates in STL any longer since their bankruptcy. This is why part of “D” Concourse has been made part of T2 Some of the “D” Concourse Gates in STL have been made part of Terminal 2 or “E” Concourse for WN for possible expansion. STL has all but handed over the rest of the remaining “D” Concourse Gates to WN if and when they require them. The high number end of “C” Concourse has vacant gates and that part of the Concourse is walled off. “B” Concourse is… Read more »
eponymous coward
Guest

AS serves EWR, JFK and LGA.

AS serves BUR, LAX, SNA, and ONT

AS serves SFO, SJC and OAK (a hub in SFO and focus city in SJC, no less)

AS serves DAL and DFW

I see a pattern here…

Eric A.
Member

I agree with Coward in that split ops dosent deter AS in NYC, the Bay or SoCal. That being said…the Metroplex is solid and growing but nowhere near the regional GDP of NYC,the Bay or SoCal.

Worst case, they are sitting on real estate that will grow in value. IF this dosent work then they will walk with allot of cash.

iahphx
Member

I agree that Alaska isn’t likely to make any money at HOU. I also think it’s wrong for Southwest to get ALL the gates at Hobby. Logic suggests that Delta could make the best use of them. I’m not sure how that ever happens, but maybe it will someday.

George
Guest

Add in DL to reason 5-that’s the ticket!

Tim Dunn
Member
Delta is still at Love Field because the judges so far have all agree that it is likely that Delta could win the case to remain based on airport accommodation requirements and monopoly/antitrust concerns. The disposition of the Virgin America gates won’t change the outcome for Delta because DL would have either been kicked out long ago if the case was merely about real estate laws as WN has said. It is likely that by AS staying in the two gates, WN will have to reduce its operation to enough gates to accommodate DL if a judge rules that way… Read more »
ChuckMO
Guest

I thought for sure that AS would move the LGA/DCA slots elsewhere and focus DAL on the west coast. Obviously I was wrong, for the time being. But if LGA/DCA are messing up DAL for AS, there’s no reason why they cant move them to another station down the line. To me, MKE seemed like a no-brainer, LGA/DCA to MKE and on to SEA/PDX/SFO/LAX. But it will be interesting to watch the continual drama that DAL brings to the market.

the alarmist
Guest

MKE: an airport that many airlines have lost a lot of money at

IO
Member

My 0.01c….it’s probably an AA/AS deal. if AA allows a higher share of the codeshare revenue then that pays for some or all of the losses. This or any other reason, imo, keeps DL from growing at DAL.

hk
Guest

With the love field flights, AS reduced DFW-SEA and PDX to 3 and 1 daily, depending on the season. I agree with you that AS needs to concentrate flights to DFW to enjoy AA’s awesome network. It will be a phase and AS will keep evaluating in the meantime.

Church
Member

Alaska is helping AA out by keeping these gates. If SWA got them there would be 20 more flights competing with AA. They should keep them till SWA has something valuable to swap for them. Those two gates are the only potential growth for SWA at DAL so there only going to increase in value.

Dale M
Guest
DAL versus DFW is much like MDW/ORD and HOU/IAH. If you favor Southwest you use Midway or Hobby, if not you use O’Hare or Bush. It’s not really so much about geography, and note how few airlines duplicate service out of MDW/ORD and HOU/IAH. No point nor need for AS to double-up on the Dallas airports to the west. As for DAL to LaGuardia and National it seems hard to see smaller, higher seat-mile costs will help. There’s just not much of a compelling reason for most people to choose AS* on DAL-LGA and DAL-DCA. If you favor Love you… Read more »
PF
Guest

I prefer DAL to DFW, and like SWA, but if there is a First Class seat on the route, I will consider it, as I have with Virgin America.

Bill from DC
Guest

Can AS just sublease these gates to DL for ab exorbitant fee? I doubt they want to help DL but I’m guessing that enough money would solve that.

Tim Dunn
Member
Delta has already said it won’t pay inflated rates for access to Love Field because federal airport accommodation rules require airport operators to make gates available to airlines that do not have leases and airlines that want to start service where capacity exists at market rates for leaseholding airlines at the airport. Again, the case is slowly working its way through the legal system but the FAA has never waivered in its requirements that airports provide access to airlines that want to serve an airport where the capacity exists. Since Delta is the only airline that completed the request for… Read more »
david
Guest
me and my family travel (SJC/SFO – DFW/DAL) at least once a month. The planes are always packed, doesn’t matter what you fly (VX, Southwest, AA, UA). I think this must be one of the higher margin and under served routes out there. DFW and bay area economy is way stronger than national average and i can tell you there are a lot of bay area people that moved to North Texas. I think Alaska recognized that fact, as well as the proximity of LOV to affluent areas of Dallas. I live in north Fort Worth, and as much as… Read more »
Hal
Member

You totally missed the point that people that reside in Dallas FAR prefer Love Field to DFW and step on any flight to major cities from there rather than have to deal with DFW. Everyone knew this, of course, which is why DFW had to be protected from Love long haul by the Wright Amendment for 40 years.

MeanMeosh
Guest

That used to be true from when DFW was built until the early-mid 90s. It was out in the middle of nowhere, and Collin and Denton Counties were basically a collection of farm towns. Not so much anymore. I live in Plano, and it can be a far more brutal trip down the Tollway or 75 to get to DAL than to hop over to DFW depending on the time of day.

MeanMeosh
Guest

I’m surprised no one’s touched on the other bugaboo out there – I’m not even completely sure that AS can operate a split operation at DFW and DAL long-term. My understanding is that under the Five Party Agreement, any airline that wasn’t grandfathered in must surrender gates at DFW if they start service at DAL. I seem to recall that being given as the reason for VX abandoning DFW when they started service at DAL back in 2014. Maybe I’m wrong about this and it’s not an issue after all.

Tim Dunn
Member
Other than the original agreement to close Love Field in favor of DFW, no airlines other than American and Southwest have ever signed any agreement about what airports they can serve in the Dallas/Ft. Worth Metroplex So far as I know, the only airline that would have to surrender gates is Southwest at Love Field if they start service at DFW. There is no requirement in the other direction. The whole legality of the 5 party agreement is ripe for being challenged since it provided for the two largest carriers in the Dallas/Ft. Worth market to limit each other’s ability… Read more »
gregm
Member

I agree that reliably operating nine flights per gate per day will be a problem with LGA and DCA in the mix.

But next time you’re on a flight from the north side of the DAL concourse, look out the window on the north side of the plane. You’ll see what look to me like a row of remote hardstands – a rarity at US airports.

I’ve never seen a plane parked there. Most likely they’re intended for emergency IRROPS use (e.g., during thunderstorm and tornado season). I suspect AS is thinking about buying buses now….

wpDiscuz