Alaska and Delta Announce Closer Ties

Alaska Airlines, Delta

For years, Alaska has been the slut of the industry, and I don’t mean that in a bad way. The airline has set up codesharing and/or frequent flier agreements with just about everyone without committing to a single partner and that has been a solid strategy for them. Yesterday, Alaska and Delta announced that they would getting even closer, and though many will say this is the end of the “slut” strategy, in my eyes this is just an extension of the existing Northwest partnership.

Don’t get me wrong, I’ll bet that Delta would love to have Alaska alone in the Delta family, but for Alaska, this is just affirmation that they gained a benefit from the Northwest agreement and they want to extend that to the new Delta/Northwest. Here are the details:

  • Reciprocal club access so members of Delta/Northwest clubs get access to Alaska’s and vice versa

  • Priority seat assignments, check-in, and boarding for Platinum and Gold members in each elite program

  • Expanded codesharing on more flights, including the new Delta Seattle-Beijing flight that begins next year

Ok, so what does this really mean? Well, Delta has a big hole in the west and it needs to fill it, especially since it has Pacific aspirations. Codesharing is one thing, but a closer tie-up is much more attractive for elite fliers, and that’s who these airlines want to attract, of course. So let’s look at a couple maps to show why this is good for both, thanks to the Great Circle Mapper. First, how about flights from LAX.

Delta, Northwest, and Alaska in LAX

I’ve gone ahead and shown routes from Delta/Northwest as well as Air France/KLM in blue. You can tell it’s mostly an east-west route structure with longer hauls. This has been the case since Delta dismantled its short-lived hub in Los Angeles recently. But when you overlay Alaska in red, you can see significant north-south operations that mesh quite nicely with the existing Delta route map. Now Delta can have more feed for its longer haul flights, in particular potential new destinations in the Pacific. Now let’s look at Seattle.

Delta, Northwest, and Alaska in Seattle

It’s a similar story here but with much more power added from the Alaska route map. Delta/Northwest/Air France have a smaller presence, but it’s still east-west, long haul based. Alaska, however, while having a strong north-south network also has the ability to bring people in from all over the country to Seattle nonstop. So if Delta really wants to continue to build a Pacific presence, it needs to be able to tap into the western markets, and it has already proven it can’t build that itself. Alaska is the perfect fit for what they want to do.

So will this be the end of Alaska’s cooperation with other airlines? I highly doubt it . . . for now. There’s no reason for Alaska to end its myriad of codeshares unless Delta ends up actually buying Alaska. That wouldn’t surprise me, eventually, but I think Delta would probably like to make sure that this sort of feed will actually be worth trying to buy in the first place. This is a way for them to do that without having to lay out the cash.

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19 comments on “Alaska and Delta Announce Closer Ties

  1. CF, quick question:

    I think (pls correct me) that Hainan Airlines is already doing a Seattle-Beijing service, why on earth does Delta want to add that? If I do my math correctly, SFO already has two daily flights to PEK (CA and UA), as well as two to PVG (also CA and UA), potentially one in the future to Guangzhou (UA) and four daily to HKG (UA, SQ, 2x CX, although CX is possibly reducing in 1Q 2009). Do you really think that, given this incredibly crappy environment for airlines, decreasing pax loads on China flights and HUGE capacity out of SFO that Seattle really can compete in that capacity? ALSO, dare I mention that YVR has tons and tons of HKG and China capacity as well?

    Just a thought

  2. QRC – There’s no question that the big rush for flights to China has resulted in somewhat of a glut. That’s why plenty of airlines have tried to delay the launches of their flights. This one is definitely a bit of a gamble, but Delta really wants to build up its Pacific flights so it’s pushing ahead. I’d say that this definitely fails without the Alaska feed, but with it, it has a shot. Hainan does fly it, but any Alaska fliers will most certainly go to DL now.

  3. An airline exec once said “We could throw 15 flights a day at a route but it wouldn’t necessarily stop the competition from adding one of their own.”

    Branding may be bland but at least as far as frequent flyer programs and shared airport lounges are concerned, DL/NW customers in Seattle will flock to the route for those reasons alone.

    Even though Alaska flies a different traffic pattern from DL/NW, a merger does make sense but may not pass anti-trust reviews in giving Seattle to one airline. AA might make an interesting fit since AA/AS have a long history of cooperation, AA has a long tradition of service to Mexico, the fit at LAX for the two would be attractive and AA would for the first time carry its own colors to Alaska.

    SJC didn’t work so much for them, SEA might.

  4. I’d hate to see Alaska be merged into Delta or AA. They’re such a solid airline with a solid brand and they know what they’re doing. Taking something that works and mucking it up as part of AA or DAL would suck.

    If anything I’d like to see Alaska’s management take over Delta. (The same way Northwest’s management took over Delta..)

  5. I’ve always been a fan of Alaska, but once I moved to San Francisco and started flying more often to the East Coast and Europe I had little choice to switch to United. But I always tried to take their SFO-Vancouver flight.

    Needless to say I was shocked when I discovered they stopped the SFO-YVR flight in September! Any ideas? It was always full.

  6. johnny0 – Not sure about the specifics of the San Francisco to Vancouver run, but it’s entirely possible that it was full of really low fares. In that case, full doesn’t mean profitable.

  7. That’s the weird part — I really hadn’t seen anything under $300 since 2001, when you could get $150. I’m wondering if it had something to do with YVR landing fees? Anyway, strange.

    Nice maps, btw. I love GCM. You should have a nuttiest-flight-segment contest. Here’s my entry, over the space of a week when a last minute work trip interfered with a personal trip.

  8. A merger with Alaska would be great news… for Southwest. EVERY east-west, east coast based airline that’s merged with a West Coast airline has eventually screwed things up and given away traffic to someone else (this is gradually happening with HP/US, too, as the Vegas hub slowly dwindles away into nothing and WN eats Vegas up). I don’t see that DL has any better chance of getting it right the second time. Remember, Delta took over Western Airlines, which basically flew most of the same West Coast/MX/Alaska routes that AS does now, except they flew more out of SLC, and not quite as much in Alaska, and all that’s left behind is the SLC hub- they gave everything else away to AS and WN.

    AA did much the same with Air California/Reno Air… and so on, and so forth.

    Really, the ONLY way a merger makes sense is if the merger partner does with Alaska what Alaska did with Horizon: operate it as an independent entity/wholly owned subsidiary, but with their own branding, fleet, and so on. Fat chance.

  9. Eponymous coward – I don’t think Horizon is a good example. To the extent Horizon is independent it is also a part of Alaska’s network. Sure they have their own branding, and some different service standards, but what makes Horizon different that the current Piedmont Airlines, PSA, or Comair?

  10. “Pacific Southwest Airlines and Piedmont were both major carriers that merged with USAir, which became US Airways, and the corporate names were retained to protect their trademarks. However, the routes, aircraft, and other characteristics of the rebranded regional carriers bear no relation to their namesakes.

    From Wikipedia. Emphasis added.

    Whereas Horizon has been a regional carrier, from when it was founded to now. In fact, the current CEO of Alaska started out as a QX employee.

    Comair is closer to what Horizon is… except it’s STILL using Dl branding, not it’s own. Yeah, I do think keeping your corporate culture instead of being absorbed into the Borg helps.

  11. Also, PSA is another example of a West Coast carrier that got destroyed by an East Coast carrier (US), so once again, there’s no reason to believe that AS being acquired by any large carrier is anything but good news for OTHER airlines who want Alaska’s West Coast market share, and aren’t run by complete tools (read: WN).

  12. Umm, where are you getting the AS SEA-IAH route on your map? It’s operated by CO, and then is only available on AS as part of another routing PDX-SEA-IAH for example.

    As for the YVR-SFO route, AS needed the planes to try and beat back Virgin America, they canceled YVR-LAS as well

  13. CZBB- maybe that’s SEA-CUN, but blacked out by the Caribbean? The line would go through CUN if you continued it, and AS does do that route seasonally.

  14. eponymous coward — I said the current Piedmont and PSA. Not the historical ones that USAir Group bought.

    Yes, Horizon still flies under its own name and brand, but in may ways Horizon is just Alaska’s way of saying Alaska Express/Connection/Airlink etc… Also the Horizon brand is a very close variant of the Alaska brand. Farther than any other feeder carrier, but still a variant of the Alaska brand.

    It also helps that their corporate cultures were pretty close to begin with. I recall reading an article that said that was part of the driving force behind the merger.

  15. Alaska did not drop the SFO-YVR flight to free up aircraft in order to fight back against Virgin America. Alaska is not losing any market share. However, the additional aircraft time by the loss of the above market has been redirected to MSP/KOA/Mexico and two new destinations that are planned for 2009. Alaska has THE best balance sheet of all of the major players. Air Transport World even said that their balance sheet is stronger than Southwest’s! Alaska is a great airline company.

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