Alaska Airlines Gives a Number That Helps Explain Why Some US Airlines Love the Middle East Carriers

Alaska Airlines, Emirates

We’ve seen so much about the fight between the big US and the big Middle East carriers that it’s easy to forget that not every US carrier is behind this effort. There are some US-based airlines that love Middle East airlines and for good reason. Alaska gave a startling statistic in its most recent earnings call showing how some airlines can benefit from the tremendous traffic these Middle East airlines bring into the US.

Alaska Airlines Emirates Partners

Alaska isn’t alone. A new group, US Airlines for Open Skies, has recently ramped up efforts. (If you can’t keep all these silly names straight, you’re not alone.) This group doesn’t think the Middle East airlines need to be kept at bay at all.

Who’s in this group? We have FedEx, Atlas Air, Hawaiian, and JetBlue so far. The cargo carrier stance is obvious. FedEx in particular relies on open skies in the Middle East for a hub operation. It doesn’t want to see that jeopardized by some passenger-carrier spat. For the passenger carriers, it’s a different issue. JetBlue and Hawaiian don’t have designs on serving the Middle East, but they do want to serve the passengers who are traveling there. Let me explain.

Big airlines have no problem creating feed for themselves through their own networks and through their close alliance partners. But for airlines like Hawaiian and JetBlue, there is a big reliance on a variety of other airlines to provide feed to help fill those airplanes. Alaska, though not part of this group (yet), is in the same boat.

Based in Seattle, Alaska doesn’t have an intercontinental network to compete with Delta and its newly-born hub. Instead, Alaska partners with a variety of airlines, some direct competitors with each other, to generate feed and mileage-earning opportunities. These kinds of partnerships are great for Alaska because they enable the airline, via partners, to get its loyal customers where they need to go. At the same time, the partner airlines love it because it gives them access to the Pacific Northwest and beyond in a way they wouldn’t otherwise have.

Emirates is one of those partners and for good reason. Emirates launched a nonstop flight between Dubai and Seattle back in 2012. At the time, it seemed crazy. There couldn’t be much demand to fly between Seattle and Dubai, could there? Maybe not, but there was more demand between Seattle and India, as well as other places beyond Dubai. Emirates could serve that traffic without the help of anyone else, but it still seemed pretty light.

Emirates launched this route with a 777-300ER that holds 304 people in coach and another 50 in the premium cabins. Even with traffic going beyond Dubai, Emirates knew that it couldn’t fill that airplane, so it looked to potential partners.

Before the first flight even landed in Seattle, Emirates and Alaska had announced a frequent flier and interline agreement. Alaska and Emirates loyalists could earn and burn miles on the other airline. More importantly, this created seamless connections where Emirates could issue tickets including Alaska flights, and bags could be checked straight through. (The same is true for the reverse.)

Keep in mind, this isn’t a codeshare. But if someone in say, Anchorage or Walla Walla, needs to go to Dubai or beyond, he could find a connection on Alaska and Emirates that would price on a through fare and make for an easy travel experience.

I always wondered just how successful this partnership was since it didn’t involve a codeshare, but now we know. In its second quarter earnings call, Alaska said that it had been putting 200 people EACH DAY on to Emirates.

I asked Alaska for clarification and found out that this is a systemwide number, but I was told that 95 percent of that traffic flows over Seattle. (There’s probably a little over LA and maybe even less over San Francisco.) This is also each direction, so it’s probably about 95 people per day each way going between Alaska and Emirates in Seattle. That is a huge number. Just think about that. Emirates ran a load factor of just north of 80 percent on this route in 2014. That means that about a third of the seats filled on each Emirates flight from Seattle were filled with people who were also flying Alaska on their journey. That’s a quarter of all seats on the airplane, including the empty ones. (Update: Between launch and last summer, I’m told the first flight was operated during some seasons by a smaller 777-200LR, so that would mean Alaska likely filled an even higher percentage of seats.)

Notice that I said Alaska HAD been putting 200 people on to Emirates. That was before Emirates started its second daily flight on a 777-200LR with another 50 premium cabin seats and 216 coach seats. Now, Alaska is putting 275 people per day on Emirates. Its biggest day ever? One day there were 410 passengers transferred between the two.

You can see how powerful a partnership like this can be. It’s no surprise that smaller US airlines love the Middle East carriers, and really any airline that can help generate more traffic across the network.

[Original airport photo via Shutterstock]

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33 comments on “Alaska Airlines Gives a Number That Helps Explain Why Some US Airlines Love the Middle East Carriers

  1. On the surface, it appears that this is another oil express route, Alaska to the Middle East. Any idea how much of the traffic is related to the oil business, or what the key industries and businesses are on this lane?

    Perhaps the new Dubai – Panama City (Panama) route will also feed some of the Caribbean basin oil business, especially if Venezuela ever gets its political / economic act together and modernizes its oil fields more.

    Given the large South Asian population in Vancouver, I also wonder if Alaska is getting/giving much cross-border feed to carriers in India.

  2. I’d love to know how much of that Alaskan feed is going to DXB as their final. My guess is very little and most are going to India. This makes sense only because of the great geography of the UAE. Let’s say for example I live in Spokane and want to vacation in Mauritius (timely, right?). Delta/AF can get me there but first I have to get to Paris – and then I’m still looking at another 10 hour flight. Otherwise I can so a short hop into Seattle. Take the long flight into DXB and then another short one to MRU. You just can’t beat the location if you’re going to the Indian subcontinent or just about anywhere ringing the Indian Ocean.

    Now if I was heading to TPE my choice would probably be Delta as they have good feed to eastern Asia hubs from SEA and Korean has good routes all over the region to those places DL doesn’t serve.

    The real winner in all this is Seattle and those in the PNW. They have international flight options that cities/regions much larger than theirs don’t enjoy.

        1. The EVA flight is daily and it’s fantastic. I would not fly to Taiwan any other way after many round trips for work (and I have a friend who just did the Vancouver, BC -> Seoul, South Korea -> Taoyuan route with an 18-hour layover in Korea… she save a couple hundred dollars but she was miserable. NOT worth it, IMO).

  3. Well good for Alaska.

    I think in this ‘Alliance’ world we live in, people forget you can get from point A to point C via point B using three different airlines, having bags transfered and having a through fare just like before anyone ever heard or Star, Skyteam and Oneworld. Flying one alliance may not be the ideal world they would have you think, but using two or three non alliance carriers could yield a better travel experence and still get you to where you need to be for the same (give or take) price.

  4. Nice for Alaska that this helps replace some of the Delta connecting international traffic as Delta moves away from that partnership. And with Hainan, they have another non-alliance international partner to help with feed to hedge their bets if the inevitable end of the Delta partnership takes the other Alaska-Skyteam partnerships with it.

    Flying SEA-HNL on AS last week, I saw a ton of boarding passes printed by AF, for example.

    1. I don’t see why an official Delta-Alaska breakup would affect the other Skyteam partners. It’s not exactly the strongest alliance. And many members, like Korean Air, have their own issues with Delta, not unlike Alaska. Hard to see why they would follow Delta’s lead.

  5. I fly for JetBlue and I believe it. Throughout the day, we see many connecting passengers through JFK, flying B6 to smaller towns like ROC, SYR, and RDU.

    1. Has the new SEA -> RDU route on AS made any difference? As an Alaska MVP, it means I will *finally* get to go see my dad without wasting time and not collecting miles on other airlines. Win! :-)

  6. Hey Cap’n, Read this!!! It makes perfect sense, when you stop and think about it. And, Alaska hasn’t changed, r cheapened up their freq. flyer program, unlike Delta and United. This explains why I found the huge number of seats available on Emirates, out of Seattle or LA, getting there on Alaska then switching over on the coast to Emirates! You can do rd trip or one way. I see one ways are available all the time using 40,000 Alaska miles for a a one way Emirates coach seat to Bangkok, Manila, Jakarta, Hanoi, Ho Chi Minh, Phnom Phen, Kuala Lumpur, etc. It’s double that for rd trip. OR, you can go business class either direction for for 80,000 miles, one way, or 160 thou round trip. First class is 100,000 one way and double that for rd trip. The downside is you change planes in Dubai, but there is no extra charge if you want to lay over one two or three days then continue on, or you can catch a net flight within four to five hours. Personally, I don’t see the need to go first class, as both first and business get three 50 pound checked bags and more carry on allowance. Emirates is a pretty deluxe airline, too, like Singapore, or Cathay Pacific, maybe even better. So, their economy class is about as good as Delta’s or United’s business class.
    I think I’m gonna look for a one way business seat going over in January, to Manila, but fly back coach on United, for 40,000 with just a carry on. You really ought to join the frequent flyer program and get an account number and at least get their e-mails of sales, etc. Then, when ready to take out a card, you’re already all set.

  7. Well this is good for Alaska and better for Emirates its really not that big of a deal for AS. According to their website they flew An avg of 880 flights per day, lets say they avg 140 seats per airplane, so your 275 people represent about 1/5th of 1% of their seating capacity. Of course it also represents the viability of the Emirates flight. So I think you may be overstating the importance to AS

    1. Except that it’s important to AS that these people connect to Emirates and not Delta. And it’s important to AS because it gives their passengers an option to fly internationally that they can’t provide themselves. Emirates is a premium carrier in many people’s eyes, and if this partnership gets people to keep flying on AS because they can now fly on Emirates, then that’s why it’s a big deal to AS.

    2. jeff – This is just one small part of Alaska’s partner strategy. While one flight may not make or break Alaska, it’s the whole partnering strategy that becomes incredibly important. Same goes for Hawaiian, JetBlue, and Virgin America. They see no downside to having Emirates and other Middle East carriers increase flying into the US because they benefit tremendously.

      1. Cranky- I’m not saying there’s a downside, just that the specific example you site isn’t that big of a deal in terms of AS’s traffic and support/opposition to the ME3. AA still codeshares with Qatar thru OW and Etihad on some routes and probably has a higher # of passengers connecting to them (though do to scale a small%). I’d be curious to see how Jetblue’s #s compare to AS for this type of traffic though

    3. In the airline business marginal traffic is the ‘icing on the cake’. Assuming Alaska doesn’t add extra flights to meet the demand from EK joining traffic and the per passenger marginal revenue for onward carriage is USD 50/passenger, 275 pax per day is just over USD 5 million per annum which goes straight through to the bottom line. On a net income to common stock in 2014 of USD 605m, that 1/5th of 1% translates to nearly 1% of the bottom line. Easy to see why they would like to see more of that traffic.

      1. If you note I wasn’t saying there was a negative to the arrangement for AS. But Cranky’s point that its a huge deal toward supporting/opposing the ME3 is a bit sketchy at least for AS. Also there will be times that those interline pax are a replacement for other pax which would slightly lower that count. My point isn’t that the relationship isn’t good for AS, its that its only marginally so. Since they still have their relationship with DL and a strong relationship with AA id be fascinated to see the #s on those interline flights (which will obviously be higher due to both opportunity and full codesharing)

  8. Now as someone who has to deal with the mess this AS/EK interline deal creates at times and the numbers do make sense. We usually see 1/3 of the seats going to AS inbound pax. Just recently they had about 200 people coming in on AS

  9. Do we know anything about the pricing on these partner flights? How much goes to Emirates vs Alaska? I’d imagine that one of the advantages of the partner strategy is that there is a bit less price sensitivity since its bundled up into one big ticket price versus Alaska having to fight it out with WN, DL, UA, and AA on the lowest fare..

    1. As far as I know, the Emirates deal is strictly an interline agreement and FFP arrangement, not a codeshare. With only an interline agreement – the two airlines set their own fares and then together are bundled as one ticket price, OR each airline can provide a prorate or selling discount on eachother’s seats for joint fares – ie – Juneau to Male via Emirates on an Emirates fare of $1,900 one way, whereas the JNU-SEA leg will net Alaska a prorate of lets say $95 for that leg, and EK gets the rest.

      1. AS doesn’t really seem to give the middle finger at all costs. I believe they tried with the SLC operation, but it didn’t work.

        If anything AS’s side of the prorate may be smaller to put a thorn in DL’s side, and perhaps get some money for an empty seat. But I doubt they’re going that far on it.

        Sent from my computer that moonlights as a phone.

    2. Nick – There are fares filed by Emirates that go all the way through to the final destination, so there has to be some sort of prorate agreement between Emirates and Alaska. There are a variety of ways they can split this up, but I remember back in the day it was popular to use the square root of the miles flown to determine the split. That doesn’t mean there aren’t a million other ways to do it.

  10. How do these agreements work? Emirates (and other partners) will sell a ticket that includes a segment on Alaska, but so far as I can tell Alaska doesn’t sell online tickets that aren’t on an actual code share. Why the difference? It makes it a bit harder for a loyal Alaska customer to book an international ticket if they have to determine for themselves which partner airlines they can use, then go to them and book it.

    1. Eric C – Good question, and I’m not entirely sure, though others may be able to chime in. Generally, these kinds of things are sold by the dominant carrier which is the overwater carrier in a situation like this.
      If Alaska codeshared on the Dubai flight, then it could sell a ticket the whole way through, of course. I’m trying to think of examples where airlines sell tickets with the other carrier being the dominant carrier on an itinerary and I can’t really think of one off hand. (We’re talking about the marketing carrier, not the operating carrier.)

      Any know of an airline that does that? I seem to remember AA.com used to sell tickets on other airlines but I could be wrong.

      1. Yes, AA.com used to sell tickets on another carrier (in the quite recent past), but it appears not to anymore with non-partners (at least not for SFO-DEN as a test case on which another carrier is by far the most logical option). You have to choose “All carriers” (the default is “American Airlines and American Eagle”; there’s also an “American Airlines, American Eagle and oneworld” option). Now, AA.com doesn’t appear willing to sell a UA-only itinerary, though they are willing to sell an AS-only itinerary (no codeshares involved) for the same price as alaskaair.com. AA.com is also willing to sell pure foreign routes, such as SYD-CAN which obviously has no AA code, though only oneworld airlines show up (including QF operated by CZ but not CZ native).

        My understanding is that AA.com is just acting as on online travel agent, no different than Expedia. They may ticket it in 001 stock, though, whereas normal travel agents (online or not) would ticket on the marketing carriers stock. In fact, I wonder if that’s the difference: maybe UA fares no longer allow ticketing on non-*A stock, and AA.com would be willing to sell a pure UA ticket if the fare rules allowed? It may also be a relatively recent decision that AA would rather drive you towards their own flights or partner flights (even when they’re not likely to get the sale such as SFO-DEN) than pocket the travel agent fees.

        Alaska, like US and Delta that I know of, is only willing to sell you AS-marketed flights through their web site. You can probably call and have a reservations agent ticket a flight with non-AS marketed flights; I don’t know. But I’m pretty sure that’s a business decision, not some rule-based restriction.

        It’s certainly a pain when I want to fly places where no one carrier markets all the way through. I prefer to buy directly from the airline that operates most of the flights when I can, but if I have an itinerary that has to be interline, sometimes I have to go to a travel agent. Seems silly on the airlines’ part to me.

        1. Interesting info, thanks for it. A trip to wiki suggests the terminology for this is “directional interlining”, where one airline can sell a multi-airline itinerary but the other cannot, and the selling airline is the “plating carrier”. What advantage directionality has is still a mystery to me, however. Perhaps it’s less of an issue at the GDS level where most corporate accounts are working?

          This started as an attempt to see what Alaska’s effective Asian route network is and compare it to Delta. This makes it a little bit harder.

          1. Eric C – This one isn’t actually directional interlining. This is a two-way street where they both have the ability to issue tickets and check bags with each other. Sometimes the reason for directionality is a tech or policy issue. I seem to recall that JetBlue may have had those before, but now that it’s on Sabre it’s doing them two ways.

            1. You can buy a ticket from DXB to JNU on Emirates’ website, but you can’t buy JNU to DXB on Alaska’s. There’s some kind of asymmetry happening.

        2. Alex – A few points.

          Yes, anything AA issues would be on 001 stock, which is different from what a travel agent can do. The airlines operate under different rules.
          (Though it does mean that if AA gets to revenue qualifications for elites, then it would be a big deal to buy that on AA.com where it would be on 001 stock even if no AA flight is in the system.)

          UA does allow most fares to be ticketed on other airline stock, but they will charge a penalty for it sometimes. Delta usually does it differently. It just won’t allow its lowest fares to be combined on tickets with other airlines.

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