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Topic: Delta's Plans With SEA?
Username: flyboy80
Posted 2012-08-28 10:23:30 and read 6880 times.

Interested in Delta’s long term plans with their SEA network, and what purpose SEA has the potential to play in the Delta system.

As I see it now it benefits from some good market connectivity with Asia, and Europe from the west coast- but how heavily does it rely on the domestic feed from codeshare partner AS?

What is the current international breakdown for DL in SEA with markets and weekly frequencies? Does it seem likely that HKG will be moved from DTW to SEA, and possibly HND? Would these be A332/3 markets or potentially 767s?

Any past reflections from Delta to support?

Topic: RE: Delta's Plans With SEA?
Username: enilria
Posted 2012-08-28 11:26:59 and read 6625 times.

I think Alaska *is* the Delta SEA network. I believe that at some point in the future there will be a shoot out between DL and AA for AS and one of them will drag AS away by the hair for a merger. At this point, I'd give the edge to Delta, but who knows. If US and AA merge it would be a very opportune time to attempt to force a merger with AS. I say force, because AS has been clear that they do not wish it. I'm not fully aware of all the difficulties involved in foisting a semi-hostile takeover on them, but I'd think if they get some big shareholders behind them it would become a forgone conclusion. The bigger question is what would happen to the AK portion of the AS network. I'm not sure DL would want it. It could end up separate or who knows.

I think HA is also potentially going to be a takeover target down the road because of the extensive TransPac network they are building. Not sure who would be the buyer. UA makes network sense, but it would be a lot of control over the Pacific.

Topic: RE: Delta's Plans With SEA?
Username: wedgetail737
Posted 2012-08-28 13:44:22 and read 6237 times.

Quoting enilria (Reply 1):
The bigger question is what would happen to the AK portion of the AS network. I'm not sure DL would want it. It could end up separate or who knows.

This would be the reason why DL would not absorb AS. Plus, politics would definitely get involved.

Topic: RE: Delta's Plans With SEA?
Username: seabosdca
Posted 2012-08-28 14:08:55 and read 6080 times.

Quoting enilria (Reply 1):
I believe that at some point in the future there will be a shoot out between DL and AA for AS and one of them will drag AS away by the hair for a merger.

I hope that doesn't come to pass. It would just destroy a lot of value for everyone involved. AS has a cost structure that neither DL nor AA can match, and the network is stronger feeding both larger airlines than it would be feeding just one.

DL has to decide what it wants to do with traffic to Asia: fly a bunch of very long flights from the east coast, or connect passengers to shorter flights. If they want to have traffic connect, which seems logical in this economic environment, then a SEA-Asia buildup with 767s and A332s would make sense.

Topic: RE: Delta's Plans With SEA?
Username: TWA772LR
Posted 2012-08-28 14:12:53 and read 6048 times.

Word on the street (street as in a.net) is that DL wants to use a 763ER on SEA-HND.

Quoting enilria (Reply 1):

I still think a AS/HA merger has a better chance than AA or DL/AS; I mean everything internally be streamlined but there still be to different brands as far as the passenger is concerned. You bring up a UA/HA merger. That would give UA an even larger majority in Pacific-USA traffic, which their share is already substantial. And also, I've been dying to see T-tail's in CO colors since the MD-80s left   .

An AS merger with UA or AA or DL wouldn't happen unless AS chooses an alliance.

To play devil's advocate, an HA/AS/B6 super-merger would be huge!   

Topic: RE: Delta's Plans With SEA?
Username: flyboy80
Posted 2012-08-28 14:54:11 and read 5882 times.

It certainly is an oddball situation in SEA with AS/DL. DL's providing international flights from what could be considered a DL hub when you add the AS code to flights. AS+DL in SEA I imagine is significantly larger than DL in SLC and In many of ways it seems Delta hasn't needed a true west coast hub with their relationship with AS and have SEA, and to a smaller extent, PDX- they are highly benefited. All of which raises the merger questions I know- because who is benefits more by this relationship, AS or DL? And when does the time come when DL says they want their full brand extended seamlessly through SEA without codesharing with AS and therefore attempt a takeover/merger? The other school of thought perhaps is that DL likes the international feed from AS, without the responsibility of assuming the risk of operating what is very much a large domestic North/South hub in SEA, and perhaps not as financially viable as just running an international operation.

Topic: RE: Delta's Plans With SEA?
Username: Surfandsnow
Posted 2012-08-28 15:10:05 and read 5790 times.

Quoting flyboy80 (Reply 5):
The other school of thought perhaps is that DL likes the international feed from AS, without the responsibility of assuming the risk of operating what is very much a large domestic North/South hub in SEA, and perhaps not as financially viable as just running an international operation.

  . DL taking on AS's SEA hub would be like WN taking on FL's ATL hub, or going back to other West Coast examples like AA at SJC, US at LAX, etc. The acquiring carrier would be forced to dismantle the established hub for no other reason than an higher cost structure and different network strategy. The status quo is perfect - DL gets lots of feed (and local FFers) without the costs and challenges that come with providing it. Obviously their mutually beneficial partnership with AS at SEA, and also PDX, even LAX appears to be working MUCH better than DL's futile attempts to provide its own domestic feed for new international flights out of other spoke/focus city/international gateway markets like BOS and MIA...

Topic: RE: Delta's Plans With SEA?
Username: BoeingGuy
Posted 2012-08-28 15:15:11 and read 5750 times.

Quoting Surfandsnow (Reply 6):
DL taking on AS's SEA hub would be like WN taking on FL's ATL hub, or going back to other West Coast examples like AA at SJC, US at LAX, etc. The acquiring carrier would be forced to dismantle the established hub for no other reason than an higher cost structure and different network strategy. The status quo is perfect - DL gets lots of feed (and local FFers) without the costs and challenges that come with providing it. Obviously their mutually beneficial partnership with AS at SEA, and also PDX, even LAX appears to be working MUCH better than DL's futile attempts to provide its own domestic feed for new international flights out of other spoke/focus city/international gateway markets like BOS and MIA...

Well said. I've been saying this all along. If DL or AA bought AS, most of AS's route structure would be gone so fast it would make your head spin. I strongly doubt that DL would want AS's niche routes such as SJC-LIH, BLI-HNL, SEA-KTN, etc. Why would they want all those non-stop flights out of SEA to places like MCO, MCI, SAT etc when they can start routing this traffic through their existing hubs at SLC, ATL and MSP.

AS's frequent fliers certainly wouldn't benefit. The Seattle area, state of Alaska, and west coast probably wouldn't benefit (just like CVG and MEM have benefited from airline mergers).

AS's employees wouldn't benefit.

Who does that leave? Maybe (big maybe) some short term shareholders and DL's executives.

Topic: RE: Delta's Plans With SEA?
Username: LAXintl
Posted 2012-08-28 15:24:27 and read 5699 times.

Quoting TWA772LR (Reply 4):
Word on the street (street as in a.net) is that DL wants to use a 763ER on SEA-HND.

Its fact. Their DOT application states 767.

Topic: RE: Delta's Plans With SEA?
Username: Deltal1011man
Posted 2012-08-28 20:22:28 and read 5270 times.

Quoting BoeingGuy (Reply 7):
Why would they want all those non-stop flights out of SEA to places like MCO, MCI, SAT etc when they can start routing this traffic through their existing hubs at SLC, ATL and MSP.

lol. Let me know when Delta can fly any of those cities to.....HKG...and make it work.
and if all of that is true then DEN is United's key hub out west yes? (I'll have to catch the DEN-HKG flight one day)

Quoting BoeingGuy (Reply 7):
AS's employees wouldn't benefit.

hmmm. I'm not sure but I don't think AS has any frontline employees that make more than Delta's. So yeah...if they hate money it could be a long day(and i wont even get into outsourcing....but i will say hey to the AS CFM56s sitting in Delta' engine shop....again, I'm sure those employees would hate to work on them or hire junior people to do it.)

Quoting BoeingGuy (Reply 7):
The Seattle area

Whoa....they don't want more flights/larger aircraft and much more of an international network? Let me guess....they are worried about SJC-LIH?

Quoting BoeingGuy (Reply 7):
state of Alaska

You don't know what delta would keep or not.

Quoting BoeingGuy (Reply 7):
(just like CVG and MEM have benefited from airline mergers)

Err what hubs does Delta have that could be its true hub to Asia?

Topic: RE: Delta's Plans With SEA?
Username: mpdpilot
Posted 2012-08-29 09:23:27 and read 3002 times.

Quoting Surfandsnow (Reply 6):
DL taking on AS's SEA hub would be like WN taking on FL's ATL hub, or going back to other West Coast examples like AA at SJC, US at LAX, etc. The acquiring carrier would be forced to dismantle the established hub for no other reason than an higher cost structure and different network strategy. The status quo is perfect - DL gets lots of feed (and local FFers) without the costs and challenges that come with providing it. Obviously their mutually beneficial partnership with AS at SEA, and also PDX, even LAX appears to be working MUCH better than DL's futile attempts to provide its own domestic feed for new international flights out of other spoke/focus city/international gateway markets like BOS and MIA...
Quoting BoeingGuy (Reply 7):
Well said. I've been saying this all along. If DL or AA bought AS, most of AS's route structure would be gone so fast it would make your head spin. I strongly doubt that DL would want AS's niche routes such as SJC-LIH, BLI-HNL, SEA-KTN, etc. Why would they want all those non-stop flights out of SEA to places like MCO, MCI, SAT etc when they can start routing this traffic through their existing hubs at SLC, ATL and MSP.

Why is it that every time a question of merger surrounding AS comes up the first thing everyone says is that "any merger would be the end of AS network"? Yes AS has a total cost structure that is lower then DL and AA (the most likely merger partners), but that is overall not on a specific opperational basis. Alaska Airlines doesn't offer an extensive network of flights to Alaska because they like the state, it is because they make money. If I had to hasard a quess I would say they make pretty good money on it. Sure DL or AA might not be able to make some of the more touristy routes AS flies work, I am not saying nothing would get cut. However, I just don't see how DL for example merging with AS would mean the end of a large part of their network.

To another point, DL doesn't want to route passengers through their Hubs because they like to, you understand right? It is because the route does not work on its own. When DL, or any airline for that matter, decide to end a route they end it because it is not making money, or the aircraft can make more money doing something else. It is not a guy looking at a map and saying "we can route those passengers over MSP instead".

If DL or AA merged with AS, the combined company would continue to evaluate each route the same as AS and AA and DL do now. They may find that there are some routes that no longer make sense, they may find some new routes that make sense now that didn't before. For example if AS and DL merge, the combined company may add more SEA-ORD service because without AS codeshare AA can sustain 4 dailies but AS can now sustain 3 instead of 2.

You just don't know.

And remember CASM is a value that takes all of the expenses of an airline and divides it by all the Available Seat Miles flown. Just because DL's is like ~16.5 cents and AS is ~13.5 cents doesn't mean for each flight that AS flies it cost them less than DL operating the same flight. DL's 737s might be just as cost effective as AS's 737s, but DL's overall costs are higher because they operate MD-88s and DC-9's. It just depends.

If you have facts that dispute this please do share I would love to learn but otherwise you just don't know.

Topic: RE: Delta's Plans With SEA?
Username: PlanesNTrains
Posted 2012-08-29 09:38:52 and read 2894 times.

Quoting mpdpilot (Reply 10):
If you have facts that dispute this please do share I would love to learn but otherwise you just don't know.

I agree that we don't know.

Having said that, I think much of your post could be read to support such a downsizing just as it could be read the way that you intended.

My personal opinion is that DL/AS would remain a large hub carrier in SEA. However, PDX would be downsized, P2P flying would be downsized or eliminated, SEA-East of the Rockies non-hub flying would be downsized or eliminated entirely, and high frequency on some routes, such as SEA-LAX, would be reduced. Alaska - the state - may remain largely intact, but I could see this being farmed out at some point.

I look at it, to a degree, as a matter of focus. Alaska is focused primarily on Alaska/Seattle/PNW/Mexico/Hawaii. Delta would be focused on Seattle/PNW/Asia/Hub connections/Anchorage, with the rest of Alaska being a big question mark. They don't need a PDX operation of size, they don't need Hawaii, they don't need P2P stuff, etc. They do need a strong SEA hub to feed their international/hub/large metro flying needs - and not much else.

That's just how I see it. Alaska would be cut by a 1/3rd almost definitly, perhaps in 1/2 ultimately. Some new routes would come - and maybe go - but in the end it would not be Alaska Airlines, it would be Seattle.

-Dave

Topic: RE: Delta's Plans With SEA?
Username: wedgetail737
Posted 2012-08-29 09:52:45 and read 2794 times.

At the end of the day, I'll believe it when I see it. Just because DL and AS have a fairly strong partnership at SEA, doesn't necessarily mean that a merger or a takeover is inevitable.

Lastly, we really don't know what DL would with AS' network should a merger occur. However, past experiences and statistics could point otherwise. It's hard to way what would happen in AK, since there hasn't been a real network in AK after a merger. Wien, Mark Air and Reeve all died...never really merged. The closest thing to a merger was maybe Wien and AirCal.

But we do know what happened at PS/US merger, AA/QQ merger, OC/AA merger and maybe to a smaller extent WA/DL merger. I will have to preface that for the WA employees at the time, the DL/WA merger was for the better. So, we would be a little gun-shy or skeptical that DL would leave any significant portion of AS' network intact.

Topic: RE: Delta's Plans With SEA?
Username: FlyingHollander
Posted 2012-08-29 09:57:17 and read 2748 times.

Wouldn't it make more sense for AS to join Skyteam (or maybe Oneworld) rather that a full merger with DL (or maybe AA)?

Topic: RE: Delta's Plans With SEA?
Username: mpdpilot
Posted 2012-08-29 10:21:12 and read 2561 times.

Quoting PlanesNTrains (Reply 11):

Very well articulated

I guess I just see things differently.

As for right now, I think Delta seas SEA as a west coast alternative to the crowd at LAX. They recognize that the money to be had over the pacific is not with a hub at NRT but rather non-stops from the US. They would like to have those at LAX but there is just too much competition from international carriers that doesn't make it worth it. SFO is UA's territory, which leaves SEA. As you say, DL would love to have a large hub at SEA to launch their Pacific flying from. AS provides that to them.

How things change if they merged: I would say that you would see SEA go largely unchanged. PDX wouldn't go down to a spoke but it surely would go down to just a handful of routes that can survive without an connections. Alaska would go largely unchanged. LAX would be the real winner, as I would see DL would finally be large enough to make some of the routes that they struggled with in the past work. Hawaii I think would still work on the routes without a lot of competition. Mexico I think would go pretty unchanged as well perhaps some of the routes moved around like SFO-Mexico route moved to LAX or stuff like that.

I guess with a merger between either DL or AA and AS, though SEA would fill a nice whole in their systems, LAX is the real prize, because with either of them taking on AS market share, they quickly jump to the top position at LAX (difficult to tell by how much due to Skywest being listed separately while operating for both UA and DL). Either way the difficulty at LAX (much like NYC), is that there is so many players that it is difficult to be #1 and get that FF Base, a merger with AS would put DL on top and it would put AA in a league of their own, which would make historically difficult routes easier. Much the same way that DL slot swap has allowed DL to make some smaller markets work out of LGA where in the past it hasn't been able to because there are so many players. Once you become a clear #1 in a market it is very difficult for others to compete, not impossible just difficult.


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