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n7371f
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DL/AS partnership to end

Mon Dec 19, 2016 12:56 pm

KIRO-TV in Seattle just broke story that Delta & Alaska are ending their marketing partnership. No more codeshare & cessation of frequent flier cooperation. Official announcement to come later Monday morning.

I had been told Delta notified Alaska of its desire to to end all relations immediately following original announcement of merger with Virgin America. Both DL & AS had to reach agreement.
 
commavia
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Re: DL/AS partnership to end

Mon Dec 19, 2016 1:28 pm

Official:

Alaska Airlines announces new enhancements to Mileage Plan

https://newsroom.alaskaair.com/2016-12-19-Alaska-Airlines-announces-new-enhancements-to-Mileage-Plan

The new Mileage Plan enhancements and network expansion come as Alaska Airlines and Delta Air Lines announce the end of their partnership effective April 30, 2017.

Effective April 30, 2017, the companies also will no longer offer bookings for travel on each other's flights, through the practice known as code sharing. Both airlines will retain interline agreements so that they can assist passengers traveling on itineraries requiring multiple airlines. To learn more about the change with Delta Air Lines, visit www.alaskaair.com/Delta.


Hardly a surprise. I think everyone paying the slightest bit of attention knew this was only a matter of time. Good that it's finally official.
 
commavia
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Re: DL/AS partnership to end

Mon Dec 19, 2016 1:32 pm

And from Delta:

Delta and Alaska Airlines will end partnership in May 2017

http://news.delta.com/delta-and-alaska-airlines-will-end-partnership-may-2017

Delta will continue its commitment of investment and growth in the Pacific Northwest following a decision by Delta and Alaska Airlines to end their partnership. The decision is a positive milestone for both airlines as Alaska focuses on its merger integration with Virgin America and Delta focuses on creating more customer choice at its Seattle-Tacoma International Airport hub, where it now operates more than 150 peak-day flights to more than 40 destinations.
 
ty97
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Re: DL/AS partnership to end

Mon Dec 19, 2016 2:24 pm

Thanks for sharing. Not a surprise to anyone here that it's finally happened, but good to have confirmation of the inevitable.
 
cledaybuck
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Re: DL/AS partnership to end

Mon Dec 19, 2016 2:31 pm

commavia wrote:
Official:

Alaska Airlines announces new enhancements to Mileage Plan

https://newsroom.alaskaair.com/2016-12-19-Alaska-Airlines-announces-new-enhancements-to-Mileage-Plan

The new Mileage Plan enhancements and network expansion come as Alaska Airlines and Delta Air Lines announce the end of their partnership effective April 30, 2017.

Effective April 30, 2017, the companies also will no longer offer bookings for travel on each other's flights, through the practice known as code sharing. Both airlines will retain interline agreements so that they can assist passengers traveling on itineraries requiring multiple airlines. To learn more about the change with Delta Air Lines, visit http://www.alaskaair.com/Delta.


Hardly a surprise. I think everyone paying the slightest bit of attention knew this was only a matter of time. Good that it's finally official.

Interesting how Alaska buries the news in a press release about Mileage Plan enhancements.
As we celebrate mediocrity, all the boys upstairs want to see, how much you'll pay for what you used to get for free.
 
wedgetail737
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Re: DL/AS partnership to end

Mon Dec 19, 2016 3:03 pm

I'm surprised it took this long for the divorce to be final.
 
hiflyeras
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Re: DL/AS partnership to end

Mon Dec 19, 2016 3:09 pm

AS is definitely trying to make lemonade out of lemons with this announcement. Nice improvements to Mileage Plan and great news that they're sticking with a miles-based program. With the increased accrual from flying their international partners they're trying to mitigate any loss of business from the current DL international code-shares. Lower redemption levels and automatic upgrades for elites (thought they already did this?)...assuming it'll be automatic to their new premium economy section at minimum.
 
jumbojet
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Re: DL/AS partnership to end

Mon Dec 19, 2016 3:13 pm

If this isn't a clear indicator that Delta is serious in Seattle than I don't know what is. This tells me and any other person with half a brain that Delta plans on continuing to grow Seattle. Obviously, any significant growth will have to wait until SEA expansion starts to gain steam but the need or AS is no longer necessary.
 
ahj2000
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Mon Dec 19, 2016 3:30 pm

Well it's about damn time.
Never have I seen two other carriers who share one (and a half (LAX)) hubs market each other, and this has been written on the wall for years.

(Also as an AA guy who likes AS, this makes me happy :P )
-Andrés Juánez
 
wedgetail737
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Re: DL/AS partnership to end

Mon Dec 19, 2016 3:43 pm

jumbojet wrote:
If this isn't a clear indicator that Delta is serious in Seattle than I don't know what is. This tells me and any other person with half a brain that Delta plans on continuing to grow Seattle. Obviously, any significant growth will have to wait until SEA expansion starts to gain steam but the need or AS is no longer necessary.


If VX moves from B to D, C or N, then that would free up one more gate for DL.
 
ckfred
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Re: DL/AS partnership to end

Mon Dec 19, 2016 4:10 pm

I wonder if AS could go back to the Justice Dept. and revise the terms of the merger, with regard to codesharing with AA? People were a bit surprised that DOJ required some changes to the AA/AS marketing partnership, but none to the DL/AS marketing partnership.

Of course, AS might have indicated to the DOJ that it was planning to terminate the partnership, but that it had to work out final details with DL.

Still, it appears that DL is planning to continue to increase its flying out of SEA. So, does the current marketing partnership with AA really have the effects that DOJ claims?
 
commavia
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Re: DL/AS partnership to end

Mon Dec 19, 2016 4:16 pm

ckfred wrote:
I wonder if AS could go back to the Justice Dept. and revise the terms of the merger, with regard to codesharing with AA? People were a bit surprised that DOJ required some changes to the AA/AS marketing partnership, but none to the DL/AS marketing partnership.

Of course, AS might have indicated to the DOJ that it was planning to terminate the partnership, but that it had to work out final details with DL.


I don't think many people were all that surprised that the DOJ concessions focused more on AA than Delta, and for essentially the reason you're stating/implying - it has long been pretty clear to everyone that the marketing/codeshare relationship between Alaska and Delta was not going to be around much longer. Today's news was merely a confirmation of the obvious, and inevitable. And as you say, if it's true that Alaska and Delta effectively elected to end their partnership as soon as the Virgin acquisition was announced, then Alaska may well have told as much to the DOJ.

ckfred wrote:
So, does the current marketing partnership with AA really have the effects that DOJ claims?


Well, frankly, I don't think the concessions the DOJ extracted with respect to the AA partnership are really going to have all that major an effect as the DOJ is claiming, anyway, but of course politicians and bureaucrats need the optics of securing a "win" for "consumers" in order to justify their existence. The DOJ has stripped Alaska of the ability to codeshare with AA on overlapping routes - which essentially amounts to hub-hub markets and some additional routes out of LAX. The fundamental network contribution of the Alaska-AA codeshare to each airline remains in place - AA still gets distribution all throughout the western U.S. on Alaska, and Alaska still gets distribution all throughout the eastern U.S. on AA. In that context, I agree that, if anything, the end of the Delta relationship probably even amplifies the importance of the AA relationship.
 
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enilria
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Re: DL/AS partnership to end

Mon Dec 19, 2016 5:14 pm

I've been saying this was coming whether the DOJ forced it or not. I think AS hoped DOJ would force it to end, but when they apparently didn't they decided to do what it took to make it happen anyway. I even posted back on DOJ approval day an article saying DL was preparing to run reaccomodation for bookings of the DL/AS code share. It appears that article was correct.

It has been speculated that AS would have to pay a substantial fee to break up the deal. I wonder if a) that was true, b) how much it was, and c) if it was about equal to the value of AS gates at DAL (Love Field)?
 
jbs2886
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Re: DL/AS partnership to end

Mon Dec 19, 2016 5:18 pm

enilria wrote:
I've been saying this was coming whether the DOJ forced it or not. I think AS hoped DOJ would force it to end, but when they apparently didn't they decided to do what it took to make it happen anyway. I even posted back on DOJ approval day an article saying DL was preparing to run reaccomodation for bookings of the DL/AS code share. It appears that article was correct.

It has been speculated that AS would have to pay a substantial fee to break up the deal. I wonder if a) that was true, b) how much it was, and c) if it was about equal to the value of AS gates at DAL (Love Field)?


Article says Delta gave notice when AS announced the merger, so AS didn't need the DOJ. Also, I'm sure AS had to pay a breakup fee and Delta would have too, but there was probably a provision permitting Delta to terminate the agreement upon a merger by AS. Finally, I highly doubt the AS gates in DAL had anything to do with it; you are WAY too obsessed with those gates.
 
kabq737
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Re: DL/AS partnership to end

Mon Dec 19, 2016 5:40 pm

Hardly surprising. My father is in corporate aviation so he isn't always in the know when it comes to the airlines. Last year when we went to Seattle he told me to "expect to see nothing but Alaska tails" but when we got there a significant number of aircraft there were Delta aircraft. Delta quite clearly intends to make sure that it has a hub for reaching Asia in the future and it's quite clear that Seattle is the city that will be that hub.

I get the feeling that this will hurt Alaska more than it will hurt Delta. I say this because Alaska doesn't have allot of reach over in the South/South East of the lower 48. Having a partnership with Delta probably fed passengers in from that side of the country that will likely still be obtainable to Alaska but it very well may be harder to do so. Now I'm just waiting for a specific poster (you all know who he is) to come in an thrash me for suggesting Delta did something bad for AS.

Just my :twocents:
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rwsea
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Re: DL/AS partnership to end

Mon Dec 19, 2016 6:00 pm

Being based in PDX, this isn't great news for me. I'm loyal to AS for all of my domestic travel, as they have the best schedule and best connections out of PDX. I travel frequently internationally though, and Delta currently has the best schedule. Not a fan of DL as I've had several poor experiences with them (in business class no less) and they have the worst FF program in the industry. I can only hope that, with this announcement, other AS partners like BA, JL, etc. start direct flights to Portland (or add more destinations out of SEA)... otherwise I may go back to Star Alliance for international flying.
 
commavia
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Re: DL/AS partnership to end

Mon Dec 19, 2016 6:24 pm

enilria wrote:
I've been saying this was coming whether the DOJ forced it or not.


Just about everyone has "been saying this was coming." With respect, it was pretty obvious.

kabq737 wrote:
I get the feeling that this will hurt Alaska more than it will hurt Delta. I say this because Alaska doesn't have allot of reach over in the South/South East of the lower 48. Having a partnership with Delta probably fed passengers in from that side of the country that will likely still be obtainable to Alaska but it very well may be harder to do so. Now I'm just waiting for a specific poster (you all know who he is) to come in an thrash me for suggesting Delta did something bad for AS.


I'm not so sure. There will obviously be pluses and minuses for both airlines, but in the end, Alaska still has the opportunity to access pretty much every offline connecting point in the eastern U.S. now codeshared with Delta via codeshares with AA. Delta, on the other hand, doesn't really have any other alternative for reaching smaller markets in the Pacific Northwest and Alaska. Now, of course, that's precisely what all those CRJs flying in and out of SEA are there for - to replicate the SEA feed network that Delta used to rely on Alaska for. So we'll see - in the end, I tend to expect this will likely be a minimal net impact for both airlines - both will likely recapture much of the lost revenue they generate from the other via other means, so in essence they'll just be exchanging some portion of their current revenue with each other.
 
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N717TW
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Re: DL/AS partnership to end

Mon Dec 19, 2016 6:45 pm

Its fairly standard contract language that a merger or other significant business change triggers an option for the other side to leave the deal without penalty.

The Delta press release, for its part, was equally about promoting its strength rather than discussing an ending relationship.
 
msycajun
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Re: DL/AS partnership to end

Mon Dec 19, 2016 7:01 pm

rwsea wrote:
Being based in PDX, this isn't great news for me. I'm loyal to AS for all of my domestic travel, as they have the best schedule and best connections out of PDX. I travel frequently internationally though, and Delta currently has the best schedule.


Most of us expected the breakup with the DL SEA buildup, but PDX hasn't been mentioned much. SEA will be fine with DL and AS independent, but PDX is a big question mark. How will the DL long-haul flying fare without the codeshare? Will DL add some routes to support them or cut something? LHR in particularly could be vulnerable. Then again, BA might be more likely to add now.
 
rwsea
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Re: DL/AS partnership to end

Mon Dec 19, 2016 7:07 pm

msycajun wrote:
rwsea wrote:
Being based in PDX, this isn't great news for me. I'm loyal to AS for all of my domestic travel, as they have the best schedule and best connections out of PDX. I travel frequently internationally though, and Delta currently has the best schedule.


Most of us expected the breakup with the DL SEA buildup, but PDX hasn't been mentioned much. SEA will be fine with DL and AS independent, but PDX is a big question mark. How will the DL long-haul flying fare without the codeshare? Will DL add some routes to support them or cut something? LHR in particularly could be vulnerable. Then again, BA might be more likely to add now.


The AMS route makes a lot of sense with or without the AS partnership, since Nike's European operations are based there (lots of business pax), and because it's such a strong connecting hub. LHR/FRA with BA/LH would likely have a bit less O&D but do equally well given the connecting options. NRT is maybe more at risk, as the PDX business travel to Asia is more centered on PVG, SIN, and TPE (again due to Nike, Intel, Semiconductor, etc.). All these destinations require connections today, so the direct flight to NRT isn't that much more advantageous vs. connecting in SEA or SFO.

PDX does have service to Iceland with FI, although it's only 2-3 days a week seasonal and isn't a very reliable option for a business traveler (and the J class isn't competitive). A daily BA flight would certainly be the best add in my case.
 
jbs2886
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Re: DL/AS partnership to end

Mon Dec 19, 2016 7:15 pm

rwsea wrote:
msycajun wrote:
rwsea wrote:
Being based in PDX, this isn't great news for me. I'm loyal to AS for all of my domestic travel, as they have the best schedule and best connections out of PDX. I travel frequently internationally though, and Delta currently has the best schedule.


Most of us expected the breakup with the DL SEA buildup, but PDX hasn't been mentioned much. SEA will be fine with DL and AS independent, but PDX is a big question mark. How will the DL long-haul flying fare without the codeshare? Will DL add some routes to support them or cut something? LHR in particularly could be vulnerable. Then again, BA might be more likely to add now.


The AMS route makes a lot of sense with or without the AS partnership, since Nike's European operations are based there (lots of business pax), and because it's such a strong connecting hub. LHR/FRA with BA/LH would likely have a bit less O&D but do equally well given the connecting options. NRT is maybe more at risk, as the PDX business travel to Asia is more centered on PVG, SIN, and TPE (again due to Nike, Intel, Semiconductor, etc.). All these destinations require connections today, so the direct flight to NRT isn't that much more advantageous vs. connecting in SEA or SFO.

PDX does have service to Iceland with FI, although it's only 2-3 days a week seasonal and isn't a very reliable option for a business traveler (and the J class isn't competitive). A daily BA flight would certainly be the best add in my case.


Interesting, I wonder if we would see DL move the NRT flight to PVG, assuming more flights are permitted between US and China (specifically, PVG/PEK).
 
wnflyguy
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Re: DL/AS partnership to end

Mon Dec 19, 2016 7:19 pm

With the DL build up in SEA and the planned LAX expansion it's not a surprise to see this break up.
In the next 3 yrs AS is going to see increased competition up and down California from DL at LAX.
AS needs to move Swiftly with its plans for VX during 2017.
Because 2018 going to bring huge amounts of competition to their key makes from not just DL but WN.
In 2018 WN will be done with its IT upgrades and fleet retirements so it should be a pure growth mode.
I see WN pushing some international plans back a few years for a big battle for California in 2018.

Lastly regarding the DAL gates I see AS keeping them.

Flyguy
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kabq737
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Re: DL/AS partnership to end

Mon Dec 19, 2016 7:37 pm

commavia wrote:
enilria wrote:
I've been saying this was coming whether the DOJ forced it or not.


Just about everyone has "been saying this was coming." With respect, it was pretty obvious.

kabq737 wrote:
I get the feeling that this will hurt Alaska more than it will hurt Delta. I say this because Alaska doesn't have allot of reach over in the South/South East of the lower 48. Having a partnership with Delta probably fed passengers in from that side of the country that will likely still be obtainable to Alaska but it very well may be harder to do so. Now I'm just waiting for a specific poster (you all know who he is) to come in an thrash me for suggesting Delta did something bad for AS.


I'm not so sure. There will obviously be pluses and minuses for both airlines, but in the end, Alaska still has the opportunity to access pretty much every offline connecting point in the eastern U.S. now codeshared with Delta via codeshares with AA. Delta, on the other hand, doesn't really have any other alternative for reaching smaller markets in the Pacific Northwest and Alaska. Now, of course, that's precisely what all those CRJs flying in and out of SEA are there for - to replicate the SEA feed network that Delta used to rely on Alaska for. So we'll see - in the end, I tend to expect this will likely be a minimal net impact for both airlines - both will likely recapture much of the lost revenue they generate from the other via other means, so in essence they'll just be exchanging some portion of their current revenue with each other.


I totally see where you're coming from and I think you thought of some very important points I forgot about. I'm still not sure that Delta wasn't a better fit as an AS partner then American because the service on Delta (in my experience) tends to be better and more on par with AS service levels. Either way only time will tell how this goes!
Been on: 320, 321, 333, 733, 73G, 738, 739, 744, 752, 763, 764, 772, 789, C208, CR7, CR9, BE20, MD83, MD88, MD90, E70, E75, E90, TRIM
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Sightseer
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Re: DL/AS partnership to end

Mon Dec 19, 2016 7:38 pm

And the inevitable has finally come to pass. At the end of the day, I doubt this will have a material effect on either carrier; AS can still access the East Coast & Midwest through the AA codeshare, and DL's network at SEA is probably now broad enough to stand on its own. AS will probably compensate for losing access to DL's ATL network by adding CLT, and DL may add a few select spokes like OAK or IAD.

jbs2886 wrote:
Interesting, I wonder if we would see DL move the NRT flight to PVG, assuming more flights are permitted between US and China (specifically, PVG/PEK).


If relations with KE keep improving, I think PDX-ICN would be more likely. PDX's best bet for China service will be someone like HU.
 
MSPNWA
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Re: DL/AS partnership to end

Mon Dec 19, 2016 7:46 pm

Well, we finally have our answer as to when the partnership would end. Seems to me like AS/VX becoming official made something easier to end the relationship. Unfortunately though for AS the wolf has already made a home in the hen house. It's still a loss for some passengers. Don't see it hurting either airline much however.

One good thing is that they can stop pretending to like each other.
 
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intotheair
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Re: DL/AS partnership to end

Mon Dec 19, 2016 8:00 pm

I thought it was a sign when DL was finally getting into the weeds by starting regional routes like SEA-EUG.

This might be tough for people who relied on AS and DL together, but in the end, I think it will be fine. AS still has AA to lean onto. I switched most of my flying last year to AS and DL, but since I credit everything to AF/KL, it doesn't affect me too much. If anything, Flying Blue members will get even more out of this deal once we will be able to accrue on VX.
300 319 320 321 332 333 345 346 380 717 733 734 735 73G 738 739 744 752 753 762 763 772 77W 788 789 CR2 CR7 CR9 CRK Q400 E175 DC10 MD82 MD90
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EA CO AS
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Re: DL/AS partnership to end

Mon Dec 19, 2016 8:03 pm

commavia wrote:
Just about everyone has "been saying this was coming." With respect, it was pretty obvious.


The one part no one saw coming was DL being the one to terminate the agreement. While it's no secret that AS hasn't been thrilled with DL, they were content to keep the partnership going until the contract ended.
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
incitatus
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Re: DL/AS partnership to end

Mon Dec 19, 2016 8:44 pm

So what is next for Alaska? To announce a long-haul operation out of SEA?
I do not consume Murdoch products including the Wall Street Journal
 
jumbojet
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Re: DL/AS partnership to end

Mon Dec 19, 2016 9:07 pm

incitatus wrote:
So what is next for Alaska? To announce a long-haul operation out of SEA?


When you think about it, being in the region of NA that they are in, you would think they would have already started up some sort of TPAC service by now. I mean, DL has proven that TPAC can be done even with a bunch of old, refurbished 767's.
 
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enilria
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Re: DL/AS partnership to end

Mon Dec 19, 2016 9:15 pm

EA CO AS wrote:
commavia wrote:
Just about everyone has "been saying this was coming." With respect, it was pretty obvious.


The one part no one saw coming was DL being the one to terminate the agreement. While it's no secret that AS hasn't been thrilled with DL, they were content to keep the partnership going until the contract ended.

I suspect that part is either not true or a situation where it is only technically true. I don't think DL really wanted out of the agreement. There is more to this story.
 
commavia
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Re: DL/AS partnership to end

Mon Dec 19, 2016 10:51 pm

A few interesting notes from Alaska's presentation (contained in an SEC filing) about the Delta codeshare termination:

* "Both parties agreed" to terminate the codesharing and marketing relationship
* The impact to Alaska is, as expected, minimal - estimated at $5-10M in 2017 revenue ($15M impact less $5-10M recapture)
* Customer impact expected to be minimal due to, among other reasons, "ability to codeshare with other partners" (cough, AA, cough)
* Delta partnership revenue has declined 72% since 2013, and 80% of the estimated $65M 2016 revenue is from interline rather than codeshare
* Only 8 current Delta codeshare destinations (representing <$500K revenue) are not served by Alaska or another codeshare partner (which are these?)
* Other partners have "already replaced the global utility Delta used to provide" (ouch)
 
jbpdx
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Re: DL/AS partnership to end

Mon Dec 19, 2016 11:17 pm

I always thought AS and AA teaming up and using Portland as a connecting point would be the most logical way to fight back against DL's encroachment on their turf in Seattle. But AA hasn't shown much interest in PDX. This could change that. If OneWorld focused on PDX, they could edge DL's intl presence in Portland with JL to Tokyo, BA to London, CX to Hong Kong, AA to ?, plus rob DL of PDX intl passengers connecting at Seattle. DL is still using 767s to NRT and LHR, and their initial commitment to LHR is weak--->non daily and seasonal. Even if this happened, Delta could probably keep the AMS route. If none of this happens, PDX will end up with a hodgepodge of unrelated intl carriers, CI to Taipei or HU to Beijing, DY to Paris, plus whatever DL kept.

A OneWorld focus in Portland could also hit United by taking PDX Asia-bound passengers now having to connect at SFO.
^
 
jbs2886
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Re: DL/AS partnership to end

Mon Dec 19, 2016 11:27 pm

jbpdx wrote:
DL is still using 767s to NRT and LHR, and their initial commitment to LHR is weak--->non daily and seasonal.


Maybe the demand isn't there and that's why Delta uses 767s. The a.net position that use of a 767 means Delta isn't committed or is somehow screwing the city in SEA/PDX/etc. is just nonsense. JL, or whoever, coming in an using a 787, etc. is not magically going to create massive demand.
 
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11725Flyer
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Re: DL/AS partnership to end

Mon Dec 19, 2016 11:44 pm

n7371f wrote:
KIRO-TV in Seattle just broke story that Delta & Alaska are ending their marketing partnership. No more codeshare & cessation of frequent flier cooperation. Official announcement to come later Monday morning.

I had been told Delta notified Alaska of its desire to to end all relations immediately following original announcement of merger with Virgin America. Both DL & AS had to reach agreement.


I know this is somewhat nuanced, but neither KIRO nor the news articles indicate who initiated the termination of the codeshare. I just wonder if there's a bit more to the story. We'll see.
 
flyboy80
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Re: DL/AS partnership to end

Mon Dec 19, 2016 11:54 pm

The PDX-LHR flight is aimed mostly at O&D right? Perhaps if it does well on the business end, it will go year round. I imagine many of the connecting flights on AF from CDG can be served via KL AMS, and perhaps LHR was very high on PDX's list PDEW and therefore necessitated Delta entering this market instead of the long rumored CDG. NRT is the real question, and I do wonder, now, with the reduced services to NRT from MSP/LAX/NYC is perhaps PDX may benefit from some connecting traffic, but then again that doesn't make too much sense with SEA a mere 130 miles North, and the obvious 'hub' location. I do wonder how ICN compares to NRT in PDEW. I believe Delta served ICN with the MD-11 for most of the 1990s?
 
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seabosdca
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Re: DL/AS partnership to end

Mon Dec 19, 2016 11:58 pm

SEA already has trouble serving as an international hub because its O&D is marginal for that purpose (albeit growing quickly). And PDX serves a catchment area about 60% as big as that of SEA. PDX can't support a major connecting operation and won't yet be a strategic target. The best it can do for the moment is a few point-to-point international flights, i.e., what it has now with an addition here or there.

oneworld will try to respond to DL in SEA by continuing its existing focus on growing its share of the very big LAX pie.
 
MSPNWA
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Re: DL/AS partnership to end

Tue Dec 20, 2016 12:24 am

I can't see how PDX-LHR could be close to profitable without the codeshare.
 
commavia
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Joined: Mon Apr 25, 2005 2:30 am

Re: DL/AS partnership to end

Tue Dec 20, 2016 12:52 am

jbpdx wrote:
I always thought AS and AA teaming up and using Portland as a connecting point would be the most logical way to fight back against DL's encroachment on their turf in Seattle. But AA hasn't shown much interest in PDX. This could change that. If OneWorld focused on PDX, they could edge DL's intl presence in Portland with JL to Tokyo, BA to London, CX to Hong Kong, AA to ?, plus rob DL of PDX intl passengers connecting at Seattle. DL is still using 767s to NRT and LHR, and their initial commitment to LHR is weak--->non daily and seasonal. Even if this happened, Delta could probably keep the AMS route. If none of this happens, PDX will end up with a hodgepodge of unrelated intl carriers, CI to Taipei or HU to Beijing, DY to Paris, plus whatever DL kept.

A OneWorld focus in Portland could also hit United by taking PDX Asia-bound passengers now having to connect at SFO.


I'm not sure I see any dramatic, concerted oneworld "focus" or push in PDX per se, but I definitely do agree that - at least in theory - the end of the Alaska codeshare could have an especially negative effect on some of Delta's longhaul out of PDX given that it obviously benefits from far less feed than the hub in SEA. I think AMS is entirely safe no matter what, and absent any additional competition - important caveat - I suspect that NRT and LHR can probably hang on as PDX is an economically and demographically strong market, these routes are nonstop captive to Delta, and there will obviously be some interline Alaska feed. But that said, if any competition should arrive on either route, I completely agree that it could be very detrimental for Delta. In particular, if BA or JAL were to enter the PDX-LHR and/or PDX-NRT markets, respectively, both would obviously benefit from extensive codeshare/interline feed with Alaska. And I continue to believe that with the NRT hub continuing to draw down, PDX-NRT is likely already "on the bubble," anyway. I don't see any dramatic ramp up for oneworld at PDX, but I think JAL to NRT, BA to LHR and AA to JFK/MIA are all entirely plausible in coming years if/as the market continues to develop.
 
airzona11
Posts: 1773
Joined: Wed Dec 17, 2014 5:44 am

Re: DL/AS partnership to end

Tue Dec 20, 2016 2:57 am

commavia wrote:
jbpdx wrote:
I always thought AS and AA teaming up and using Portland as a connecting point would be the most logical way to fight back against DL's encroachment on their turf in Seattle. But AA hasn't shown much interest in PDX. This could change that. If OneWorld focused on PDX, they could edge DL's intl presence in Portland with JL to Tokyo, BA to London, CX to Hong Kong, AA to ?, plus rob DL of PDX intl passengers connecting at Seattle. DL is still using 767s to NRT and LHR, and their initial commitment to LHR is weak--->non daily and seasonal. Even if this happened, Delta could probably keep the AMS route. If none of this happens, PDX will end up with a hodgepodge of unrelated intl carriers, CI to Taipei or HU to Beijing, DY to Paris, plus whatever DL kept.

A OneWorld focus in Portland could also hit United by taking PDX Asia-bound passengers now having to connect at SFO.


I'm not sure I see any dramatic, concerted oneworld "focus" or push in PDX per se, but I definitely do agree that - at least in theory - the end of the Alaska codeshare could have an especially negative effect on some of Delta's longhaul out of PDX given that it obviously benefits from far less feed than the hub in SEA. I think AMS is entirely safe no matter what, and absent any additional competition - important caveat - I suspect that NRT and LHR can probably hang on as PDX is an economically and demographically strong market, these routes are nonstop captive to Delta, and there will obviously be some interline Alaska feed. But that said, if any competition should arrive on either route, I completely agree that it could be very detrimental for Delta. In particular, if BA or JAL were to enter the PDX-LHR and/or PDX-NRT markets, respectively, both would obviously benefit from extensive codeshare/interline feed with Alaska. And I continue to believe that with the NRT hub continuing to draw down, PDX-NRT is likely already "on the bubble," anyway. I don't see any dramatic ramp up for oneworld at PDX, but I think JAL to NRT, BA to LHR and AA to JFK/MIA are all entirely plausible in coming years if/as the market continues to develop.


I guess what is interesting here is, why would any of those airlines add a non-stop to catch PDX connecting traffic? BA can get feed (and will now get more feed) from AS/AA etc from any of their other destinations served (SEA or others that are on the way). For NRT/JL - they can get AS feed from PDX to SEA/SFO/YVR etc. The few destinations that AS serves exclusively from PDX are not destinations funneling high value long haul traffic.

There are corporate contracts that DL likely has that helps fill up the front and they are starting to become established in the PacNW. Price sensitive shoppers don't have loyalty and will connect if it is cheaper. DL has the ability to fly capable aircraft, that are amortized vs dedicating expensive new jets, often times the High J 764s mean there is paying traffic up front. AS will continue to code share with their many other partners.

There is a lot of hype going on about the value of the PDX originating traffic/ over-hyping AS codeshare value to DL / DL value to AS. Both airlines have admitted it is not a lot of revenue. The writing has been on the wall. AS and DL are very well run airlines and this was certainly not a surprise.
 
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enilria
Posts: 10275
Joined: Fri Feb 22, 2008 7:15 pm

Re: DL/AS partnership to end

Tue Dec 20, 2016 3:02 am

commavia wrote:
A few interesting notes from Alaska's presentation (contained in an SEC filing) about the Delta codeshare termination:

* "Both parties agreed" to terminate the codesharing and marketing relationship
* The impact to Alaska is, as expected, minimal - estimated at $5-10M in 2017 revenue ($15M impact less $5-10M recapture)
* Customer impact expected to be minimal due to, among other reasons, "ability to codeshare with other partners" (cough, AA, cough)
* Delta partnership revenue has declined 72% since 2013, and 80% of the estimated $65M 2016 revenue is from interline rather than codeshare
* Only 8 current Delta codeshare destinations (representing <$500K revenue) are not served by Alaska or another codeshare partner (which are these?)
* Other partners have "already replaced the global utility Delta used to provide" (ouch)

The fact there is no break up fee is very peculiar. I still think there is more to the story. Delta would not have let them out because of their generosity.
 
jumbojet
Posts: 2957
Joined: Mon Dec 29, 2003 3:01 am

Re: DL/AS partnership to end

Tue Dec 20, 2016 3:11 am

seabosdca wrote:
. The best it can do for the moment is a few point-to-point international flights, i.e., what it has now with an addition here or there.


SEA might not be what SFO is but is certainly more than just a few P2P international flights.

Delta TPAC/TATL out of SEA is actually quite impressive considering just 4 years ago, just about none of this list existed.

1. TPAC: HKG, NRT, PVG, PEK, ICN
2. TATL: CDG, AMS (both A332) LHR. In the summer, I believe AMS and CDG are 2x daily.

That's just Delta. There are more carriers that have other international destinations out of SEA. Come to think of it, I don't even think DFW has more international flights than SEA.

This isn't that bad considering DL didn't get serious with SEA until about 2013.

Once renovations are complete and DL has access to more gates at SEA, you can bet your right testicle (and your left one to) that DL's international foot print out of SEA will grow even more. Remember, Rome wasn't built in a day. Delta in Seattle 7 years from now will be much bigger. Seattle and the surrounding area are one of the fastest growing cities in North America.
 
b6sea
Posts: 569
Joined: Mon Aug 22, 2005 5:44 pm

Re: DL/AS partnership to end

Tue Dec 20, 2016 3:49 am

jbs2886 wrote:
enilria wrote:
I've been saying this was coming whether the DOJ forced it or not. I think AS hoped DOJ would force it to end, but when they apparently didn't they decided to do what it took to make it happen anyway. I even posted back on DOJ approval day an article saying DL was preparing to run reaccomodation for bookings of the DL/AS code share. It appears that article was correct.

It has been speculated that AS would have to pay a substantial fee to break up the deal. I wonder if a) that was true, b) how much it was, and c) if it was about equal to the value of AS gates at DAL (Love Field)?


Article says Delta gave notice when AS announced the merger, so AS didn't need the DOJ. Also, I'm sure AS had to pay a breakup fee and Delta would have too, but there was probably a provision permitting Delta to terminate the agreement upon a merger by AS. Finally, I highly doubt the AS gates in DAL had anything to do with it; you are WAY too obsessed with those gates.


WAY WAY WAY WAY WAY TOO OBSESSED HOLY CRAP

Sorry, just needed to get that out of my system. But if I never hear about gates at Dallas Love again it will be far too soon.
 
MSPNWA
Posts: 3698
Joined: Thu Apr 23, 2009 2:48 am

Re: DL/AS partnership to end

Tue Dec 20, 2016 4:04 am

jumbojet wrote:
Delta TPAC/TATL out of SEA is actually quite impressive considering just 4 years ago, just about none of this list existed.

1. TPAC: HKG, NRT, PVG, PEK, ICN
2. TATL: CDG, AMS (both A332) LHR. In the summer, I believe AMS and CDG are 2x daily.

That's just Delta. There are more carriers that have other international destinations out of SEA. Come to think of it, I don't even think DFW has more international flights than SEA.

This isn't that bad considering DL didn't get serious with SEA until about 2013.

Once renovations are complete and DL has access to more gates at SEA, you can bet your right testicle (and your left one to) that DL's international foot print out of SEA will grow even more. Remember, Rome wasn't built in a day. Delta in Seattle 7 years from now will be much bigger. Seattle and the surrounding area are one of the fastest growing cities in North America.


NW and DL weren't even officially merged yet when NRT, PEK, AMS, LHR, and CDG (via AF) existed in some form or another. International has clearly been a struggle for DL. They've shrunk the Pacific from its meager peak, even when forcing more feed through SEA, and they can't go any smaller in gauge for every remaining Pacific flight. More gates isn't an issue. Demand clearly is.
 
jumbojet
Posts: 2957
Joined: Mon Dec 29, 2003 3:01 am

Re: DL/AS partnership to end

Tue Dec 20, 2016 4:18 am

MSPNWA wrote:
jumbojet wrote:
Delta TPAC/TATL out of SEA is actually quite impressive considering just 4 years ago, just about none of this list existed.

1. TPAC: HKG, NRT, PVG, PEK, ICN
2. TATL: CDG, AMS (both A332) LHR. In the summer, I believe AMS and CDG are 2x daily.

That's just Delta. There are more carriers that have other international destinations out of SEA. Come to think of it, I don't even think DFW has more international flights than SEA.

This isn't that bad considering DL didn't get serious with SEA until about 2013.

Once renovations are complete and DL has access to more gates at SEA, you can bet your right testicle (and your left one to) that DL's international foot print out of SEA will grow even more. Remember, Rome wasn't built in a day. Delta in Seattle 7 years from now will be much bigger. Seattle and the surrounding area are one of the fastest growing cities in North America.


NW and DL weren't even officially merged yet when NRT, PEK, AMS, LHR, and CDG (via AF) existed in some form or another. International has clearly been a struggle for DL. They've shrunk the Pacific from its meager peak, even when forcing more feed through SEA, and they can't go any smaller in gauge for every remaining Pacific flight. More gates isn't an issue. Demand clearly is.


So, throw in HKG, PVG, ICN, CDG (own metal), that's not to shabby for 3 years time. Delta is committed to SEA, it will continue to grow, no doubt about that. It sure as heck wont be the powerhouse that SFO is but its definitely holding its own. As the city itself grows, so will the surrounding neighborhoods which will mean increased need for Delta services across both ponds. I keep saying this over and over, DL's foot print in SEA 5 to 7 years from now will be bigger. It doesn't need to be an SFO which I think is what people expect it to become, but it will definitely be bigger and service its purpose. Whether that means 767's, A330's, A350's or 787's, it really doesn't matter. SEA has its own rhythm separate and apart from any other west coast hub,
 
b6sea
Posts: 569
Joined: Mon Aug 22, 2005 5:44 pm

Re: DL/AS partnership to end

Tue Dec 20, 2016 4:25 am

jumbojet wrote:

So, throw in HKG, PVG, ICN, CDG (own metal), that's not to shabby for 3 years time. Delta is committed to SEA, it will continue to grow, no doubt about that. It sure as heck wont be the powerhouse that SFO is but its definitely holding its own. As the city itself grows, so will the surrounding neighborhoods which will mean increased need for Delta services across both ponds. I keep saying this over and over, DL's foot print in SEA 5 to 7 years from now will be bigger. It doesn't need to be an SFO which I think is what people expect it to become, but it will definitely be bigger and service its purpose. Whether that means 767's, A330's, A350's or 787's, it really doesn't matter. SEA has its own rhythm separate and apart from any other west coast hub,


I agree, I think the growth in Seattle will play into DL's asia/pacific growth once they get new aircraft that can provide longer-range service. My guess is that their vision involves India and SE Asia, but that's just a guess. Domestically, I think they'll struggle to compete with AAG in the Northwest and I think they'll scale back some regional flying but continue cherry picking the routes they like as they've been doing.
 
flyboy80
Posts: 2070
Joined: Fri Jul 13, 2001 8:10 am

Re: DL/AS partnership to end

Tue Dec 20, 2016 4:30 am

If BA were to come to PDX they would be putting a 788 on the route most likely? I'm not sure how that airplanes configuration versus a Delta 76T (which is around 208 seats) but perhaps Delta having the option to deploy the smaller 767s give them a bit of an edge on some of the smaller markets. I mean does BA really need to fly to 'every' US city with a 787 when traffic from Oregon can connect in many different ways on both AS and AA through cities like SEA, LAX, or even SFO now. Not to mention United can easily connect a lot of Oregon-LHR routings via SFO.
 
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intotheair
Posts: 1895
Joined: Sun Aug 31, 2014 12:49 pm

Re: DL/AS partnership to end

Tue Dec 20, 2016 4:36 am

b6sea wrote:
jumbojet wrote:

So, throw in HKG, PVG, ICN, CDG (own metal), that's not to shabby for 3 years time. Delta is committed to SEA, it will continue to grow, no doubt about that. It sure as heck wont be the powerhouse that SFO is but its definitely holding its own. As the city itself grows, so will the surrounding neighborhoods which will mean increased need for Delta services across both ponds. I keep saying this over and over, DL's foot print in SEA 5 to 7 years from now will be bigger. It doesn't need to be an SFO which I think is what people expect it to become, but it will definitely be bigger and service its purpose. Whether that means 767's, A330's, A350's or 787's, it really doesn't matter. SEA has its own rhythm separate and apart from any other west coast hub,


I agree, I think the growth in Seattle will play into DL's asia/pacific growth once they get new aircraft that can provide longer-range service. My guess is that their vision involves India and SE Asia, but that's just a guess. Domestically, I think they'll struggle to compete with AAG in the Northwest and I think they'll scale back some regional flying but continue cherry picking the routes they like as they've been doing.


^^^

Also worth pointing out that DL in SEA is much bigger than what UA was in the years leading up to DL ramping up there. UA was the default legacy airline at SEA, and after they dismantled their focus city, all that was left for the better part of a decade was a single NRT flight and a few scattered Skywest-operated routes.
300 319 320 321 332 333 345 346 380 717 733 734 735 73G 738 739 744 752 753 762 763 772 77W 788 789 CR2 CR7 CR9 CRK Q400 E175 DC10 MD82 MD90
AA AF AS AY AZ B6 BA BR DL F9 FI GA HA KF LH MI QX SK SN SQ UA US VY WN
 
grbauc
Posts: 1469
Joined: Sat Mar 28, 2015 9:05 pm

Re: DL/AS partnership to end

Tue Dec 20, 2016 4:45 am

jumbojet wrote:
MSPNWA wrote:
jumbojet wrote:
Delta TPAC/TATL out of SEA is actually quite impressive considering just 4 years ago, just about none of this list existed.

1. TPAC: HKG, NRT, PVG, PEK, ICN
2. TATL: CDG, AMS (both A332) LHR. In the summer, I believe AMS and CDG are 2x daily.

That's just Delta. There are more carriers that have other international destinations out of SEA. Come to think of it, I don't even think DFW has more international flights than SEA.

This isn't that bad considering DL didn't get serious with SEA until about 2013.

Once renovations are complete and DL has access to more gates at SEA, you can bet your right testicle (and your left one to) that DL's international foot print out of SEA will grow even more. Remember, Rome wasn't built in a day. Delta in Seattle 7 years from now will be much bigger. Seattle and the surrounding area are one of the fastest growing cities in North America.


NW and DL weren't even officially merged yet when NRT, PEK, AMS, LHR, and CDG (via AF) existed in some form or another. International has clearly been a struggle for DL. They've shrunk the Pacific from its meager peak, even when forcing more feed through SEA, and they can't go any smaller in gauge for every remaining Pacific flight. More gates isn't an issue. Demand clearly is.


So, throw in HKG, PVG, ICN, CDG (own metal), that's not to shabby for 3 years time. Delta is committed to SEA, it will continue to grow, no doubt about that. It sure as heck wont be the powerhouse that SFO is but its definitely holding its own. As the city itself grows, so will the surrounding neighborhoods which will mean increased need for Delta services across both ponds. I keep saying this over and over, DL's foot print in SEA 5 to 7 years from now will be bigger. It doesn't need to be an SFO which I think is what people expect it to become, but it will definitely be bigger and service its purpose. Whether that means 767's, A330's, A350's or 787's, it really doesn't matter. SEA has its own rhythm separate and apart from any other west coast hub,


(JumboJet)?
Yea you might be right but I see SEA suffering has long has DL is building there second westcoast HUB at LAX. DL has a fine balancing act with closing or shrinking NRT and building Up SEA/LAX at the same time. DL is for sure in a transformational stage and I wonder if they can pull both off. I believe they can but I wonder if they can do both at the same time. To much of the the country that will be heading TPAC I wonder if given the choice would the be more willing to pick LAX or SEA. Both have plus and minuses.
Last edited by grbauc on Tue Dec 20, 2016 5:02 am, edited 1 time in total.
 
jumbojet
Posts: 2957
Joined: Mon Dec 29, 2003 3:01 am

Re: DL/AS partnership to end

Tue Dec 20, 2016 4:45 am

intotheair wrote:
b6sea wrote:
jumbojet wrote:



^^^

Also worth pointing out that DL in SEA is much bigger than what UA was in the years leading up to DL ramping up there. UA was the default legacy airline at SEA, and after they dismantled their focus city, all that was left for the better part of a decade was a single NRT flight and a few scattered Skywest-operated routes.



good points. If not for DL's aggressive expansion at SEA, do you think the port of Seattle would be growing and expanding SEA? According to MSPNWA, half of the international routes DL is flying now out of SEA existed in one fashion or another with DL/NWA pre-merger. I would love to see flight schedules and equipment that was used for these flights.
 
n7371f
Topic Author
Posts: 1836
Joined: Fri Jul 04, 2008 3:54 pm

Re: DL/AS partnership to end

Tue Dec 20, 2016 5:13 am

ckfred wrote:
I wonder if AS could go back to the Justice Dept. and revise the terms of the merger, with regard to codesharing with AA? People were a bit surprised that DOJ required some changes to the AA/AS marketing partnership, but none to the DL/AS marketing partnership.

Of course, AS might have indicated to the DOJ that it was planning to terminate the partnership, but that it had to work out final details with DL.

Still, it appears that DL is planning to continue to increase its flying out of SEA. So, does the current marketing partnership with AA really have the effects that DOJ claims?


The DOJ was aware of the AS/DL partnership ending. DL informed AS the morning after the Virgin America merger announcement it wanted to withdraw. It just took a while for it to be negotiated and couldn't be announced until after the DOJ ruled on the merger.

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