I predict three scenarios:
1) Alaska-American alliance is a success and keeps Delta amicably at bay (and Delta is ok with that.)
2) Delta and Alaska-American alliance coexist, but is an archival scene not like any seen before!
3) This marks the end of Alaska, American takes over, other airlines cry for divestitures, Delta gets more Seattle gate space, LLC's enter Seattle, Yields go down hill, American and Delta look at each other and question themselves.
If #1, then I think SEA to DL would just be a focus city, playing supplemental to LAX like BOS is to JFK.
I’m not seeing #2 play out. Seattle is just not big enough. DL or AS/AA is going for fortress hub status.
I can definitely see part of #3 play out (AA acquisition of AS) in the next 5-7 years, expedited by an economic downturn that wreaks havoc on the tech and airline industries. The challenge for AS will be “OK, now what?” Once any incremental revenue lift is realized, AS will be looking for the next growth thing. If it’s not abundantly clear, AA will pounce on the BOD. If anyone thinks AA has complacent, surly frontline workers now, just wait until the acquisition-turned bitter AS frontline workers fold into the mix.
AS and AA have a good chance. However, AA has a better record of dismantling vs building.
Two missing pieces of the puzzle:
1. How valuable is AS’s feed of premium customers and on which international routes?
2. What is DL’s TPAC strategy (the real strategy, not the glossy PR version). What role does SEA and LAX play in executing DL’s TPAC strategy? What role does SEA play in DL’s network?
It will be interesting to see how DL responds, not just to SEA but to TPAC as a whole. Preempt some of AA’s launches? Build up and bleed on targeted routes to maintain or obtain share? Poach an Asia Pacific partner from Star Alliance or oneworld? Draw down SEA while building up LAX and moving flow from SEA to LAX, DTW and SLC? This last one validating what a lot of folks have been saying for a while, that SEA for DL is a temporary play.
This is a really good opportunity for AA if they can execute. And no doubt DL has run the risk scenarios and has planned out strategic responses.