How Will Delta Respond To American And Alaska’s Tie-Up?

This was a big week for Seattle and its airport. First, Alaska Airlines announced that it would enter an enhanced partnership with American Airlines and intends to join oneworld. In addition, American Airlines announced new flights to Bengaluru, India, and London from the Emerald City. This now begs the question of Delta: What will happen to Delta’s hub in Seattle?

One of the biggest questions is now what Delta will do in Seattle. Photo: Delta Air Lines

How American Airlines wins big from this

Delta, Alaska, and American primarily operate hub-and-spoke route networks. This means that a number of each airline’s passengers are connecting through a major hub en route to their final destination. However, setting up a new hub is one expensive task.

With this new partnership, American Airlines essentially gets a new hub in Seattle without having to expend a tremendous amount of capital hiring new workers, devoting new aircraft, and building customer amenities like Admirals Clubs and dedicated priority check-in areas. Furthermore, because of Alaska’s hub in Seattle, American is able to add two new long-haul services.

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Delta’s status in Seattle

Alaska Airlines still has a stronger domestic presence in Seattle than Delta. However, Delta does offer some key long-haul transpacific services to East Asia from Seattle. And, Seattle is the main city for Delta’s new Airbus A330-900neo equipped with Delta One Suites.

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Delta A330neo
Delta has based some Airbus A330neos in Seattle. Photo: Airbus

In addition, Delta has made a fair bit of investment in the market. In Seattle, Delta operates two Sky Clubs. And, Delta has upgraded some transcontinental services. Between Seattle and New York, customers can find a premium configured Boeing 757 that has lie-flats in First Class.

What can Delta do now?

Delta is conservative when it comes to route network expansion. The airline has preferred to route passengers through partner hubs rather than launch international flights using its own aircraft. American, on the other hand, has shown a willingness to expand its route network where it sees opportunities. And, connecting Seattle with two major business and tech centers was one that was too big to pass up.

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American Airlines, Shanghai, Beijing
American Airlines beat Delta on flights from Seattle to Bengaluru. Photo: Getty Images

We anticipate that Delta will respond in some way. For one, American and Delta are largely competing in more and more localities such as Los Angeles, New York, Austin, and Boston. Right now, it’s Seattle. How Delta will respond is a different story.

Will Delta launch new routes out of Seattle?

Where American takes risks on new routes, Delta does not. The airline has significantly scaled back its route network in recent years, ending flights to Bucharest, Hong Kong, Malaga, and Istanbul. Two of the biggest additions to Delta’s network were Osaka and Mumbai. Meanwhile, American has a whole slate of new destinations in 2020 ranging from Bengaluru to Christchurch to Casablanca to Krakow among others.

So far, Delta has not yet announced any new long-haul routes out of Seattle. However, Delta is likely not pleased with Alaska and American’s new tie-up. But, for Delta, Seattle was the prime spot from which to start a major transpacific gateway like what San Francisco is to United.

Delta Getty
Delta has been working on improving its transpacific network out of Seattle. Photo: Getty Images

For one, Delta may take a back seat on Asia– a market that is not huge for the carrier as is. Instead, Delta could take a stab at American with expansion into South America thanks to the carrier’s partnership with LATAM.

Overall

American is hitting Delta where it hurts. Seattle is a growing hub for Delta and the carrier has been working on making Seattle a big transpacific gateway. Now, American is taking some of Delta’s thunder with a new route to Bengaluru and, essentially, a brand new hub in a key West Coast city.

In one way, it is too soon for Delta to respond. The airline is known for making more carefully cultivated decisions rather than rash reactions to competitors. But, on the other hand, this is a huge move in an important market for Delta.

How do think Delta will, or should, respond to American and Alaska’s new partnership? Let us know in the comments!

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ChuckMO

Delta knifed former partner Alaska in the back with it’s SEA build up. AS found it’s own knife and responded in kind. Shed no tears for DL.

John

Not really. DL is making SEA it’s Asia/Pacific gateway, something that neither AS nor AA can ever challenge without great expense.

So what if AA has a flight to India, DL has flights to every tier 1 city in Asia except Taipei and Singapore.

AA is competing with its partner BA. And I doubt SEA-LHR can support 4 flights a day.

Mike

DL doesn’t fly to HKG, so add that to the list of tier 1 cities not served from SEA

Jasper K

Also BA just started LHR-PDX and are codesharing with AS

Dominic Yeo

I’m smelling desperation here by American. I think they have a chance of succeeding if they keep much of the transpacific operations on their partners metal, while working the Asia – Central America/ Mexico Latin/ South America routes and focusing on that.

I have no doubt that AA will try to woo a Star Alliance/ SkyTeam member or two to jump ship… at least for transpacific JV, someone who can help them gain market share fast, like Singapore Airlines.

I recall reading that United has been slipping in size. Is it possible for Delta and United to merge in future?

JFP

I see AA seeking to buy AS to reduce domestic capacity and increase fares. AS did that with Virgin America.

Gerry S

Delta has no cause to worry about AAs move. It is a much superior airline concentrating on its own expansion. It will not sweat the small stuff. As to merging with United, not a glimmer in its eyes. United is a strong airline and doing well. As to American concentrating on South American, Mexican and Central American markets? Delta/LATAM will kill them. American needs to become a better company. It needs to be similar to British Airways and Alaska Air in terms of passenger approval etc. That is its true Achilles heel. And it can be fixed; for free.

Jasper K

Possibly new trans-pacific routes out of Portland