Mon June 30, 2014
Delta, Alaska Airlines Fight For Market Share In Seattle
Originally published on Mon June 30, 2014 12:32 pm
DAVID GREENE, HOST:
In the airline industry, we've gone through a period of mergers, consolidation and downsizing. Because of all this, some airlines have had to disappoint cities. They've stopped using them as hubs, which brings us something unusual at Seattle-Tocoma International Airport. The Northwest News Network's Tom Banse reports that Delta Air Lines has made it its newest hub.
TOM BANSE: I'm about to take you into a rare scene many cities and airport managers would practically die for. Here's the setup - a ceremony in the terminal to christen a new route from Seattle's International Airport. The man at the podium is Delta vice president, Mike Medeiros.
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MIKE MEDEIROS: With the addition of now Hong Kong and the 95 flights that we'll have by the end of this year, Seattle's now Delta's newest hub. So congratulations, Seattle.
BANSE: This announcement was accompanied by a Chinese lion dance. Then came a champagne toast and cake. Two airport fire trucks saluted the transpacific departure with a water cannon arch. The airport and the airline are making a big deal partly because it's been a long time since a major U.S. carrier expanded this way. Delta's Medeiros says by year's end, his carrier will roughly triple its daily departures from Seattle.
MEDEIROS: I think we're in a really unique position because our merger is in the distant past, and all the consolidation, at least from Delta's perspective and our network, is done. And so now we're in a position of growth.
BANSE: The Atlanta-based carrier says Seattle is ideally situated to be its Pacific gateway.
MEDEIROS: You look at the vast majority of the traffic that flows over the United States to Asia. And where does it go over? It goes over Seattle.
BANSE: Delta's buildup has attracted the attention of competitors. The CEO of United Airlines recently mused out loud to analysts that Delta chose Seattle only because the best Pacific launch pad of San Francisco was already taken by United. Some Wall Street analysts and rival executives wonder if Delta has forsaken the discipline that nursed the airline industry back to health. Alaska Air Group CEO, Brad Tilden, claims Delta's rapid growth on his home-turf is adding too many seats.
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BRAD TILDEN: We believe our competitor's actions are creating a surplus of capacity in many of the markets we serve which we'll be dealing with until supply and demand come back into balance which is something we do believe will happen.
BANSE: Delta calls its expansion disciplined and says it is filling its seats. One of the twists here is that Seattle-based Alaska Air and Delta are long-term contractual allies. Pacific Northwest travelers will now get ringside seats to see if two airlines can be partners and rivals at the same time. Passengers waiting in the terminal see potential upside from the dogfight between what you might call airline frenemies. Travelers Erik Parish of Seattle and Travis Rivard of Minneapolis hope added competition pushes down airfares.
TRAVIS RIVARD: That'll be nice to be able come out to the West Coast more, hopefully cheaper, going from hub to hub, be able to fly out to Seattle for cheaper for Minnesota.
ERIK PARISH: Any competitor should be able to come in and take on somebody else. Allegedly we have free markets here.
BANSE: There are airports and politicians around the country that would fall over themselves to lure or keep just one airline's hub, never mind two. Noteworthy here is that Seattle's airport authority didn't need to give away the store. The airport waives lending fees for one or two years for certain international expansions. Delta qualified for that abatement on just a few of its new Pacific routes. For NPR News, I'm Tom Banse in Seattle.
GREENE: This is NPR News. Transcript provided by NPR, Copyright NPR.