Feb 15, 2020
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How Will Delta Respond To American And Alaska’s Tie-Up?

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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…

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 LinesHow American Airlines wins big from thisDelta, 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.Delta’s status in SeattleAlaska 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.AdvertisementFeatured Video: Delta has based some Airbus A330neos in Seattle. Photo: AirbusIn 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.American Airlines beat Delta on flights from Seattle to Bengaluru. Photo: Getty ImagesWe 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 has been working on improving its transpacific network out of Seattle. Photo: Getty ImagesFor 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.OverallAmerican 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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