What the Heck is Delta Doing in Seattle?

It started out innocently enough. Delta chose a couple routes where it wanted to add capacity to Seattle, its newest international gateway. Then it added more, and more, and more. Now it’s hard to think of this onslaught as anything but an invasion on the city that its partner (?) Alaska Airlines calls home. I’m really struggling to understand the plan here, but there has to be one.

In the beginning, the moves made sense. Delta, looking to find itself a west coast gateway to Asia, took the only one really available, Seattle. Turns out, that’s not a bad gateway at all. Delta added international flights and relied on Alaska to feed them. The plan seemed to work as the airline continued to add more and more, all while pulling down its Narita hub.

Since then, however, the strategy has become more and more bizarre. Instead of announcing a game plan, the airline has opted to trickle out a route here and a route there. To the best of my knowledge, here’s how it has unfolded.

• Oct 9, 2012 – Delta upgrades Seattle-JFK flights to intl service beginning June 1, 2013.
• Oct 22, 2012 – Delta announces Seattle-Shanghai beginning June 16, 2013.
• Dec 24, 2012 – Delta announces 3 daily Seattle-LA flights beginning April 8, 2013
• Feb 6, 2013 – Delta announces Seattle-Tokyo/Haneda flight beginning June 1, 2013.
• Feb 25, 2013 – Delta announces daily Seattle-Anchorage/Vegas beginning June 10, 2013.
• May 13, 2013 – Delta increases Seattle-LA to 5 daily.
• Jul 29, 2013 – Delta announces Seattle-London/Heathrow beginning March 29, 2014.
• Aug 20, 2013 – Delta cancels Seattle-Osaka service beginning November 4, 2013.
• Aug 24, 2013 – Delta announces daily Seattle-Seoul/Incheon beginning June 2, 2014
• Aug 24, 2013 – Delta announces daily Seattle-Hong Kong beginning June 16, 2014.
• Sep 26, 2013 – Delta increases Seattle-Las Vegas to 3 daily.
• Oct 1, 2013 – Delta announces 6 daily Seattle-San Francisco beginning March 28, 2014.
• Nov 4, 2013 – Delta announces 4 daily Seattle-San Diego beginning June 2, 2014.
• Nov 4, 2013 – Delta announces 4 daily Seattle-Portland beginning September 2, 2014.
• Dec 2, 2013 – Delta announces 5 daily Seattle-Vancouver beginning June 5, 2014.
• Dec 5, 2013 – Delta announces daily Seattle-Fairbanks beginning May 29, 2014.
• Dec 5, 2013 – Delta unveils “Spirit of Seattle” aircraft.
• Dec 16, 2013 – Delta announces daily Seattle-Juneau beginning June 1, 2014.
• Dec 17, 2013 – Delta announces 4 daily Seattle-San Jose beginning September 2, 2014.

Does this look like a descent into madness to anyone else?

The first twinge of weirdness came with those Anchorage and Vegas flights. But I looked at those and I thought it was just utilization flying. After all, both flights were in the evening and seemed like airplanes that were just sitting on the ground anyway. So, a little strange but not a bad idea.

It was the end of September when Delta decided that Vegas would ramp up to 3 daily that I started wondering what was going on. All of a sudden, you had flights that didn’t seem timed for international connections. The addition of San Francisco seemed stranger with much heavier frequency. And then it was off to the races.

The idea that flights were being added to support the international operation is now a joke. Many of these flights are clearly being scheduled in these markets for local Seattle travelers. In some of these markets, there are so few international travelers anyway that it doesn’t make a difference if there was a connection or not. And naming an airplane the “Spirit of Seattle” is just like a dagger. Delta has decided to go scorched earth with one of its previously-dearest partners, Alaska.

If I’m Alaska, I’m somewhat shell-shocked here. I’m not sure why Delta is doing this, but I have three guesses. Maybe you have a better theory.

1. Alaska can’t provide enough feed to Delta. Delta needs more seats and if Alaska won’t provide them, Delta will.
2. Alaska won’t provide feed at a low enough rate so Delta is going to fly its own airplanes. That would be closely tied with #1 since if Alaska flights weren’t full, they’d be much more willing to negotiate a lower rate to fill those seats.
3. Delta wants to try to weaken Alaska enough that it depresses the stock price, making it a cheaper takeover target. Alaska is a well-run airline that wants to stay independent, but numbers are numbers. If Delta can make the numbers work, then it might try to make a move.

In each of these scenarios, Delta is putting pressure on Alaska to get what it wants. Clearly Delta doesn’t think that Alaska can do any harm in response, but Alaska is incredibly strong in Seattle. It’s hugely profitable and so it would take a lot to really bring Alaska down. Delta may also be underestimating Alaska’s willingness to kill the partnership.

There’s no doubt that both sides benefit from their agreement, but if Delta keeps adding, Alaska is effectively helping Delta grow by offering reciprocal frequent flier benefits. The more Delta grows, the more I’d think about walking away if I were Alaska. That would hurt Delta in Seattle significantly. It would hurt more if this fight pushed Alaska further into the arms of American. Then again, if it resulted in Delta buying Alaska, then none of this would apply.

For Alaska’s part so far, it’s responding with a few flights into Salt Lake City and a strengthened frequent flier partnership with its other international partners (all now provide elite qualifying miles). I’m not sure any of this will have an impact on Delta, but it does send the message that Alaska won’t just back down. There could be further consequences.

This will continue to be very interesting for the next year or so. I’m really curious to see how far Delta will take this before reversing course. Maybe if Alaska gives Delta what it wants (your guess as to what that is is as good as mine), then this will stop. But if the assault continues, this partnership could start to deteriorate faster.

[Original image of woman puppeteer via Shutterstock]