Alaska Air Group, Inc. (ALK): Delta Air Lines, Inc. (DAL) Ups the Ante in Seattle

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Over the past several years, Seattle has become an important international gateway for Delta Air Lines, Inc. (NYSE:DAL). While Delta Air Lines, Inc. (NYSE:DAL) does not operate a hub in Seattle, it began code-sharing with Seattle-based Alaska Air Group, Inc. (NYSE:ALK) in 2005 and has gradually expanded that partnership . This relationship simplifies connections between Alaska Air Group, Inc. (NYSE:ALK)’s extensive Seattle-based route network and Delta Air Lines, Inc. (NYSE:DAL)’s flights from Seattle (especially international flights).

Delta Air Lines, Inc. (NYSE:DAL)

In the past year, Delta Air Lines, Inc. (NYSE:DAL) has doubled down on its Seattle presence. The carrier has announced (or begun serving) several new international routes, has added service to Los Angeles — its other West Coast international gateway — and has upgraded its amenities in Seattle. These initiatives are likely to solidify Delta Air Lines, Inc. (NYSE:DAL)’s place as the carrier of choice for international travel from Seattle and as Alaska Air Group, Inc. (NYSE:ALK)’s primary partner. They will also boost Delta Air Lines, Inc. (NYSE:DAL)’s market share for travel between the U.S. and Asia.

A natural strategy

Geographically, Seattle is an ideal connection point for fliers traveling between the U.S. and East Asia, due to its location in the northwest corner of the U.S. Seattle is even a good connection point between the West Coast and Europe. However, Alaska Airlines is the only carrier with a hub in Seattle, and its all-The Boeing Company (NYSE:BA) 737 fleet does not have enough range to fly to Europe or Asia.

Meanwhile, Delta’s network is primarily centered in the eastern half of the U.S.; its largest hubs are in Atlanta, Detroit, and Minneapolis/St. Paul . None of these cities is a particularly good connection point to Asia. In order to improve its international route map, Delta is looking to add international flights from Seattle, while using its codeshare with Alaska to generate domestic “feed” for these flights.

Rapid expansion

Delta’s growth in Seattle has hit a tipping point in the last year. Last October, the company announced a variety of enhancements to its Seattle service, including a new Delta Sky Club, more full flat-bed business class seats, and more capacity to major markets like New York and Tokyo. At that point, Delta already offered nonstop flights to five international markets from Seattle: Amsterdam, Beijing, Osaka, Paris, and Tokyo-Narita. (Direct service to Osaka will end in November, an apparent casualty of the falling yen .)

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