Delta/Alaska Friendship Frays as Airlines Bulk Up in West Coast Hubs

SEATTLE ( TheStreet) -- Alaska Air ( ALK) and Delta ( DAL) are partners, but increasingly they are also rivals battling for control of Seattle Tacoma International Airport, one of the two most valuable West Coast hubs.

The bloodiest battleground appears likely to be the Seattle-San Francisco route, where service is slated to expand next year to approximately 28 daily flights each way.

As the growth in Asia travel continues, as the Boeing 787 opens new trans-Pacific routes, and as American ( AAMRQ) prepares to emerge from bankruptcy, the importance of having a West Coast hub only increases. Not to ignore legacy carrier purchases of West Coast airlines in the late 1980s, but that was a domestic battle while the focus now is on serving Asia.

United ( UAL) has San Francisco. American would like to have Los Angeles but dominance there is probably unattainable. Delta has staked out Seattle, where it wants a bigger domestic share. For the 12 months ended in June, Alaska had a 53% share of Seattle's domestic traffic, while Delta was second with about 10%.

Delta said this month it will add six daily Seattle-San Francisco flights starting in March, with a seventh flight to be added in June. It will add two daily Seattle-Las Vegas flights in January, with two more in April, bringing the total to five. It will add two daily Seattle-Los Angeles flights in June, bringing the total to seven. Regional partners will operate most of the new service.

Delta said its primary goal is to better feed its growing international hub in Seattle, but clearly its expansion goes beyond what it takes to feed international flights. From Seattle, Delta currently operates 38 peak-day departures to 16 destinations, including seven international destinations, while Alaska offers about 300 daily departures. Delta's planned new routes target critically important routes for Alaska, which already has 12 daily Seattle-Los Angeles routes, eight daily Seattle-San Francisco routes and nine daily Seattle-Las Vegas routes.

By mid-2014, Delta expects to fly from Seattle to nine international destinations including Amsterdam, London and Paris and six in Asia: Beijing, Hong Kong, Osaka, Shanghai, Seoul and Tokyo. "We'll continue to grow the market into a preferred international gateway," said Delta spokesman Anthony Black.

"Alaska does a great job providing feed for us, (but) we're adding three additional flights from Seattle next year, to London, Seoul and Hong Kong," Black said. "Adding international service is a considerable investment of metal, so our goal is to ensure that we provide the passenger numbers to make them successful."

Alaska spokeswoman Bobbie Egan said: "Las Vegas, Los Angeles and San Francisco are large markets from Seattle and we are grateful to be the dominant carrier in all three of these. We added seats between Seattle and Las Vegas this past spring and we increased seats from Seattle to Los Angeles and San Francisco over the summer.

"We added seats in part to accommodate an increase in demand as we connect passengers into Delta's growing international flights out of Seattle," Egan said. "As Seattle's hometown airline, we'll continue to meet demand in these core West Coast markets." Hometown airline? Delta recently picked up sponsorships of the Seattle Seahawks football team and the Seattle Sounders soccer team.

Currently, Alaska and Delta have a partnership that includes code-sharing on select flights, frequent flier reciprocity and reciprocal elite benefits including two free checking bags. But the carriers plan to end another aspect of their relationship: Last week, Delta Ground Services said it will discontinue agreements to provide ground service for Alaska at 13 stations, six cargo offices and various de-icing locations, a move first reported by AirlineReporter.com.

"Delta notified us last Friday that it has elected to discontinue these service agreements with Alaska Airlines effective March 31, 2014," Egan said. "We have been considering a change ... for some time now. (This) simply speeds up the transition we'd been planning."

Delta is not the only airline moving to strengthen its West Coast hubs. Last week, United said that on April 1 it will add an 11th daily flight between San Francisco and Seattle, while also adding two daily flights to Atlanta. Additionally, United will add two daily Los Angeles-Minneapolis flights.

The new San Francisco-Seattle service will boost pressure on the two smaller carriers, Alaska and Virgin America, which rely more heavily on revenue from the route than Delta and United do. United will convert its existing service on the route to mainline aircraft, increasing its capacity by more than 50%.

A funny thing is that the Justice Department, in suing to stop the planned merger between American and US Airways ( LCC), contends that the airline industry is becoming less competitive.

Really? Is that what is happening in San Francisco-Seattle?

-- Written by Ted Reed in Charlotte, N.C.

>To contact the writer of this article, click here: Ted Reed

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