Delta's Growth in Seattle Didn’t Hurt Alaska Airlines After All

NEW YORK (TheStreet) -- It turns out that Seattle-Tacoma International Airport is in fact big enough for two airline hubs.

When Delta (DAL) launched its effort to build a Seattle hub in 2013, many including me thought hometown carrier Alaska Airlines (ALK) was in trouble. Intense competitive pressure from the best U.S. airline, engaged in trying to build a West Coast hub right on top of Alaska's principal hub, didn't seem to present a path to a highly successful outcome.

Rather, I guess I thought that Alaska would become the sort of airline that struggles along for years, as many predecessors have done, always the topic of merger talks, and at times -- when industry conditions turned bad -- the subject of stories such as "Can Alaska Air Survive With Oil at $200 a Barrel?" and "Will Alaska Turn to American (AAL) to Prevent Delta Takeover?"

Not to say those stories will never be written, but they seem far less likely than they once did.

In December 2013, at a time when Alaska was retaliating against Delta by announcing suspect buildups on competitive routes including some in Salt Lake City, Deutsche Bank analyst Mike Linenberg downgraded Alaska to sell from hold.

"The fact that Delta is roughly eight times the size of Alaska (i.e. $38 billion of revenue estimated for 2013 vs. Alaska's $5 billion) leads us to believe that Alaska will be disproportionately impacted," Linenberg wrote.

Yet Alaska has not only survived but prospered, reflecting the surge in overall industry performance, steadfast resistance to Delta, and now an apparent slowdown in Delta growth at SeaTac.

Alaska shares closed Monday up $1.57 to $66.22. Year to date, shares are up 11%. Adjusted for a stock split and dividends, Alaska shares closed Dec. 31, 2012, at $21.06 a share. They have more than tripled since then.

Delta has not done badly either. Its shares closed Monday up 94 cents to $42.97. Shares are down 13% this year, reflecting the various pressures on international carriers. Adjusted for dividends, Delta shares closed Dec. 31, 2012, at $11.67. They have more than tripled since then.

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