Originally Posted by
Moose
Probably not. The expansion is largely 76 seaters (Skywest). The problem is costs. Delta costs more to operate and yields in west coast markets are extremely low. That is probably why they are trying Alaska....ANC, JNU and FAI routes. Yields are higher. JetBlue, Southwest, Allegiant, Virgin and Alaska are in a bloodbath up and down the west coast and their costs are way lower than Delta. Good managers do not choose routes to lose money regardless of the annual profit. I think it is cheaper for Delta to codeshare the west coast flying vs flying it themselves. Notice American and United do not run a lot of north south flying on the west coast either. The problem for Delta is the Seattle international expansion means more feed would be needed than available. They tried to get Alaska to be exclusive to them on feed but it did not work out. So, now Delta has to figure out how to fill this seat void and not lose too much money in the process.
As for merging. In my opinion, it's not going to happen. What does buying Alaska bring to the table? It eliminates your low-cost feed. Both companies make money off the code-share. Alaska brings lots of passengers to Delta's international flights at a price Delta cannot match. Purchasing Alaska just buys a bunch of 737s at a high cost. The problem of competing against SWA, JBLU and VA costs would still exists and the cheap feed is gone. I know it sucks for pilots but companies that lose money suck even more for pilots.
I don't have all the numbers but our costs are not that much higher than SWA. We compete fine with SWA and JetBlue anywhere else in the country and don't think we will have a problem doing it out West. The easiest way for RA to get the feed he wanted to build the Seattle Gateway was to merge with Alaska. They didn't want to play so he goes to plan B. The thing Delta has going for us is we don't have to make money on the domestic flights into SEA. We just want the feed to throw them on flights to Asia. Alaska has to make money on their flights into SEA. Pull the Delta codeshare passengers off the Alaska flights, add the competition with Delta, and Alaska loses this battle.