The absolute worst thing that can happen is Delta buying Alaska..... That nice little tidbit in the new AS TA that has zero scope restrictions will make it's way into whatever new agreement they see fit. Kiss domestic mainline flying goodbye as it'll all be done by regionals using ERJ MRJ and C series whatever's.... Delta mainline will only exist to fly international, the rest of carriers will follow suit. Sound absolutely crazy ridiculous... That's why it might could just happen years from now that is.

Well the worst thing that could happen, happens everyday. Making junior pilots suck their tiny pay checks out of a mgmt hose while mainline guys reminisce of when they had to suck from that same hose, but say, oh hey you're not planning on using that ladder are ya!? Yoink let me pull that on up here.
Maybe I'm way off.
Back to thread.

Delta Draws Blood in Seattle as Analyst Cuts Alaska's Rating
BY Ted Reed| 12/09/13 - 06:45 AM EST
Stock quotes in this article: ALK, DAL

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SEATTLE(TheStreet) -- As the David and Goliath battle between Alaska Airlines (ALK_) and Delta (DAL_) for dominance at Seattle Tacoma International Airport continues to ratchet up, Delta seems to have drawn first blood as a leading airline analyst downgraded Alaska because of the conflict.

In a note issued Friday, Deutsche Bank analyst Mike Linenberg downgraded Alaska to sell from hold, noting that Alaska is planning to boost service at Delta's hub in Salt Lake City.

"We view these measures as retaliatory on the part of Alaska in response to Delta's significant growth in its Seattle backyard," Linenberg wrote. "Furthermore, the recent moves by both 'partners' suggest that their long-standing code share and marketing agreements could be unraveling.

"While these actions are negative for both airlines, 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," he said.



Alaska shares closed Friday at $75.85, down $1.10 on an up day for the market. Shares have risen 71% year-to-date. Linenberg said his 12-month price target is $70. His 2014 per share estimate for the carrier is $5.25, well below the consensus estimate of $6.35.

"We are hopeful that both airlines can resolve their various issues so as to maintain their long-standing partnership," Linenberg said. "We are of the view that that would be a far better outcome than what is in store for next year."

Last week included two Seattle-related announcements by Delta. First, the world's second-biggest airline said it will begin non-stop Seattle-Fairbanks service in May and non-stop Vancouver, Canada, service in June. Also, at historic Boeing Field in Seattle, Delta unveiled a Boeing 737-900 that it named "Spirit of Seattle." Alaska responded on Twitter with a photo of one of its aircraft and this text: "The original 'Spirit of Seattle' a nod to the beautiful city we call home."

On Friday, Alaska seemed to tire of turning the other cheek. It announced it would boost Salt Lake flying in June. New destinations from Salt Lake will include Portland, Ore.; Los Angeles; San Diego; and San Jose. Additionally, Alaska will add a third daily Salt Lake-Seattle flight.

"Salt Lake City has long been a top requested market by our customers and we are pleased to add to our successful Seattle-Salt Lake City flights with additional service from four other West Coast gateways," said Joe Sprague, Alaska vice president of marketing, in a prepared statement.

"This new service connects travelers with Alaska's strong network on the West Coast," he said. "In addition, our customers will enjoy double miles that apply toward elite status in our award-winning Mileage Plan program."

Aviation consultant Bob Mann said the "tit for tat" Alaska/Delta battle may signal an end to the trend toward capacity discipline that the airline industry had demonstrated over the past two years. He noted that Delta is also growing in Boston. The carrier said last month it would add five non-stop destinations from Boston next year.

"With Delta growing in Seattle and Boston, and now Alaska's response in Salt Lake, plus the DCA and LGA slot redistribution to growth-happy carriers (and inevitable competitive responses), when is someone going to write that capacity discipline is officially out the window?" Mann asked.

Written by Ted Reed in Charlotte, N.C.

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Delta Draws Blood in Seattle as Analyst Cuts Alaska's Rating - TheStreet

Not really. UAL has moved more into SFO.. DAL has moved out of there. Everybody is picking a dance partner wrt west coast hubs. AMR is the only one of the three that really doesn't have one. THAT is gonna be interesting.

This^^^^^^^^^^^^^^^

lulz at Bob Mann.....

I'm not sure about your 40% figure, and DAL still has a large presence in that market.

As far as "routes" go, NWA used to fly a 330 from MSP nonstop to HNL. The DAL bean counters scrapped that, put the 330 on a LHR route & tripled the yield.

Back in the day, AMR build super hubs in SJC, RDU, STL & BNA......only to dismantle them due to lack of performance. Routes are routes.....profitable routes are the ones that really count.

I'm all in favor of maximizing yield, (i.e. PROFITS), on whatever routes are most profitable. From the latest figures, DAL seems to have a pretty good handle on it.

Timbo,

I don't think your two sentences are exclusive of each other.

RA wants to merge, so he is bringing DAL into SEA in a big way. The AK shareholders will see earnings slip, start selling, the stock price goes down enough, AK either succumbs to the merge or is hostile takeover material. Its a matter of time IMO.

Boston, to me, is just DL getting back where they were before they downsized so heavily there allowing JB to get a foothold in the first place. I also think they want to fill a hole in the network on the West Coast. Why would 717s be a fantasy? Seems like a low risk way of reintroducing the intra West service they after after the Western merger. The competition and end of capacity discipline should be good for employees of all airlines.

No argument there...I would suggest Boston is more in their domestic feed interest than Seattle in terms of total Delta international volume from East Coast outbound.

Again, no argument in filling a hole on the West Coast...just if you are going to fantasize, is the 717 the object of desire? Although Delta already made the lowest risk possible by soliciting SkyWest CRJs and Compass E195s to fly most of these new routes instead of using mainline Delta flight crews.

Completely disagree. In the end, competition usually favors one side, not both. Alaska has held ground when competition has come knocking but I wouldn't say it was good for the employees of the industry. I would say Delta, despite its size would be the same. Capacity discipline has been a cornerstone in successful airline business models to absorb losses in tough economic times. I'm sure these are lessons learned by watching PanAm, Braniff and Eastern go under.

If it is the idea of a hostile takeover by Delta over Alaska, I wonder if it would be akin to AA grabbing TWA and how well that was for the good of the employees?

SkyWest is the biggest winner here...and will continue to be if the large carriers continue to use their resources to wage war. Alaska would not feel the pinch of this surge until 2014Q3 or later since most of this will take effect mid 2014 but SkyWest and their employees will benefit almost immediately. If I were a Delta pilot (or any company's pilot actually), I would be frustrated that management again continues to use guest help to grow the route structure instead of hiring more to grow the company.