Delta’s new CEO Ed Bastian had some interesting comments on the planned Alaska-Virgin America merger. When asked by the Puget Sound Business Journal about the impact on Delta he shrugged and said all the routes already existed before the acquisition.
“It doesn’t have any impact on Delta at all. They’ll have their work cut out for them no question. We’ll see how they do. Mergers in this industry have historically been challenging. We wish them well. We’ll see how they perform.
On the cantankerous Delta/Alaska relationship, the CEO said no one was surprised by how well Alaska has competed and he feels it’s made them stronger. Although they may fly several of the same routes from Seattle, Bastian feels they are catering to completely different segments:
“(Alaska) provides a different product with one aircraft type. They’re focused on a lower-fare segment than we are,” he said. “We have a higher cost, but we also have higher revenue on board our planes. It’s just a different product category that we compete in.”
…and what about the code-share agreement?
“Our contract has a couple of years to run,” Bastian said, referring to the agreements with Alaska. “When we get to the end of the process, we’ll have an opportunity to re-evaluate.”