Could someone please tell me how an Alaska Airlines flight between Salt Lake City and San Jose, Ca. is going to make money? Because I can’t see it. In fact, if you believe in that flight, don’t read this column, where the assumption is that the flight is ridiculous.
Forbes contributor Ted Reed outlines why he thinks Alaska needs to make nice with Delta in order to avoid an “unwinnable battle” and to benefit from the future revenue that Delta’s international flying while bring to its Seattle partners.
Here’s a snippet of the article, check out the full text here. What are your thoughts?
Of course Alaska wants to fight back against Delta, the arrogant intruder from the South. And who can resist backing the relatively small airline with deep community ties that it built up over 66 years? The problem is that the battle has pushed Alaska to act like an angry kid, telling Delta that if it doesn’t stop, Alaska will hold its breath until it turns blue. The fact is that Delta has no choice but to build a Seattle hub. Delta is one of three global U.S. carriers and it needs to offer Asia service – particularly China service — from a West Coast hub, where it can gather passengers from the states to the east, all 45 of them. The best U.S. West Coast hub is San Francisco, where United is long established. For years, that has left Delta and American, as well as United, fighting it out at LAX, a place where nobody can win.
It is easy to forget that Alaska and Delta are partners in a code share agreements. I don’t know all the details of why they enabled their relationship to break down. My sources say that the accountants who run Alaska understandably insisted on squeezing every last penny out of the relationship, rather than backing down a little bit on price and rather than giving Delta passengers preference over passengers from other partners.
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