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Delta targets Seattle in westerly expansion

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By Dominic Gates
The Seattle Times
Published:
SEATTLE - Delta Air Lines Chief Executive Richard Anderson has ambitious plans to build up Seattle as the airline’s West Coast international gateway and its eighth domestic hub.
Delta will not only offer more flights out of Seattle - many of them in head-to-head competition with Alaska Airlines - but will also base more jobs here and spend heavily on facility improvements at Seattle-Tacoma International Airport.
The chief of the world’s third-largest airline is not shy about pushing assertively into a market where hometown favorite Alaska Air carries more than half of all passengers.
Some analysts see Delta exerting pressure for an end game in which the giant Atlanta-based enterprise swallows its smaller Pacific Northwest rival.
Anderson deflects talk of that possibility and insists Delta is here “to be successful unilaterally” in a rough-and-tumble industry.
“There’s no drama. It’s just business,” Anderson said. “Is Airbus tough with Boeing? Is Apple tough on Microsoft? It’s a competitive marketplace.”
On Monday, Delta, headquartered in Atlanta, Ga., inaugurated direct flights from Seattle to Hong Kong, bringing to 10 the number of its daily international nonstop routes out of the city, six to Asia and four to Europe.
Anderson said that adding such destinations from Seattle is “huge for the economic and cultural development of the community.”
Delta’s expansion requires building up its base at Sea-Tac. Anderson said the airline has about 2,800 employees based here now and will soon grow past 3,000.
“We’re in the process right now of hiring 1,400 flight attendants and 600 pilots,” he said. “A lot of those will end up based here.”
The Port of Seattle plans a new $350 million international-arrivals facility - the first phase is scheduled to open in 2018 - to be paid for by the airlines that use it.
“Given the sheer number of arrivals we’ll have there, the lion’s share of that will be Delta’s,” said Anderson. “We’re fully prepared to meet that obligation. . Seattle is a strategic priority for Delta.”
Delta is the most profitable airline in the world. Excluding special tax gains, it made $2.7 billion last year.
It handles much of its own maintenance in-house and has high operational reliability. The company’s profit-sharing scheme paid out just over $500 million to employees last year and labor relations are better than at most airlines. That helps ensure better service for passengers.
Bob Cortelyou, Delta’s vice president of network planning, said Seattle has the potential to be a big global travel gateway and yet lags behind cities such as nearby Vancouver, British Columbia, in international connections.
Seattle’s relative closeness to Asia, compared to the big California cities, offers Delta flexibility in the aircraft it can fly on trans-Pacific routes.
So Cortelyou’s opening new direct routes with smaller airplanes such as the Boeing 767 or 777, or the Airbus A330, rather than four-engine jumbo jets.
“Seattle has a strong corporate base, a strong economy and a relatively affluent population. It’s also a tremendous geographic location for flights to Asia,” Cortelyou said.
“It befuddles my mind why Vancouver is so much stronger. Seattle has all these great demographics and a smattering of service.
“That’s not right, and we’re fixing that.”
Of course, if Delta was solely creating an international gateway, that would be no threat to Alaska Air.
But it’s also been building a feeder network to bring its passengers from cities all along the West Coast and even Alaska.
This summer, it will grow to 86 departures out of Sea-Tac every day.
Delta’s Seattle routes to Los Angeles; San Francisco; San Jose, Calif.; San Diego; Las Vegas; Vancouver; and Anchorage and Juneau, Alaska, create head-to-head confrontations on Alaska Air’s bread-and-butter destinations.
And last month, Delta announced it will open service this winter to Maui in Hawaii and to Puerto Vallarta and Los Cabos in Mexico.
Those aren’t feeder routes to an Asian gateway. Delta is going after prime winter vacation traffic out of Seattle in direct competition with Alaska.
If that seems aggressive on Delta’s part, Alaska is not sitting back.
This month, Alaska opens seven non-Seattle routes out of Salt Lake City, which is a longstanding Delta hub.
And when Delta opened its direct flights from Seattle to London in March, Alaska announced a special double-miles offer to its frequent fliers who flew on British Airways, the only other carrier going direct to London.
In terms of airline competition, all these seem like moves in an undeclared war.
In that confrontation, Alaska for the moment is in a dominant position. For the year through April, Alaska carried just over half of all passengers out of Sea-Tac. Delta carried just over 13 percent.
Michael E. Levine, a former senior airline executive now on the faculty of New York University School of Law, said that to build a sustainable international hub at any airport requires a strong domestic feeder network.
“You can’t possibly build it at Seattle without Alaska,” said Levine, who worked with Anderson at Northwest Airlines and is a longtime friend of the Delta CEO.

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