What will happen with Delta/Alaska partnership? Get out your popcorn!

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view from skyclub SEA Delta Points mileage run to hawaii (7)

I grew up with a step brother and a ½ sister so I kinda get the whole not quite 100% family thing. Oh sure, I love my brother and sister but at the same time one of their parents are no relation to me at all. I mean my step mom was related for a while but she was my dad’s wife, not my mom.

Enter Alaska Airlines and Delta. They are not like Virgin and Delta where it is sorta a ½ sibling thing, no it is more like a step brother to me. They say all the right things, we love you Alaska MVPs etc.., but they are not really family. You know how I can tell?

When my step brother got something better than me I had to try to one up him. I was supposed to be happy for him, but really I was just jealous. Deep down my dad took my side and my step mom took my bother’s side. Delta & Alaska – same thing. Look at the routes they all want and the elites they want. They both add here and the other wants the same thing and BIGGER. One will offer 2x elite points and miles and then the other follows and does the same thing or more. Neither is working on a united front. What are the parents to do?

I think you must be sick of my family comparison so let’s see what I think is going to happen next. I could get lots of numbers and statistics and do an analytical comparison of why one choice or the other is the best but in the long run, even with these, it would all just be a guess and the final result could be the opposite of what the numbers show is the best action. So this is just what I think.

Delta wants to either beat up and buy Alaska at a good price or, if push comes to shove, just be the 500 pound gorilla and compete till they say uncle. Can Alaska run to the open arms of another major? I just cannot see the government allowing someone like AA to snatch them up in the middle of finishing the US Air merger. What I think would be great, not that it will happen, is for Southwest to merge with them. Alaska has a bunch of 737’s they love and the two both make money and would be a real size competitor to the 3 big boys (I have not compared routes etc. this is just what I would like to see).

Would it be good for Delta to buy Alaska? They know how to make money (right now) and Alaska is profitable too! It is clearly an area of the world that Delta wants to expand and it would make them even bigger in relation to the other 2 majors. Would it be good for shareholders in either company? That I think is the big question that will be the determining factor as every choice Delta makes is directly tied to what it will do to DAL share price.

Would it be good for Delta flyers? Medallions yes as the upgrades and routes will be more homogeneous and not dependent on the partnership rules. For Alaska flyers, not so much, as you would have to learn the ways of Skymiles and use our broken award site compared to the working one you have now. Also keep in mind what this would do for AMEX. Right now, BofA is it for Alaska. We all know as a Delta regular or even semi-regular flyer you just must have some kind of Delta AMEX card for the perks etc.. All these new AMEX customers would be a big motivation to have a financial backer behind any move to buy them out!

What do you think? Do you think things are going to get better in “the family” or is divorce on the horizon? Do you agree with anything I have said or none of it? Do you have your own ideas what is next? Wait, let me get my popcorn and let’s get started! – René
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10 comments

  1. from a stock value standpoint, Delta & Alaska are great performers now, what would DOJ protest like they did AA/US? DL has well integrated NW, so they have the experience of putting it together. SEA as a combined hub would be a new level of service for Pacific NW, to some degree ultimately at the expense of probably DTW (Asia) & SLC (mountain West).

  2. I have gotten to fly Alaska a couple of times and really like them and the code share with Delta. I wish they would kiss and make up and Alaska remain a separate carrier.

    I like Alaska’s move of coming to Detroit. But switching terminals would be a pain.

  3. Delta buying Alaska would be CFIT (Controlled Flight into Terrain)! As you note, AS is very profitable and for Delta to come up with the cash to make a hostile bid would likely cripple them and drive them to max profit at eh expense of the flyer even more than they do now.

    AS has a very successful model and would fight tooth and nail against ANY acquisition. They are not Glenn Tilton looking for a retirement plan!

  4. I really hope Alaska can stay independent. They kinda remind me of BMW, by focusing on quality and customer engagement, they have both managed to stay profitable in an industry overrun with much bigger players.

  5. A merger would probably be a train wreck, but the fantasy of the combo switching to the AS award engine makes me smile!

  6. No matter who acquired Alaska Air, further consolidation among domestic carriers would be detrimental to the interests of us flyers and ultimately lead to higher ticket prices, more restrictive FF programs, fewer, flights and seats, etc. Airline execs would get higher salaries and bonuses though.

  7. I think we will see another major appear in the next few years. There is a high barrier of entry into becoming an airline, but once you are established a smaller well run airline can run more efficient. I have never flown SW or Frontier or Alaska. I try to stay on Delta metal if I can. I think US Air lacks in clean new planes and that their Award Ticket program is the worst (fees and stops and flight times).

    I love Delta but there needs to be some competition to make them want to be better. An Alaska Air and Hawaiian Air merger could stir the pot on the West Coast.

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