MIAMI — Delta celebrated yet another inaugural from Seattle on Monday, this time to Hong Kong, as it also formally welcomed the city to its hub network.
“With the addition of Hong Kong […] Seattle is now Delta’s newest hub,” said Mike Medeiros, Vice President of Seattle for the airline, during a short speech at SeaTac Airport’s gate S7.
Not that this was any surprise. Delta has been bulking up its assets in Seattle for the better part of two years. Millions of dollars in capital improvements, ranging from a swank Sky Priority check-in zone to a new Sky Club have been popping up since late 2012. Service to cities around the world have been announced, from Salt Lake City to Shanghai. In total, the airline has committed to 95 daily departures by the end of 2014, up from 34 in late 2013.
Hong Kong is merely the latest. The Chinese hub is the ninth international destination in the carrier’s burgeoning Emerald City crown, and the last in its most recent expansion drive abroad. In the past year Delta has added service to London, Seoul, Shanghai, and Tokyo-Haneda. The four come in addition to previously existing service to Amsterdam, Beijing, Paris, and Tokyo-Narita. In total, the expansion has resulted in the carrier injecting well over 2,500 international seats per day into the city.
Obviously, those thousands of seats need to be filled in order for Delta’s venture to be successful. Of the 60-some new flights set to begin by the end of the year, only five are international. That places the vast majority of Delta’s expansion in the city within the realm of domestic routes, built, in large part, to shuttle folks abroad via Seattle.
Indeed, from Bozeman, Montana to Salt Lake City; Las Vegas to Los Angeles, the carrier has been adding domestic service at an aggressive clip. Of the additions, perhaps none have received more attention than the carrier’s expansion from Seattle into Anchorage, Portland, and Spokane. All three are considered the big trunk routes of SeaTac’s hometown heavyweight, Alaska Airlines.
The move into these markets has underscored what many have dubbed the Battle for Seattle, a phrase that the folks at Delta don’t particularly enjoy hearing. “I don’t think there’s any sort of battle. I think that’s a lot of drama, and something being made out of nothing.” say Medeiros.
It’s hard not to see it that way, however, as the two appear to have gone tit for tat, blow for blow repeatedly over the past few months. In late 2014, Delta announced it would enter Alaska’s Portland hub, and Alaska countered by creating a focus city in Delta’s Salt Lake hub. Delta offered double miles on its new flights to London, and Alaska offered double-miles for folks flying to London via British Airways – Delta’s only competitor in Seattle to Heathrow. The region has been bathed in ads, first primarily from Delta, now from both, vying for the eyes, ears, and wallets of Puget Sound and beyond.
Industry analyst Henry Hartveldt of Atmosphere Research Group agrees that the SeaTac landscape is hardly all sunshine and rainbows. “Let’s put it this way: They’re not playing paddy-cake. Whether you want to call it a battle or a duel, they’re certainly tussling with Alaska for the Seattle market.”
The oft-public non-fight fight would certainly lead to the belief that their relationship (codeshares, etc) would be strained, but Medeiros plays down any stress. “For the forseeable future, [the agreement] remains intact. It’s business as usual.” Except for the new hub, anyways, he adds. And even that minor detail appears to boil down to simple business if you ask Medeiros: “Let’s face it, we’ve got a significant increase in international flights, and we’ve got to do everything we can to be successful in Seattle.”
Typically an old-fashioned turf war has been a boon for local customers as competitors slashed fares in a show of sometimes obscene fiscal bloodletting. This time around, it’s a mixed bag according to local officials. “If you look at the fares that are in place for the cities in which there is direct competition between Delta and Alaska, I don’t think you’re seeing a significant drop in those fares,” says Mark Reis, managing director of SeaTac Airport. “[Instead], as a customer or potential customer, you’re being offered double or triple miles, being offered free Wi-Fi, cars, all sorts of amenities, so I think the airlines are being smart about how to attract customers…[by] not necessarily doing it in a way that is dysfunctional or will hurt them financially,” he says.
Turf wars aside, Delta says its ticket sales to its new destinations are going well. “The market is responding well to our entry into Seattle,” says Medeiros, “It will take time to grow our market share; we are very pleased with the overall bookings we’ve seen.”
If the bookings really are rolling in nicely (and even if they aren’t), the big question is how the landscape will shape up for 2015 as new turns to normal. For now, Delta says it’s ready to settle down and see how it goes, at least internationally. “What we really want to do now is focus on these ten international destinations that we’ve got,” says Medeiros.
In the meantime, the airline will continue searching for opportunities to “work on the domestic feed.” As to where that might take them Medeiros says Delta will “only add capacity where it makes sense,” without adding any details.
Hartveldt believes the carrier will remain invested well into the future. “Delta has gone into Seattle in a very comprehensive manner. It is in a position to do strategic investment in its network.” In short, don’t expect it to change anything anytime soon.