Count me among the many people who are utterly confounded by the $2.6 billion Alaska-Virgin America merger (or as I’ll call the silly airline from here on out, Allergen America). I don’t need to rehash the numerous reasons why this is a strange choice for Alaska and an odd fit overall, but given that Alaska is touting this as a step toward becoming a West Coast powerhouse, it’s worth looking at what this new route map will look like from the other side of the country.
Of course, Virgin America serves the gamut of East Coast cities from its San Francisco hub, so Alaska will gain those routes and its presence in those cities will remain limited to its role as a carrier to and from SFO (and, to a lesser extent, LAX). What’s interesting to me is to see how suddenly the landscape changes in the New York area and in Washington, D.C., assuming no divestment or swap of existing routes.
NYC: Two airports, eighteen nonstops a day
In New York, Alaska will have a fairly notable presence:
- 5 nonstops daily from JFK to San Francisco
- 6 nonstops daily from JFK to Los Angeles
- 3 nonstops daily from Newark to San Francisco
- 3 nonstops daily from Newark to Los Angeles
- 1 nonstop daily from JFK to Seattle
Alaska will be the only major airline to offer transcontinental service to both Newark and JFK. Combined, Alaska will have 8 nonstops a day to SFO and 9 a day to LAX. In comparison, Alaska’s partner American offers 5x daily service between SFO to JFK, and 12x daily service between LAX to JFK, while Alaska’s (estranged?) partner Delta offers 7x daily service between SFO and JFK and 9x daily service between LAX and JFK.
In other words, as Alaska has seen its alliance with Delta become less than cordial, and its alliance with American is starting to show some wear and tear, Alaska apparently has decided to fight back and hard. There is no doubt that Alaska is trying to compete directly with its two biggest “partners.” Of course, Alaska will have to up its onboard hard product and notoriously dismal wifi, to truly compete, but there is no uncertainty that Alaska intends to be taken seriously. (On the other hand, their in-flight catering, at least, stands out.)
Strangely, though, Alaska will still only have one (poorly-timed) flight a day between New York and Seattle, and none to Portland. This merger doesn’t change that. So much for being the Pacific Northwest’s “hometown airline.”
Unless, that is, Alaska wants the 18 nonstops out of New York, but not (all) to California. It apparently took some wrangling and some time just for Alaska to secure the once-daily nonstop between Seattle and JFK, and even then the flight is a redeye. In theory, could Alaska pare down its California-New York routes and operate something like:
- 5x daily service JFK-Seattle
- 2x daily service Newark-Seattle
- 3x daily service JFK-Portland
- 1x daily service Newark-Portland
- 2x daily service JFK-SFO
- 1x daily service Newark-SFO
- 2x daily service JFK-LAX
- 2x daily service Newark-LAX
Again, that’s purely hypothetical and speculative, but it would sure make a lot more sense for Alaska. Currently Delta has the monopoly on JFK-SEA and JFK-PDX routes, so this would allow Alaska to compete with Delta directly on its home turf, a war it can win — while ceding frequent JFK-LAX/SFO nonstops to American, Delta, and JetBlue, where it can’t quite compete on product.
WAS: Three airports, twelve nonstops a day
What’s more interesting to me is what will happen in Washington, D.C. Alaska actually has a fairly unique presence at Washington National Airport already, where it currently has 8 slot exemptions beyond the statutory 1,250 mile “perimeter,” which is already an enormous amount. When the merger is complete, Alaska will have, from National Airport:
- 2x service to Seattle
- 1x service to Portland
- 1x service to San Francisco
- 1x service to Los Angeles
That will make Alaska the carrier with the most long-distance destinations from Washington National, essentially doubling down to create a major presence there by adding San Francisco to the mix.
And at the same time, out of Dulles, Alaska will fly to:
- Seattle (1x daily)
- San Francisco (3x daily)
- Los Angeles (2x daily)
Let’s not forget that Alaska also operates (strangely, to me) a once-a-day nonstop between Los Angeles and Baltimore-Washington International Airport.
Does it make sense for Alaska Airlines to operate nonstop flights from Los Angeles to all three of Washington, D.C.’s airports? It seems like a waste of resources to me.
Alaska would be spreading itself thinly between Washington’s three airports, and I can’t imagine that — with DCA slots being highly regulated and at such a premium — the FAA is going to love the idea of Alaska getting two more slots (that is, to/from SFO) at National.
In fact, I would assume Alaska would be forced to divest itself of at least one of those D.C. routes in order for a merger to be approved, which almost defeats the idea of the merger to begin with.
When the merger is complete Alaska will have 18 nonstops a day out of New York (serving three destinations) and 12 nonstops a day out of Washington, D.C. (serving four destinations). For an airline that wants to beef up its West Coast presence, it may have just accidentally beefed up its East Coast presence, too… in a way it might not be prepared to handle.
Alaska’s identity is so integrally tied in to a geographic region — Alaska the state, obviously, and the Pacific Northwest generally. By trying to “claim” California, Alaska has gained 17 nonstops a day from the New York area (where it previously had just one, to Seattle) and has delivered a major signal to its partners Delta and American that Alaska is ready to rumble. Alaska already had a big presence in D.C. anyway, and now gains 5 more nonstops out of Dulles and 1 more nonstop out of National.
Count me as a skeptic. I think Alaska is a quirky and friendly (though not comfortable) airline and it’s fine for a short hop up and down the West Coast. To be honest, I don’t think Alaska has the chops to compete in the transcon business — and buying Virgin won’t change that.
That’s why I think Alaska may not be in this for the transcon routes to California, but rather to use the JFK and EWR slots to muscle Delta out of the way and establish a true dominance in the Pacific Northwest to NYC market.