Delta plans to triple gates at SEA, article

General Lee

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Delta Seeks to Boost Asia Hub With Plan to Triple Seattle Gates


By Michael Sasso Nov 14, 2014 7:19 PM ET. Bloomberg


Delta Air Lines Inc. (DAL) wants to almost triple its gates at the Seattle airport, challenging market leader Alaska Air Group Inc. (ALK), as the carrier expands its newest West Coast hub and jumping-off point to Asia.

"We're making good progress on our discussion to upgrade the facility and to turn Seattle into a huge international gateway for Delta," Chief Executive Officer Richard Anderson said on a recorded message to employees.

Delta, the world's third-largest airline, is seeking 30 gates at Seattle-Tacoma International Airport in the long term, Anderson said on the Nov. 13 call. The airline currently has 11 gates, according to the airport, the largest base for Seattle-based Alaska.

Delta has been pushing into Alaska's home turf for more than a year as the two fight for market share at an airport where the smaller airline now controls about 40 percent of the traffic. Atlanta-based Delta has designated Seattle as a hub from which to offer an increasing number of trans-Pacific flights.

Anderson's message suggests Delta is pushing beyond a previously stated goal. In September, Seattle airport spokesman Perry Cooper said Delta wanted about 150 flights a day at the airport by 2017. That would require 19 or 20 gates, assuming eight flights a day from each one, Cooper said.

Delta Capacity

Delta could potentially operate 240 flights a day with 30 Seattle gates, Cooper said. Sea-Tac, as the airport is commonly known, determines how many gates to grant airlines each year according to formula using their number of outbound seats as of August, Cooper said.

"That's one of the estimated opportunities there," Cooper said by telephone. "But does that mean that somebody would use that many?"

Delta didn't return a call yesterday seeking comment about Anderson's remarks on the employee call.

At 30 gates, Delta's Seattle operation would still be smaller than United Airlines' hub in San Francisco, which often is seen as the dominant hub to Asia because of that market's large Asian population. United operates from 32 domestic gates at San Francisco International Airport and shares 12 international gates with partner airlines in the Star Alliance, said Megan McCarthy, a United spokeswoman.

Delta's biggest West Coast base is now Los Angeles, where the airline handled about 6.89 million passengers in the year ended in July, according to the U.S. Bureau of Transportation Statistics. The airline's Seattle total was 3.37 million people.

Delta has been boosting domestic flights to and from Seattle to build connecting traffic, which then could fly to Asia. President Ed Bastian told analysts in a third-quarter earnings call last month that Delta?s decision to cut seats from Cincinnati and Memphis, Tennessee, while expanding in Seattle is producing solid results.

"Seattle's domestic performance has significantly exceeded our expectations as unit revenues increased 6 percent on a 25 percent increase in capacity," Bastian said.



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humveedriver

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The phrase "wish in one hand and spit in another" comes to mind. What's the history with Delta and SEA? I assume it was a small operation until the bought NWA. How big was NWA's operation in SEA and did Delta maintain it, or downsize it and now they are trying to get back what they gave up?
 

General Lee

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The phrase "wish in one hand and spit in another" comes to mind. What's the history with Delta and SEA? I assume it was a small operation until the bought NWA. How big was NWA's operation in SEA and did Delta maintain it, or downsize it and now they are trying to get back what they gave up?

The deal is DL is swapping the Narita hub for SEA. Planes now can overfly Japan and make it nonstop to Asia from SEA. NWA's operation in NRT was huge at one point, with 747-200s everywhere. But the Japanese Govt has allowed JAL and ANA to operate more INTL flights from the once domestic only downtown airport, Haneda. Slots have been awarded to some US airlines at Haneda, but at very unpopular times, like arrivals and departures from 11pm to 6am. NWA actually helped build JAL at the request of the Japanese Govt after WWII, but was asked to move to Narita from Haneda in 1976. The new entrants into Narita these days are LCCs, and that has decreased the value of the current Narita slots.

Sooooo, DL can do the same thing in SEA as Narita, and they need the feed, hence the need for more gates. With $4 billion in profits this year and more next year due to low oil costs, I think the build up of SEA won't be a problem.




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waveflyer

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Is that why you're getting Surface's?
 

General Lee

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Where are these gates comming from .. Are more going to be built? Cause I think SEA is kinda at saturation..
 

humveedriver

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Where are these gates comming from .. Are more going to be built? Cause I think SEA is kinda at saturation..

I think this could be a lot more interesting than the Love Field/Hobby expansion that SWA did. SEA is the mothership for ALK. But they can't offer what DAL is offering in terms of gateway to the orient. The problem for ALK I think is DAL is offering something that the city/airport wants. Should be interesting to see how it plays out.
 

JetMonkey

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All DAL has to do is buy Alaska and "poof", feed and gate space problem solved..
 

General Lee

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Where are these gates comming from .. Are more going to be built? Cause I think SEA is kinda at saturation..

Looking at the terminal map, it looks like A1 through A14, the whole South Satelite S1-S16, and B3, B5, B7, and B9? That might be a start.


If you have 10 Widebody nonstops per day with about 2500 seats total (250 per plane), then you need a lot of feed to fill those seats, along with local traffic. Throw in double HNL and now Maui, plus ANC service, and that means lots of connections.




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General Lee

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All DAL has to do is buy Alaska and "poof", feed and gate space problem solved..

I doubt it. Once you cover the same routes, it's tougher to merge, primarily because the Govt wants competition on city pairs. I'm sure SWA or Spirit would want that, so they could benefit on scraps that would have to be given up to get regulatilory approval. But, AA or UA might be interested, or even the Corndogs, and since there is less overlap, it probably has a better chance.


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Looking at the terminal map, it looks like A1 through A14, the whole South Satelite S1-S16, and B3, B5, B7, and B9? That might be a start.


If you have 10 Widebody nonstops per day with about 2500 seats total (250 per plane), then you need a lot of feed to fill those seats, along with local traffic. Throw in double HNL and now Maui, plus ANC service, and that means lots of connections.




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So... where are all the current airlines that use those gates gonnna go ?
 

General Lee

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So... where are all the current airlines that use those gates gonnna go ?

Good question, but some very smart people in ATL are working on that. I would think some of the INTL flights from other airlines (like Emirates, Korean, Ice Air) would still use the S gates for the customs there. But, it seems the SEA airport authority is not fighting this DL growth plan.



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Mea25000

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No new gates in SEA until '20. New AS #s as of last Thursday growing SEA by 20% in 2015. I hope this thing keeps going this is great news..lots of growth. If you can believe our management they say Delta's push in SEA is the best thing that could have happened. It has flushed out Super low cost airlines and according to them Delta adds capacity at reasonable fares which allows us to grow and thrive. Last numbers they were pushing was an almost 15% cost savings over Delta... Even more if all the metal is RJ's which is about 90% of it so far.
AS Q3 profit margin 21.8%
Delta Q3 profit margin 14.6%
 
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jonjuan

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Looks like 20 gates for delta by 2017 which is a 90% increase over the current 11 gates. That's pretty significant growth in 2 1/2 years.
 

Turtle21

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Delta pays its employees too much and has profit sharing. They will collapse under the huge cost disadvantage. SEA gates will be available for dirt cheap in no time.
 

SpauldingSmails

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SEA isn't about the domestic market for DAL.
 

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