Exclusive: How American Airlines Is Looking At The Alaska Airlines Partnership
April 8, 2021
- Jay Singh, Simple Flying
The biggest news from the end of March was that Alaska Airlines was officially a member of the oneworld alliance. Even before Alaska became an alliance member, the airline announced it would be partnering closely with American Airlines on a West Coast Alliance. To learn a little more about how that alliance developed through the crisis and the future, Simple Flying got a chance to speak with Jason Reisinger, the Managing Director of Global Network Planning at American Airlines.
This is the third installment in a series looking at American’s network planning and positions through an interview with Mr. Reisinger:
1. Exclusive: How American Airlines Managed Its Network In 2020
2. Exclusive: American Airlines’ New York Position Will Not Hurt Philadelphia
American Airlines on Seattle
After American and Alaska announced a West Coast Alliance in early 2020, American announced plans to launch flights to Bangalore and London-Heathrow from Seattle-Tacoma International Airport (SEA). Since then, American has expanded its international portfolio by moving a China flight over to Seattle, so the airline will also be flying nonstop between Shanghai and Seattle.
When asked about how Seattle fits into the network, Mr. Reisinger stated the following:
“On the West Coast, if you go look at the map, the whole point of the Alaska partnership is that there was a big wide open spot in the northwest part of the country, and we just don’t have any hubs up there. So, it’s really hard to serve; it’s very circuitous to connect those people to the rest of the US. So, this was a way to work with someone who was in that part of the country, but had the same challenge in the rest of the country. Together, hopefully, end up being a better competitor versus people who have hubs in that part of the world.”
American’s presence in the western US has mostly been focused around Los Angeles and Phoenix. Both of these hubs, not too far away from each other, are a little too south to facilitate connections in the northern US.
For example, a passenger from a city like Portland or Sacramento that wants to go to Spokane or Anchorage or Jackson Hole would need to head in the opposite direction first, to either Los Angeles or Phoenix, before getting on a flight up to Montana, Washington, or Alaska.
Those passengers flying either American or Alaska are likely already choosing to fly with Alaska. American gets the additional passengers when considering international flying. For example, passengers from the same cities (Portland or Sacramento) who need to go to Shanghai can fly Alaska Airlines up to Seattle and then American Airlines nonstop to Shanghai, a more straightforward and less circuitous routing.
Alaska’s oneworld position and in the American partnership
American Airlines and Alaska Airlines are still working out the details of its partnership. Mr. Reisinger indicated he believed there were plenty of operations for both American and Alaska out of Seattle:
“I think this is a partnership that some of which is still to be determined, but I think there’s a lot of opportunity there. Seattle has got a lot of technology, business, a lot of traffic to the Pacific. We’ll just have to take it and see how see how it goes.”
Alaska Airlines is focused on its narrowbody future and connecting the West Coast of the United States and Alaska to the rest of the world. When Alaska Airlines joined the oneworld alliance, American’s President, Robert Isom, stated the following in a pre-recorded message:
“We recently announced a new integrated frequent flyer offering, and have signed new corporate contracts. So, the partnership is already creating value for customers, and we are excited to do even more now that Alaska is officially part of oneworld.”
Seattle is home to many major companies. This includes Amazon, Starbucks, Microsoft, Costco, and more. Many of these companies can now look at the American and Alaska partnership and sign global corporate contracts, which is a huge deal to airlines and funnels additional passengers to both airlines.
The transpacific market
In the last ten years, the transpacific market between the US and Asia became even more important as business and tourism ties between the US and several countries have deepened. As a result, airlines have quickly moved to develop transpacific hubs. United Airlines emerged as a clear winner with a massive transpacific hub at San Francisco International Airport (SFO).
Not wishing to be left out, Delta focused its attention on Seattle and started to build up a transpacific hub there, which led the airline to compete with Alaska on domestic routes. This left American without a true, large transpacific hub. While the carrier does have some routes out of Los Angeles across the Pacific, the market is already very competitive.
Seattle is a much better option for American Airlines. Alaska Airlines already has a strong domestic network out of Seattle, which American can leverage in the partnership to run its international long-haul flights. Plus, Alaska Airlines gets a new opportunity to turn up the heat in Seattle by reaffirming its market position with new international partnerships.
While so much of the partnership is left to be determined, American’s team is pretty confident that, in the long run, the American-Alaska partnership will open up a host of new opportunities. As the partnership advances, travel restrictions come down, and demand returns for international long-haul flights from both leisure and high-paying corporate customers, there could be plenty more to come from both airlines and other oneworld members.