A battle for Sea-Tac between two airlines is fueling huge growth

SEATAC — The first thing a traveler driving to Seattle-Tacoma International Airport sees, even before the main terminal itself, is a fleet of Boeing 737 aircraft, decked out in the blue-and-white trim of Alaska Airlines, huddled around the airport’s north satellite terminal. The second thing he sees is a massive traffic jam of cars, inching along toward the arrivals level. Locals know to pick up arriving passengers on the speedier departure level.

The explosive growth causing the traffic jams at Sea-Tac, the country’s 15th-largest airport, is being fueled by a battle for supremacy between two airlines, one that calls Seattle home and the other that sees the Pacific Northwest as the gateway to lucrative Asian and European markets.

On one side is Alaska, headquartered in the Seattle area since the 1940s. On the other, Delta, the Atlanta-based legacy carrier with plans to expand. Pitting an airline as big as Delta, which flew more than 170 million passengers last year, against Alaska, which carried only 29 million, may seem like a David and Goliath pairing. But Alaska currently dominates the Seattle market, accounting for about 51 percent of flights into and out of the city.

In the past two years, Delta has more than tripled the number of flights it operates to Seattle, though it still accounts for only about 14 percent of flights into and out of Sea-Tac.

The two airlines have operated as partners for decades, but now the partnership has hit the skids. After the 2008 merger between Delta, which mainly operated overseas flights to Europe and Latin America, and Northwest, which had a major Asian presence, Delta sought a more exclusive partnership agreement with Alaska, one that would feed Alaska’s domestic passengers into Delta’s international flights.

But to Alaska, that exclusive arrangement would deprive them of partnerships with other international airlines that operate through Seattle, such as British Airways and Korean Air — airlines that operate routes on which Delta wants to expand.

“To be able to offer the utility of global destinations within our frequent flier program … there aren’t other small airlines like ourselves that are able to do that,” Joe Sprague, Alaska’s senior vice president of external relations, said in an interview at the company’s headquarters.

International airline rules made Delta wary of adding additional flights that originate in Asian countries. Those countries give their home carriers preferred take-off and landing slots, leaving U.S. carriers to fight over unappealing slots in the middle of the night, which don’t work for connections.

Instead, Delta says Seattle represents a key gateway for new flights originating from the United States. Other major West Coast international airports, in Los Angeles and San Francisco, already have crowded take-off and landing schedules. Sea-Tac, which opened a third runway in 2008, has the ability to handle additional traffic.

“Over the past year, we’ve focused on building our Seattle hub by adding new service and investing in our products and facilities to provide a strong, differentiated option to key destinations for both our business and leisure customers,” Mike Medeiros, Delta’s top executive in Seattle, said in February, when the carrier announced three new flights to Hawaii, California and Arizona.

The two companies have reduced the number of flights in their code-sharing agreements; any routes that both Alaska and Delta fly are no longer part of that agreement.

Both airlines have added new cities out of Seattle — Alaska began flying to Philadelphia, Baltimore and three other cities in 2014. This year, it will add new service to Oklahoma City, Milwaukee and Washington’s Dulles International Airport. In 2014, Delta started international service to Hong Kong, Seoul and London’s Heathrow airport.

But the fight has been good for Sea-Tac itself, and for consumers. Perry Cooper, a spokesman for the Port of Seattle, which operates Sea-Tac, said passenger traffic was up 7.7 percent in 2014, making it one of the fastest-growing major airports in the country. More than 340,000 aircraft landed and departed from Sea-Tac in 2014, up 7.3 percent over the prior year. The port anticipates serving 66 million passengers by 2034, nearly double the 37.5 million who flew into and out of Sea-Tac in 2014.

The airport is undergoing a significant expansion over the next five years thanks to the increased traffic, Cooper said. Those expansions including adding eight new gates to the north satellite terminal, which Alaska uses, and a new $600 million international arrivals facility.

“This is an absolute boon for the flying public,” said Malcolm Muir, managing correspondent for the aviation website AirlineReporter.com. Muir said fare wars between Alaska and Delta have erupted over routes they both fly, meaning lower prices, and the carriers have even pitched consumers with Seattle-specific special offers on company-branded credit cards.

The fight plays out far away from the airport, too. As part of its expansion, Delta has begun an aggressive advertising campaign in Seattle. Cars on the light-rail system that heads from the airport into downtown are wrapped in Delta advertisements. The company is the exclusive air carrier of both the Seattle Seahawks and the Sounders, the city’s Major League Soccer franchise.

Alaska has fought back, most notably by signing Russell Wilson, the Seahawks Super Bowl-winning quarterback, as the carrier’s main Seattle spokesman. Wilson even has an honorary title, the “Chief Football Officer,” and a reserved parking space in front of the company’s headquarters. But because Delta sponsors Wilson’s team, Alaska advertisements can never actually mention that Wilson is a Seahawk.

Sprague said Alaska was always aware its ownership of the Seattle market would come under threat, but he said the company didn’t expect new competition to come from a legacy carrier like Delta.

“Alaska, for much of the last 10 years or so, had anticipated that there would be a new round of competition in our network. Honestly, we expected it to be from low-cost carriers” such as Southwest and JetBlue, he said. “We prepared for competition. The competition is here. It looks a little different than we expected it to.”