Leeham News and Analysis
There's more to real news than a news release.
Leeham News and Analysis
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- A350-1000 or 777-9? Part 2 April 11, 2024
- Pontifications: Boeing “transparency”–not so much. April 9, 2024
Pontifications: Alaska Air vs Sea-Tac Airport
By Scott Hamilton
Alaska Air vs Sea-Tac Airport: As if Alaska Airlines doesn’t have enough to do fending off Delta Air Lines, the Port of Seattle, owner of the Sea-Tac International Airport, wants to build a new International Arrival Facility (IAF) for more than $600m.
There certainly is a need. The current IAF is in the South Satellite Terminal. It’s old and it’s small. With Delta making Seattle its West Coast hub, and additional service added by a number of airlines (including, from Delta’s view, that dastardly Emirates Airline), it’s clear a new IAF is needed.
But therein lies the rub. The IAF, by definition, will be used by international flights–not by domestic flights. Yet under the Port’s financing proposal, all carriers at Sea-Tac will have to pay for the thing. Alaska, which operates more than 50% of the flights at Sea-Tac, has no international routes from Seattle save Canada. Alaska officials are understandably unhappy with the proposed funding source. Not only would Alaska be paying for a facility it won’t use, it would be subsidizing Delta’s operations.
Airport facilities are hugely expensive, and Sea-Tac is landlocked, requiring some really creative thinking to expand within airport boundaries. This undoubtedly adds to the cost. But, according to Alaska, the proposal is nearly twice the original plan. One has to wonder how the cost doubled and what gold-plated extras might be included that can be cut.
Some 10 years ago, another carrier objected to the cost of expansion and remodeling at the airport. Southwest Airlines responded by proposing to move to nearby Boeing Field (its real name is King County International Airport, owned, as its name suggests, by the County). Alaska threatened to shift about 80 flights to Boeing Field if Southwest moved there in order to remain competitive. The Port found a way to cut costs, Southwest stayed at Sea-Tac and so did Alaska.
Boeing Field is still available for flights and recently the Snohomish County Board voted to approved commercial flights at Paine Field, home to Boeing’s wide-body production plants. The Everett airport is well north of Seattle. Traffic congestion is so bad along the I-5 corridor that runs from Canada, past Everett, through Seattle, and past Sea-Tac, that a second commercial airport in Everett is needed.
Alaska has said if Paine opens to commercial flights it will put a small number there. Perhaps Alaska should think bigger. I can argue why it makes no sense for Alaska to split its operations, but on the other hand, I think Paine Field is ripe for commercial airline service.
Or, Alaska might acquire some good, zero-time Boeing 767-300ERs and start its own international service from Sea-Tac. Not only would it get some return on its investment (should the Port not come up with a different funding formula); it could give Delta a good run for its money. Delta’s international service is just “OK;” Alaska’s service would have to be better.
Port of Seattle does not care………..who gets to have to pay…….as they won’t, even if some Carriers jump ship and go elsewhere. Port sees examples like Gatwick with % of all receipts in the shops/restaurants.
With Washington State evolving into a nanny-State like New York,Ca,Chicago,Illinois,etc.
It only makes sense that they go with a Government Job Bank Scheme………….who cares about the consequences of losing some/many flights/Carriers……because the Passenger-Carrier ends up paying for the Ill conceived Grand Plans and Redundant jobs.
Port has nothing to lose……….As Government Heads are never/rarely held accountable for ill-conceived decisions.
Extra terminal will get built………..and it will cost way more than 600 million.Usual Airport/Terminal Contracts(here in the US) end-up costing 2-3 times the Original contracted amount….money seems to dis-appear and gets spent on things not related to Contract.
Hello Scott
I don’t know the SeaTac area (My only “virtual” contact with sea-tac was in my role playing days with Shadowrun 2050 :D)
Looking at Boeing Field and Renton, I see it typical airports for Cseries.
Quite short runways (Renton) and a heavy populated area. Maybe MAX7, but it might not be as quiet
Are there other “urban” airport burried deep in cities along the west coast that can be revived with “quiet” planes ?
Bonne journée
Allegiant Air flies(with their MD Series of various length DC 9s) to Bellingham,Washington (BC-Washington State Border)…………a Sleeper airport at this time with extremely low landing/Gate/Service fees.
Considering the Seattle Commuter/Traffic Jams…….would be a safer bet……………..that is until this little gem is discovered beyond Alaska/Allegiant Air…and its Airport Management has unrealistic Grand Plans.
French Airport/Merchants/Local Government in France tried that with RyanAir……………..RyanAir gave them the finger and now the airport has no people flying into it……………….LOL!
Rule of thumb…..some Regional Airports/Jurisdictions (regardless of Country) think………… getting/have a mainline Carrier is like winning the Lottery………….Extort and inflate prices for all……………Obviously it backfired with RyanAir.
Paine Field and Boeing Field are the candidates in Seattle. Renton doesn’t really offer any advantages. Maybe really long term McChord AFB as a civilian airport, south of Tacoma.
I can see a problem with the following statements:
-“Alaska might acquire some good, zero-time Boeing 767-300ERs”
-“Alaska’s service would have to be better.”
Delta can operate with A330 or A350. So Alaska’s 767 has to offer a 7-abreast standard. No LD3 either. Then Alaska won’t be competetive on price. There are still some A330 CEO available.
WestJet is paying a reported $225,000-$250,000/mo for the 767-300ERWs it is acquiring, a capital cost that is way below what DL pays/will pay for the A330/A350. If AS can get the 763ERW for a similar price, it would have a major advantage for a much lower risk strategy.
Hell Yeah,that’s one hell of rental deal……………..and 767-300ERs have a way of taking off with decent passenger-loads,fuel loads for medium-long distances…………even on short runways………….like Maui.
I should know………….. I regularly do 767-300 ERs Maui-PDX(vice versa)/other West Coast jump-off points,etc routes quite often.
It’s always “turn and full-throttle burn” after leaving the gate at Kahului. 767s tend to be slow and loud at altitude……………but they always get you where you are going .
Bellingham Airport………close to the short runway length of Kahului…………..767………….can just about go anywhere from there too.
Mr. Hamilton,
If I were Alaska Airlines, I’d be pretty pissed, too. If Delta wants Sea-Tac to be a hub, then they should shoulder the bill for the facilities improvement.
D McNamara: I know the feeling. I was stationed in Hawaii and made more than my fair share of trips to/from Maui, either to have a quick weekend there or a stop to/from the mainland.
I do believe Alaska already flies to Hawaii from Bellingham with their ER737s.
And I guess there is talk that Allegiant will use its 757 to get to Honolulu or Maui also. Problem solved…………as that Airport is so easy doing the Basic Airport needs right now. No fuss there……..but their operations are quite basic right now………No Grand Shopping Experience.
And with very little traffic headaches and quick-pace…..getting a flight from there is a very positive (although a bit primitive experience); compared to the Larger and more Ritzy regional Airports…………where their focus is too deliberately hold you up to spend lots of money.
Allegiant found its Hawaii service to fall short and it will be disposing of the 757s on an accelerated schedule. It took a $41m write off on these airplanes.
Time to build a DIA clone in Arlington for Alaska and Southwest.
Or, Alaska matches prices out of B-ham to Hawaii, LA, Spokane, Salt Lake, and Denver on a daily flight basis.
Yay! The February ICAO Monthly Monitor is out, and thus we have data for all of 2014. In the global aviation system, the year-on-year RPK growth was around 5.8% for 2014. International traffic had a slightly elevated year-on-year RPK growth of around 6.0%. In the global aviation system, the passenger load factor was 79.7% in the year 2014, an all-time record and a very extraordinary number indeed. The number of freight tonne-kilometers (FTK) grew by a solid 4.5%, year-on-year.
The RPK number for 2014 will likely top 6 trillon for the first time. For comparison, the yearly RPK number a decade ago, in 2004, was about 3.6 trillion. The growth of the industry is formidable. By 2030, the number could well top 12 trillion, and the world will need Boeing’s new and larger MoM plane desperately.
Can you provide a link, please?
Allegiant does not have the best customer-experience. BTW……… thanks for the Allegiant update…so it’s just Alaska’s game in Bellingham.
But how much longer can they keep buying 2-3 million dollar used MD80s as part-out specials to keep the very old MD Series fleet alive?
Surely the Airbus orders can’t fill all the route slots..unless they rent/purchase more new/used planes
Absolutely!
http://www.icao.int/sustainability/Documents/MonthlyMonitor-2015/MonthlyMonitor_Feb15.pdf
For historical and annual data, the index page is:
http://www.icao.int/sustainability/Pages/Air-Traffic-Monitor.aspx
Actually the current facility is in the South Sattelite.
And then there’s stuff like this: http://www.news1130.com/2015/03/22/alaska-airlines-employee-pays-for-vancouver-womans-airfare-after-runaround-by-delta-airlines/
Given a fair shot, Alaska won’t have a problem maintaining its share (like Westjet / Air Canada up here in the north)
Paine is probably the best option for an alternate to Sea-Tac. King County is too close to offer much benefit over Sea-Tac when coming from the north. Bellingham is rather farther from the city and primarily operates as a cheap cross-border alternative for nearby Vancouver, much like Plattsburgh does for Montreal and Buffalo for Toronto.