Saturday, November 15, 2008

Delta buying Alaska Airlines? Unlikely.

The news that "the new Delta" will announce a new marketing alliance with Alaska Airlines on Monday has generated some buzz and speculation that Alaska will eventually be acquired by Delta. That's unlikely, for several reasons.

First and foremost, regulators would not allow such an acquisition. Delta is already now the world's largest airline, and it's not going to get any bigger.

Secondly, it wouldn't make sense for Delta. It will be years before the company's namesake and Northwest-branded components actually integrate their operations, systems, and programs to the point that another acquisition would be anything but a disaster.

Finally, it wouldn't make sense for Alaska Airlines. America's smallest legacy carrier is first and foremost focused on Seattle-based trips to and from the state whose name it bears, and it has consistently chosen bilateral partnerships with other airlines to ensure that it maintains this dominance. (That is why, even though Alaska is not a member of any of the three major air alliances, it has mileage-earning reciprocity with four of its six legacy counterparts; only United and U.S. Airways do not offer reciprocal earning with Alaska.)

So, don't make too much of the new marketing alliance. Marketing is marketing, operations are operations, and there's a pretty broad gulf between the two.

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