Alaska positive on Salt Lake City expansion

Washington DC
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Alaska Airlines is “doing well already” at Salt Lake City International airport after less than a year in the market, says chief financial officer Brandon Pedersen.

The Seattle-based carrier launched service to the Utah capital with two daily flights to Seattle Tacoma International airport on 4 April 2013, and will launch new service to Boise, Las Vegas, Los Angeles, Portland (Oregon), San Diego, San Francisco and San Jose this coming June.

In all, Alaska will operate 13 daily flights from Salt Lake City at the end of June where it only had two flights a year ago.

“It connects nicely to our existing network,” says Pedersen while speaking a JP Morgan Aviation conference in New York on 10 March. “As we grow, we want to grow out of places where we have point of sale strength.”

Alaska’s well established markets along the US west coast being the point of sale for the new Salt Lake City flights.

What Pedersen did not mention is the fact that all of the new flights compete directly with Alaska’s codeshare partner Delta Air Lines, who operates a large hub at the airport.

Atlanta-based Delta has expanded into a number of Alaska’s core domestic markets out Seattle since June 2013, including Anchorage, Las Vegas and Los Angeles. The carrier plans to add flights to at least 10 additional cities in 2014, including Portland, San Diego and San Francisco.

Speaking about Alaska and Delta’s relationship, Pedersen reiterates previous comments that Alaska expects the level of codesharing between the airlines to decrease going forward.

Southwest Airlines also flies between Salt Lake City and Las Vegas, Los Angeles, Portland and Seattle, Innovata schedules show.

Pedersen brushes off concerns that Alaska’s Salt Lake City growth will depress yields.

“We are not growing overall system capacity,” he says. “This is solely reallocation stuff.”

The reallocation applies to both the new Salt Lake City routes as well as new transcontinental flights from Seattle to Detroit, New Orleans and Tampa, says Pedersen.

Alaska anticipates a 5.5% annual capacity increase in 2014. This is driven by replacing smaller aircraft with larger Boeing 737-900ERs and its cabin retrofit programme that adds up to 11 additional seats to its 737-800 and 737-900ER aircraft.

The airline’s fleet will grow by only two aircraft in 2014, with its remaining eight 737 deliveries replacing other aircraft.