I must say, I’m a bit surprised that Delta didn’t compel Korean Air not to go in this direction, given competitive dynamics…
Alaska & Korean Air want to restore codeshare flights
Alaska Airlines and Korean Air have just filed with the Department of Transportation (DOT), requesting permission to launch a codeshare agreement (thanks to Steve for flagging this). Alaska flies from Seattle (SEA) to Seoul Incheon (ICN), and the idea is that Alaska wants to codeshare on Korean Air’s flights from its Incheon hub to Bangkok (BKK), Busan (PUS), Delhi (DEL), Hanoi (HAN), Ho Chi Minh City (SGN), and Singapore (SIN).
With a codeshare agreement, Alaska will be able to place its “code” on Korean Air flights between those cities. When it comes to airline partnerships, a codeshare agreement is more than an interline agreement, and less than a joint venture.
On the surface, this is a totally logical level of cooperation, and it’s a win-win. Alaska flies to Incheon, and presumably the routes on which it is requesting to codeshare are those with the highest passenger demand. So this will allow both airlines to fill seats on their respective flights.
Fair enough, right, so what’s the problem? Well…
I can’t imagine that Delta is too happy about this
Delta and Korean Air have a transpacific joint venture, which is the closest level of cooperation you can have between airlines. Delta’s transpacific network is based so heavily around funneling passengers through the Incheon hub (though Delta is finally adding flights to other destinations in Asia).
Delta even owns a stake in Korean Air, and if we’re being honest, Delta is a very controlling airline partner. That’s understandable, because the airline has the clout to request that from its partners.
Alaska and Korean Air had a close partnership for many years, including a codeshare agreement, reciprocal points opportunities, etc. However, over the years, that was progressively scaled back. One would logically assume that Delta had a part in that, and pressured Korean Air to cut ties with Alaska, since Alaska will partner with just about anyone, as long as it’s a win-win.
Keep in mind that Delta has a special dislike for Alaska, given that it has been trying to grow in Seattle and go head-to-head against Alaska, but Alaska has stayed dominant. Delta is so used to going into markets and being number one, while the story has been a bit different in Seattle.
Delta wants to do everything it can to hurt Alaska, so I’m a bit surprised this happened. Admittedly Korean Air can of course still make some independent decisions, but there is close cooperation between joint venture partners. I can’t help but wonder if Delta executives were at all made aware of these plans, or if they’re just learning about it with the regulatory filing.
For what it’s worth, Alaska is in oneworld, and hopes to join the transpacific joint venture with American and Japan Airlines. However, that doesn’t preclude a codeshare agreement, especially out of a hub without much oneworld service.
What’s surprising here is that Seattle to Seoul is a market where Alaska competes directly with both Delta and Korean Air. So you’d think they’d try to drive Alaska out of the market, and the codeshare doesn’t help with that, since it helps Alaska fill seats.
Bottom line
Alaska and Korean Air have requested permission to launch a codeshare agreement, which really represents the restoration of such a partnership. The idea is that Alaska could place its code on Korean Air’s flights between Incheon and select destinations in Asia.
On the surface, this is a logical commercial agreement. The reason it’s a bit surprising is because this kind of an arrangement was cut some time back, and I have to imagine that Delta played a part in that. So I’m not exactly sure what’s going on here.
What do you make of Alaska and Korean Air trying to once again strengthen ties?
