Last week on The Air Show podcast, Jon Ostrower, Brian Sumers, and I dove head first into the two northern corners of the Continental US, Boston and Seattle. Delta has officially designated each city as a hub in the last decade, but the competitive situation and outcome has been dramatically different.
If you haven’t subscribed to the podcast, well, you’re missing out on our discussion. Here’s how you can do that:
But some of you who are already listening to the podcast were curious to see the numbers we talked about. I’m happy to oblige. Thanks to Cirium, I was able to pull a lot of data to look at these two markets closely.
Seattle
It was June 2014 when Delta announced that Seattle would become a hub for the airline. It had always been an important gateway city in the Northwest network, linking the US to Asia, but Delta hadn’t made much of it post-merger.
Seats Departing Seattle By Airline
Data via Cirium
When Delta decided to make a run in 2014, Alaska did not hesitate to respond. It immediately announced it would increase Seattle departures by 11 percent, and it began adding new cities.
New Alaska Seattle Destination Maps generated by the Great Circle Mapper – copyright © Karl L. Swartz.
Red was added 2014-2015, Yellow was added 2017-2019, and Green was added post-pandemic
It matched Delta’s moves, and it strengthened frequent flier partnerships with American and international carriers before joining oneworld to try to match Delta’s offering as best it could with the fleet it had.
Since the pandemic, it has returned to its torrid pace of growth while Delta has taken its foot off the gas.
Boston
Over on the other side of the country, it has been a different story. Delta declared Boston a hub five years later than Seattle, in June 2019. Delta had a long history in Boston dating back to its acquisition of Northeast, but it had let that presence atrophy over time. Other than its hubs, Delta had fallen to serving only Bermuda, Columbus, Cancún, Indianapolis, London, Orlando, Raleigh/Durham, and Toronto at its nadir. It started to climb back up in 2014, something that accelerated in 2017 and turned into a full hub in 2019.
Seats Departing Boston By Airline
Data via Cirium
When Delta did this, JetBlue did nothing. It had been steadily growing, pouring capacity into Boston, and it just continued as planned. It added no new cities before the pandemic.
During the pandemic, JetBlue focused elsewhere, and it still hasn’t built Boston back to its pre-pandemic numbers. Delta, meanwhile, has continued its elevated pace of growth in the market.
The one big thing JetBlue did during the pandemic that impacted Boston was enter into the Northeast Alliance with American, which is why I’ve included American in the above chart. That did force JetBlue to divert resources to fill those LaGuardia slots American handed over, and Boston suffered. Had this not been shot down in the courts, it would have probably been ok, but once it was forced to disband, Delta found itself in the lead with JetBlue having to decide which way to go.
The Differences
Just because these have gone differently doesn’t mean one was right and one was wrong. These are very different situations, and it’s important to take that into account.
- Timing: Alaska had a full five more years to respond in Seattle before the pandemic upended everything. JetBlue had less than a year in Boston, though the signs were there before the actual anointment of the hub title.
- Partnerships: I already talked about how Alaska used partnerships to its benefit in Seattle while JetBlue focused on the NEA with American which had to disband in the end. JetBlue didn’t do as much with international partners, but its entire structure from frequent flier partnership to lack of lounges made that a harder thing to do anyway.
- Network Target: Alaska is a hub-and-spoke airline just like Delta. Both fight for business and leisure travelers alike. Alaska could respond to Delta’s move more easily than JetBlue which is a leisure-focused airline and wouldn’t have a place in many of the bread-and-butter markets for Delta.
- Fleet: Alaska has a narrowbody and regional fleet that can go toe-to-toe with Delta. Alaska used its regionals to enter thinner mid-con markets which it could then upgauge later. JetBlue has nothing with fewer than 100 seats, and those Embraer 190s don’t financially work on longer distances. JetBlue just doesn’t have the metal to match.
- Market Importance: Perhaps most important of all, for Alaska, Seattle is everything. If Alaska loses Seattle, it has no real reason to exist. For JetBlue, Boston is important, but it has New York too. It doesn’t have that same level of importance, though it was JetBlue’s one opportunity to be a clear number one in an important market.
All of this came together to make it more challenging for JetBlue to respond than it was for Alaska. The market design really shows how this came together. Here’s my favorite chart.
% of Destinations Served by One or Both Carriers
Data via Cirium
In Seattle, Alaska has expanded to be able to serve every market that matters. Sometimes it overlaps with Delta but more often it does not. The only markets that Delta has to itself are long-haul where Alaska doesn’t yet have the fleet to match… oh, and Lewiston, Idaho. (Keep that one in your back pocket for trivia night.)
But in Boston, it’s totally different. The percent of overlap is actually about the same, but it’s a more even balance of markets that each serve alone. For JetBlue, it’s a lot of Caribbean/leisure routes. For Delta, it’s those mid-size midwestern cities that JetBlue had hoped American would be able to serve for it through the NEA. Now that it can’t, JetBlue doesn’t have a real ability to respond.
Financially, Delta’s results in the two corners look pretty different as well.
Delta Domestic Stage Length-Adjusted PRASM Q4 2023 by Hub
Data via Cirium
Seattle isn’t even in the same ballpark as the rest of the hubs when it comes to unit revenue. That doesn’t mean Delta is completely unhappy about Seattle and thinking of leaving or anything like that. It’s just that the airline has not had quite the same easy welcome as it encountered in Boston.
The beauty of Delta’s model is that it invests for the long term, and it will keep chipping away until something is positively contributing to the network. It’s not easy to win a battle against an airline like that, but Alaska has certainly done an impressive job. JetBlue — whether by choice or simply not having the right tools at its disposal — has not.
I won’t do these kinds of companion pieces every week, so make sure you subscribe to The Air Show right now. A new episode will be live in just a few days.
