The San Francisco Bay Area is a big market for business and leisure travelers alike. Alaska Airlines has been working on building up its network in the area. One airport that is growing in importance is the Bay Area’s main gateway for long-haul international travel: San Francisco International Airport (SFO). To understand better Alaska’s interests and goals at SFO, Simple Flying spoke with Brett Catlin, Alaska’s Vice President of Network and Alliances, at the Future Flying Forum.
The San Francisco Bay Area airport ecosystem has three major airports. SFO dominates as the primary international long-haul gateway. Closer to Silicon Valley, Norman Y. Mineta San Jose International Airport (SJC) is an alternate airport that ranks at number two in the area. However, it has a smaller amount of international long-haul service. The third major gateway is Oakland International Airport (OAK), though it mostly has domestic and short- and medium-haul international services, primarily to Mexico.
The immediate network strategy
Mr. Catlin explained the network strategy in the short-term at SFO as the following:
“San Francisco is an important market for us. It has been even before the Virgin America acquisition. In terms of our go forward strategy, we really set the network contours that we want for San Francisco and where and how we want to compete. And so at this point, it’s about making sure that we have quality schedules that appeal to corporate travelers, and leisure travelers alike, that we have the right frequency to be competitive, recognizing that we’re a distant number two player in the San Francisco market.”
Number one in San Francisco is United Airlines, which uses SFO as its primary transpacific gateway. From here, United has typically scheduled flights to the South Pacific and East Asia, ranging from destinations like Auckland and Tahiti to destinations like Singapore and Shanghai, thus appealing to both long-haul leisure and business passengers alike.
Alaska Airlines cannot compete against United Airlines. First and foremost, the airline does not have the equipment to run long-haul operations, and the infrastructure in San Francisco limits the creation of two major hub-based airlines. However, the airline can still carve out a spot for it.
The San Francisco network
Alaska’s network out of San Francisco is relatively small, but it is growing. The airline has made some recent network additions to Anchorage and leisure-based adds to Mexico. This is in addition to its transcontinental flights to Washington D.C., New York, and Boston geared for business travelers.
Part of getting to quality schedules means also adding schedule depth, something that Alaska is focused on. The airline has shown it is willing to make the commitments necessary to succeed in the market. One such example is pulling out of Los Angeles (LAX) to New York (JFK) to devote resources into SFO to JFK to bring the schedules up there.
A growing oneworld hub
The West Coast of the United States is the primary gateway for travel from Asian and Pacific destinations. This also makes it ideal for setting up hubs centered around supporting transpacific travel. Mr. Catlin discussed how some of the strategy in SFO is also centered around becoming a growing connecting hub:
“An important part of that, similar to Seattle, is ensuring that we do have connectivity with oneworld carriers. We of course, would love to have every one world carrier fly to Seattle, that is the biggest hub on the West Coast and a great place to connect. But when you think about one of our partners like Qantas, which was amongst our largest pre-pandemic, and we think we’ll return to being a large partner next year, San Francisco is a key gateway for them. They obviously have a huge gateway in LA, but San Francisco offers, we think, a much better connecting opportunity with a carrier like Qantas in terms of the facilities, the ease of navigation, and everything that comes with that.”
While Los Angeles is a major hub for Alaska Airlines, a few structural factors make it a less-than-ideal connecting hub. First and foremost, it is a larger market than the Bay Area and has a larger population of origination and destination travelers filling up seats as is. The second is the airport’s size and some cumbersome connections. Getting from the airport’s international terminal to Alaska’s home in Terminal 6 in LAX is far from frictionless.
Qantas does not fly to Seattle, though it would not be surprising to see that next on the list of new oneworld operations to the United States. San Francisco then becomes the alternate connecting gateway on the West Coast, absent services to Seattle.
Long-haul international travel remains depressed. However, it is coming back, and there are signs that 2022 could be better than 2021 for transpacific travel. As a result, Alaska Airlines believes now is the time to invest in the Bay Area to get the network up and running for its oneworld partners. One piece of evidence of the importance of San Francisco is the plethora of codeshares between Alaska and fellow oneworld carriers out of San Francisco.
Alaska will need to add some new routes
Alaska Airlines will need to find ways to add new flying out o San Francisco. While it can sell a host of connections via Los Angeles or Seattle, that is not competitive compared to nonstop options. Some of the top destinations Alaska could add would be cities like Denver or Houston and some international destinations like Vancouver.
There is room for Alaska to also grow the depth of its schedules. That is one of the more overarching goals for the airline over the next few years. However, as international travel recovers and if San Francisco does develop into a larger connecting gateway, there will be some pressure on Alaska to add some new routes. It is in the best position to add new routes compared to the other oneworld airline in the US, American Airlines, given that it has a hub there while American does not.
For now, Alaska is in a position to get through the next few years of building up depth and making a case for Bay Area travelers to choose it. However, if international connections become a larger force out of SFO, expect Alaska to start to look at new ways to expand its network with new routes from SFO.
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