Alaska Airlines needs local business support to survive Delta Airlines takeover

Alaska Airlines 737-990(ER) (41732/4296) N408AS arrives at Ted Stevens International Airport (ANC/PANC) in Anchorage, Alaska on May 5, 2013.

(Photo by Michael Carter) 

Without conscious support from the business community, Alaska Airlines may finally be absorbed by its much-bigger competitor Delta Air Lines.

That would be a huge blow for the Puget Sound-area, in terms of lost revenue, jobs, community contributions, and everything a Seattle-based company like Alaska Air Group brings to the region.

"The benefit of having a home-town airline here, in terms of ease of schedules, the tax returns to the city, there are valuations that go beyond the price of a ticket," said Joseph Schocken, president and founder of Broadmark Capital LLC. "These are great corporate citizens, and they generate great benefits for the region."

Broadmark Capital LLC is a Seattle-based merchant bank specializing in real estate investment for high-net-worth individuals. Schocken has become a leader in the local efforts to support Alaska Airlines in the fight to keep the airline independent from Delta.

Schocken penned a guest opinion piece, " Area should rally for hometown airline," in the Jan. 30 issue of Puget Sound Business Journal.

So far the business community has not stepped up, Schocken said in a Tuesday interview, but he still hopes it will.

"Business leaders in the Northwest have to decide if it's important to keep Alaska as an independent airline," he said. "If they collectively conclude that there are real benefits in having a Seattle-based Alaska Airlines, they can prioritize Alaska travel in their corporate travel departments."

Schocken, who has an MBA from Harvard, said the business principles are clear. Alaska and Delta together control 70 percent of the flights out of Seattle, and if Delta acquires Alaska, the competitive edge will be gone.

"If all of a sudden that becomes 100 percent Delta, they will have a stranglehold on this economy," he said.

Looking at history, Schocken isn't optimistic about Alaska's ability to fight off Delta's pressure, given that the latter is eight time larger in revenue, and commands a global route structure.

"As a business analyst, you have to assume Delta is going to take over Alaska, that is the way the entire airline industry has gone, through its entire existence. You can tick off all the other airlines, the Northwests and TWAs, they all get absorbed by bigger airlines. That is the history of the airline industry," he said. "That's clearly what Delta is going to attempt to do with Alaska."

Shocken argues Delta is out-of-step with the interests of the Northwest, and points to Delta's opposition to reauthorization of Ex-Im Bank funding, an issue that has been of burning importance to Washington's largest manufacturer and exporter, Boeing.

"Delta taking a lead position against Ex-Im Bank, sits very badly with me," said Schocken, who serves on the National Advisory Board of the Democratic National Committee. "It's a hugely important issue for this region, and Delta is the lead antagonist on approval of Ex-Im Bank."

(Steve Wilhelm - Puget Sound Business Journal)