David Rosenthal: evaluation

Transcript context

…So artisanal. So, yeah, from a category perspective, I think absolutely I would chalk it up to capacity. Yup. The other point I want to explore here a little bit is there’s a really interesting context for this deal that people in Seattle might be aware of, but I doubt anyone not here is, and that’s that Delta actually has been putting a huge amount of pressure on Alaska here in Seattle in their hub. Delta has been growing over the last few years their presence in Seattle a lot. For a long time I think Alaska was probably either concerned or expecting that Delta was going to make an offer to buy them, and they haven’t. Instead, they have just organically grown and taken more and more gates here in Seattle. It’s really interesting. I was talking to somebody who was far more of an airline industry expert than we are and he was making the point that the frame of reference is really different for these two companies, Delta and Alaska. Alaska is a domestic carrier and it’s a West Coast focused carrier. Delta is an international carrier. Delta coming in to Seattle was part about competing with Alaska domestically because Alaska has built a really nice business here. But also, an even bigger part probably for Delta is using Seattle as a gateway for international flights to Asia because gate real estate, as you were saying Ben, is so scarce and the other big cities on the West Coast at SFO and in LAX is so competitive and impossible to get more real estate there. I think Delta really viewed Seattle as their gateway so that they could send people from all over the US on flights to Seattle and then hop over to Japan, to Korea, to China, to what-have-you. Makes sense.…

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