Alaska Airlines Could Soon Have 1 Seattle-Area Airport to Itself

In early 2019, the Seattle metropolitan area received a second commercial airport: Paine Field in Everett, Washington. While Paine Field is better known as the home of home Boeings main assembly plant for wide-body aircraft, a private terminal with two gates enables commercial air traffic to be resumed at the airport for the first time since the Second World War.

Two airlines operate in Paine Field: Alaska Air (NYSE: ALK) and United Airlines (NASDAQ: UAL). However, United recently confirmed that it will cease service there in early October. This could potentially allow Alaska to grow its presence in Paine Field over the next year or two.

Image source: United Airlines.

An emergency airport for Seattle’s northern suburbs

Paine Field is just over 20 miles north of downtown Seattle. In contrast, Seattle-Tacoma International Airport (Sea-Tac) – the city’s main airport – is nearly 15 miles south of downtown.

The growth of the Puget Sound area has resulted in frequent traffic jams on highways in and around Seattle. That makes flying from Paine Field a huge time saver for many of the more than 800,000 residents of Snohomish County (of which Everett is the county seat).

Still, airlines don’t have an easy time doing business in Paine Field. End of 2018, Southwest Airlines canceled its plans to operate five daily flights there, leaving Alaska and United the only renters when the new commercial terminal opened. And Alaska reshuffled its route map and flight frequencies in Paine Field several times before the COVID-19 pandemic turned the aviation industry upside down.

United gives up while Alaska tries new things

First, United Airlines flew from Paine Field to San Francisco and Denver. However, the airline ceased its service in San Francisco in February 2020 and chose to route all Paine Field traffic through Denver, which is a major liaison hub.

It appears that United Airlines does not see a path to profitability for the Denver route either, which led to the recent decision to withdraw Paine Field. This move is particularly noticeable given United’s aggressive growth plans. However, most travelers seem to prefer a longer drive to Sea-Tac, which offers numerous non-stop flight options, than flying from Paine Field to Denver and then moving on to another destination.

Alaska Airlines’ point-to-point strategy avoids this problem. That (along with its status as Seattle’s home airline) made Paine Field a little more successful. Last month Alaska announced it would return to its full schedule of 18 daily departures from Paine Field by spring 2022, if not sooner, noting that the airport “continues to be very popular with our guests.”

Image source: Alaska Airlines.

However, Alaska Airlines had to adjust its strategy in Paine Field to meet demand. Thirteen daily departures to nine destinations are planned for this fall, mainly to hot-weather leisure spots and key markets in the Pacific Northwest. Almost half of these flights will serve destinations that were not on Alaska’s original 2019 Paine Field route map. Conversely, Alaska Airlines won’t fly from Paine Field to Portland or Los Angeles this fall. These two cities accounted for eight of the airline’s 18 daily departures at Paine Field two years ago.

An opportunity to expand

The two gate terminal at Paine Field can only support 24 daily departures. United’s decision to exit the market will provide six of these exit “slots”.

Alaska Airlines will likely pursue these slots to make room for future growth. In fact, without additional slots, the airline would have to cut the leisure and regional routes on which it recently added flights to restore meaningful service to top business markets such as Portland, San Francisco, San Jose and Los Angeles.

Other airlines are unlikely to seek these slots, especially as Paine Field’s gate restrictions limit its appeal to low-cost airlines looking for growth opportunities. Alaska Airlines could thus have a monopoly in Paine Field by the end of the year, adding to its leading position at Sea-Tac.

With a maximum of 24 permitted daily departures from Paine Field, Alaska’s operations there will never be the biggest profit driver. However, the Paine Field Service could become a profitable niche for Alaska Airlines – and that is incredibly valuable in the extremely competitive aviation industry.

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