Alaska Airlines to Close New York Base

NYSE-listed Alaska Air Group Inc. (ALK) has announced its plans to shut down its New York base in September to reinforce its West Coast fleet, according to CNBC.

"This was a difficult decision — but a necessary one — based on the need to match our pilot staffing with the geographic areas on the West Coast where we deploy our aircraft every day. All of our JFK-based pilots are being offered the opportunity to transfer to either Los Angeles or San Francisco," a spokesperson for the airline told CNBC.

The airline currently operates on routes from JFK, Newark, and La Guardia. It has five flights per day from JFK to both LAX and SFO, while there are fewer flights from Newark As a part of the plan, the airline has asked more than 100 pilots to relocate to California over the next few months. 

Alaska acquired Virgin America in April 2016 for around $2.6 billion to emerge as the fifth largest airline in the U.S. (See also, Virgin America Bought by Alaska Air for $2.6B.)

Post acquisition, it served more than 44 million travelers during the year 2017. Alaska's flight composition then jumped from 4 percent to 10 percent for the mid-continental and East Coast routes, and its California presence jumped from 10 percent to 15 percent. Following this shift to the West Coast, the above network composition for Alaska Air is expected to increase further. Alaska Air currently serves more than 115 destinations on the West Coast.

Alaska Set to Face Competition

The transition expected in September will mean fewer Alaska Air flights from San Francisco and Los Angeles and to JFK and EWR. How the move will pan out remains an open question.

Competitor United Airlines (UAL) already scores well ahead of Alaska with more than 40,000 seats per day at SFO, nearly four times more than Alaska. Delta Airlines Inc. (DAL) has increased the connectivity to more than 50 destinations from the Seattle-Tacoma International Airport, including connectivity to eight countries allowing more choices to attract both domestic and international flyers. In Hawaii, Alaska faces Southwest Airlines Co. (LUV) where the latter is introducing a low-cost service from four cities of California, including inter-island connectivity.

Alaska Airlines says its growth model consists of three parts, flying customers to desired locations for affordable fares, building loyalty through benefit programs and adding network depth and frequency, reports CNBC. (See also, How Buffett Lost Big on United Airlines?)

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