Alaska Airlines Plans to Challenge Southwest's Dominance in California

by Josh Lew
Last updated: 4:30 PM ET, Mon May 16, 2016

Photo courtesy of Alaska Airlines

California has been the site of heated competition between airlines for a bigger piece of the pie on both domestic and international routes. Southwest dominates when it comes to domestic flights in California, but Alaska Airlines says it has a plan to challenge the Dallas-based low-cost carrier's top position in the Golden State.

California battleground

Alaska, which is already the dominant carrier in the Pacific Northwest, has started to talk about making a play for Southwest's California turf. The Seattle-based company's VP of communications, Joseph Sprague, let these intentions be known in no uncertain terms: "Right now we are not your go-to airline if you live in California. We plan to change that."

Newly purchased Virgin America can help Alaska with its West Coast goals in a couple of way. First of all, Virgin's gates in San Francisco, Los Angeles, San Diego and Palm Springs will be very useful when it comes to giving Alaska a great presence at important California hubs. Also, Virgin's lucrative transcontinental flights will be good for Alaska's bottom line.

Will Virgin actually be able to help Alaska?

It will take much more than that, however, to truly challenge Southwest in the state. According to the Los Angeles Times, in 2015 Alaska and Virgin together carried 8.4 million passengers on flights originating in California. The carriers' totals were 17 million passengers for both inbound and outbound services. Southwest carried 23.4 million outbound passengers (and around 47 million total).

So even with its new acquisition, Alaska isn't in a position to challenge its rival, but it does have some things going for it, especially if it decides to continue to let Virgin America operate as a separate brand.

Both Alaska and Virgin America are known for their flier friendliness. Alaska was recently named the best full-service airline in the country by J.D. Power and Associates. This is the ninth straight year that it has beaten out Delta, American and United for the top spot. Virgin America, meanwhile, has been called the best domestic airline in the Conde Nast Readers Choice Awards for the past eight years.

Virgin's high tech features and hip image have earned it a loyal following. As long as Alaska doesn't change its new partner too much, most of these fliers should remain on board.

Competition could bring lower fares

Southwest is often able to win when it comes to price, but that could change. On some routes, it already has changed. The low cost carrier actually has more expensive base fares on one of the country busiest routes: Los Angeles to San Francisco. However, Southwest does not charge for checked bags or ticket changes. Alaska and Virgin do. So the base fares do not paint a complete picture of the cost of flying on these airlines. Judging from the number of people who choose Southwest, California fliers are savvy enough to understand the concept of total cost versus base fare. Alaska may have to change its policies or adjust it fares even further if it wants to overcome this.

Alaska's announcement of its California ambitions is good news for fliers. Even with variables like baggage fees and overall quality, Alaska's challenge to Southwest should bring lower fares to the state, especially on highly competitive routes like Los Angeles-San Francisco.

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