Today, American Airlines (NASDAQ: AAL) and Alaska Air (NYSE: ALK) have a common problem: Delta Air Lines (NYSE: DAL). Since 2014, Delta has built up a global hub in Seattle, gaining market share in Alaska Airlines' home city and threatening its ability to compete for corporate travel contracts there.
Meanwhile, Delta has grown significantly in Los Angeles, challenging American's main West Coast hub and top transpacific gateway. Delta's joint ventures with Virgin Atlantic and Aeromexico and its planned JV with LATAM Airlines are also putting pressure on American Airlines in the U.K. and Latin America, two of the strongest points in its international route network.
Now American Airlines and Alaska Airlines have realized that they would be better off teaming up to take on the threat posed by Delta's growth. On Thursday, the two airlines announced a new West Coast partnership, which will eventually include Alaska joining the oneworld global airline alliance.