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updated 2:54 PM CDT, Jul 28, 2018

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Deal-maker Joe Schocken committed to making sure an Alaska-Delta deal never comes about

The walls of Joe Schocken's office at Broadmark Capital are filled with the financial "tombstones" of deals his firm has done over the years, but he is in the forefront of business-community efforts to make sure one deal doesn't come about. The deal that is anathema to Schocken would be the one-day disappearance of Alaska Air Group into the covetous arms of Delta Airlines.

When Schocken and I first discussed what has become Alaska's David-and-Goliath struggle with Atlanta-based, 10-times-larger Delta, he forcefully said "this community needs an anti-Delta campaign!"

We concluded the conversation that afternoon in the office at his financial-services firm with his reluctantly agreeing with me that we needed to help drive a positive campaign for Alaska because "anti" campaigns don't sell well in Seattle.

But in light of recent events, as Schocken and I visited again yesterday, I found myself saying "You may have been right the first time, Joe, given what has been unfolding of late."

The issue, of course, is growing concern within the business community in Seattle and Spokane that Delta is bent on driving Alaska, through tactical use of its dramatically greater income as one of the world's two largest air carriers, into a merger or acquisition.

But jumping ahead of the battle for passenger dollars at this stage of their competition, the current point of contention between the two airlines is the question of construction of a new international-arrivals facility at Seattle-Tacoma International Airport.

And a step that should be key to an "anti-Delta" mood in this community is Delta's blatant effort to insert one of its own onto the Port Commission that governs Sea-Tac operations, getting Des Moines resident Ken Rogers, a Delta pilot who has been on Delta's board for eight years, to seek election to the commission in the upcoming election.

Shocken shook his head as he discussed the logic for that "arrogant action, trying to directly control government decisions for Seattle from Atlanta" to instill anger in this community.

He notes that the projected cost of the international facility, which would benefit Delta more than any other airline but be paid for primarily by travelers on domestic flights of Alaska and other carriers, "isn't money for a new terminal but basically just a sky bridge to a concourse, being positioned as an international-arrival building."

How that eventually plays out, with Delta urging the Port Commission to approve the plan that has doubled in cost to an estimated $608 million with much more cost likely to come as a plan actually begins to be drawn up, is still to be decided by the commission.

  

Alaska's contention is that it's unfair that fees attached to domestic tickets would be used to benefit passengers on international flights and that the airport should go back to the drawing board to devise a less costly plan.

The commissioners are undecided on how the cost share should be parceled out, something Delta would like to influence with its own commission member.  

"Another angle that I think Alaska Airlines executives should be pointing out is how would you like to be an Alaska businessman envisioning a possible Delta takeover," Schocken observed. "As big a problem as it would be for Seattle to lose Alaska as its hometown-focused airline it would be a much bigger problem for the state for which Alaska Airlines is the lifeline and understands the needs of the state. They've grown up together."

"I doubt if the people in Atlanta even know where Alaska is," he chuckled.

"It isn't just trying to own a seat on the Seattle Port Commission that should upset people who are fans of Alaska," Schocken said. "What you have is a series of things coming together, including Delta beginning non-stop service to Sitka. There is no international traffic and little growth coming out of Sitka, thus undermining Alaska is the only purpose behind that flight."

"Finally there's the issue of June 1 reauthorization or the Export-Import Bank, something very important to our region's economy for which Delta's Dick Anderson is the key opponent, claiming it subsidizes its competitors," Schocken said. "Meanwhile Delta is buying planes from Canadian and Brazilian manufacturers and receiving subsidies from their governments. That makes Delta hypocritical, not mention anti-Boeing, but that's another subject."

Schocken emphasized, as he says he does when it makes his Alaska-Delta points in conversation he routinely has at business meetings or cocktail gatherings, to what he says are reactions of tremendous support for Alaska, that he's not hoping to see Delta lose a battle with Alaska. Rather he wants to see Seattle and the Northwest served by two successful airlines.

But in any event, he says "we're only in the first or second inning of a likely long game."

Meanwhile, Alaska keeps its focus on the goal of remaining the nation's most respected domestic carrier, last week being singled out for the J.D. Power customer-satisfaction award for the eighth consecutive year.

It was USA Today, not an Alaska press release, that noted "Alaska Airlines and Jet Blue continued their stranglehold atop the annual J.D. Power customer service satisfaction survey of North American carriers."

Alaska CEO Brad Tilden has avoided negatives about Delta in speeches he's given in recent months.

But he is the guest at next week's Business Journal Live q and a event where he will be interviewed by PSBJ Publisher Gordon Prouty, an environment where he could strategically refer to comments he's heard made by Alaska fans about Delta without saying those things himself.

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Delta Airlines' Dog-Gone Disaster and CEO's 'PR tailspin' on Mid-east airlines merit sharing

 

It's coming to be known as Delta's Dog-Gone Disaster. It's the tale of the plight of the distraught family whose dog was lost on a Delta Airlines flight out of Los Angeles last fall, and the more than 200,000-plus supporters who have petitioned Delta via the website
change.org to take responsibility in some manner.

 

It's a story that suggests Delta CEO Dick Anderson may need to spend more time keeping his eye on his own company rather than eyeing someone else's airline, as in his acknowledged coveting of Seattle's hometown airline, Alaska.

Apparently it's not a unique case of doggie disasters at the world's second largest airline, an airline that may have grown too large for the CEO to be personally bothered by such things as worrying about a lost family member of customers (since a family member is how a pet is viewed by most owners). One blogger has even referred to Delta as "The Bermuda Triangle of Dog Travel."

Not flying on Delta would be a logical response for pet owners as a statement for the airline to step up, take responsibility, and figure out how to improve its pet-care performance. And every dog lover should insist on an apology, and not from some underling but from CEO Anderson himself.

I checked on change.org, which I hadn't been aware of, to ensure the site is legitimate and here's what I learned:
Created in 2007 by a then-32 year old NYU law school dropout named Ben Rattray, change.orghas become one of the largest sites on the web for anyone seeking to pressure politicians, corporations or others with what the web company describes as "a public shame campaign." It's a certified B Corporation with a stated mission to "empower people everywhere to create the change they want to see." 

  

Rattray says that "with cynicism about government at an all-time high," he can keep growing by keeping the stories personal. The petitions that catch fire on

Change.org are almost always tied to human drama, and so it is with Frank Romano and his family, whose dog, Ty, disappeared on the Delta flight from Los Angeles to Tampa, where the family was moving. 

 

Here is a bit of the story of Ty's disappearance, from the

change.org website, as written by the family. 

 

"Ty had been checked by our vet and transported in an airline approved-crate. Delta confirmed everything was in order prior to assuming responsibility for Ty. When we said our goodbyes to Ty, his tail wagging, we never imagined it would be for the last time.

"Prior to takeoff, a Delta employee approached Frank and took him aside to tell him that Delta couldn't find Ty. Our son was confused and horrified listening to Delta's story.

 

One minute Delta had the dog, and the next he was gone. They claimed there were no witnesses. Eventually Delta would state Ty had 'compromised the kennel on his own.'  

 

"When we got the crate back there were no bite marks, scratches, or other damage inside that would corroborate Delta's story. All we found was a crack on the outside of the kennel that wasn't there when Delta checked Ty into their custody.  

   

"After Delta lost a member of our family all we asked for was help searching for Ty. Delta denied our requests in helping provide resources for the search effort. Instead, we had to rely on many kind-hearted volunteers who spent weeks searching, putting up posters, and talking to people in the area," the family wrote.

More than 211,000 people, and counting, have signed the petition for the Romano family's plea: "Please join us in calling on Delta to release their official report, apologize to our family, and put in place a plan to prevent future pets from being lost. Please sign and share our petition today."

 

Others who do blogs and have pets, are tuning in to Delta's doggie dilemma, including by friend Al Davis, a widely respected turnaround expert, who does a blog on various business issues.

He is planning a blog offering Delta some advice on customer service and corporate culture, something the onetime Intel general manager knows a thing or two about, on which Delta apparently could use some guidance.

Meanwhile, I can find nothing to indicate that Anderson has offered the distraught family any sort of apology himself. But that reluctance apparently would fit with Anderson's pattern.

And since a key reason for this column is to give readers a sense of the kind of leader the guy is who would like to turn his airline into Seattle's "hometown airline," and a bit about the character of the airline he guides, another, perhaps more dramatic, example of Anderson's unwillingness to take responsibility is the recent gaffe related the Middle East.

That example of his apparent "I don't personally apologize" approach came after his recent statements, what CNN described as a "clumsy comment" that was more like a mix of ignorance and arrogance, in which he seemed to link Gulf-based air carriers with the 9/11 terrorist attack. The apology for what CNN described as a Delta "PR tailspin," came not from Anderson himself but from "a Delta spokesperson."

Akbar Al Baker, CEO of Qatar airlines, offered perhaps the most appropriate put down for Anderson over the comments he made, which were in connection with his effort to kill the Ex-Im Bank that is so important to Boeing. For those not familiar with it, the Export-Import Bank is the official export credit agency of the United States with the mission of ensuring that U.S. Companies have access to the financing they need to turn export opportunities into sales, as in sales to Middle East airlines.

Al Baker said on CNN that the Delta chief "should be ashamed to bring up the issue of terrorism to try to cover his inefficiency in running an airline. Mr. Anderson should be doing his job improving and competing with us instead of just crying wolf for his shortcomings in the way his airline is run."

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