End of the Affair: Are American and Alaska Set to Compete?

(MoneyWatch)  You wouldn't think that American Airlines' (AMR) decision to add flights from Los Angeles to Reno would mean all that much, but I wonder if this is the opening of a very small crack in the airline's longstanding partnership with Alaska Airlines (ALK). Could this be the beginning of the end?

Yes, it's entirely possible that I'm reading into this too much, but it makes a lot of sense. American and Alaska have been partners for a long time. They not only have frequent flier agreements, but you can even earn elite qualifying miles when flying on the other. They also do extensive codesharing.

But Alaska has been moving much closer to Delta (DAL) ever since the Delta/Northwest merger went through. In November 2008, Delta and Alaska expanded their agreement to include reciprocal elite benefits and lounge access. Delta began adding transpacific flights from Seattle, undoubtedly relying on Alaska to feed those flights.

This past October, Continental (CAL) and Alaska ended their partnership, and that led to some speculation that Alaska, an airline that has long been happy to partner with just about everyone, was looking to settle down.

That brings us to the Los Angeles to Reno announcement. American's regional subsidiary American Eagle has flown regional flights out of LA for quite some time. Today, that operation has shrunk to only include flights to Monterey, San Jose, Fresno, Santa Barbara, and San Diego. After years of shrinking, Eagle is now adding Reno.

This is particularly interesting because American currently codeshares with Alaska Airlines subsidiary Horizon Air on the same route. Horizon flies the route three times a day. American will do the same and now go head to head with its own partner.

It seems strange that American would add this route if they were planning on sticking with their very capable partner for the long run. So is this a chink in the armor of a once strong relationship? I'm inclined to think it just might be.

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