May 26, 2015 / 6:45 PM / 3 years ago

Delta Air Lines ramps up Seattle competition with new routes

May 26 (Reuters) - Delta Air Lines Inc on Tuesday announced new flights from Seattle to five destinations in its latest move to strip market share from Alaska Air Group Inc , which is based in that city.

Atlanta-based Delta has aggressively added flights from Seattle-Tacoma International Airport in recent months as it seeks to feed more traffic there and develop it as a gateway to Asia. Investors worry that overlaps with the airport’s larger operator Alaska Airlines could lead to lower ticket prices and revenue from Seattle.

Delta’s shares fell about 2.8 percent and Alaska Air’s were down about 3.2 percent after the news. U.S. airline stocks sold off last week after Southwest Airlines Co forecast up to 8 percent capacity growth for 2015 and its competitors vowed to stand their ground, despite the possibility of lower fares.

Delta’s latest routes are part of its previously disclosed plans to increase capacity by 2 percent this year from 2014.

Delta said it would begin operating a daily flight from Seattle to Orlando in December on single-aisle Boeing Co 757-200 aircraft. It would start daily flights to Boston in April 2016 on smaller Boeing 737-800 aircraft.

It also added flights to Pasco, Washington; Bozeman, Montana; and Victoria, British Columbia, pending Canadian government approval.

Alaska Air Group subsidiaries, including Horizon Air, already fly nonstop on these routes.

By August, Delta said it will operate 128 flights to 36 destinations from Seattle. It has spent $15 million to renovate its facilities at the airport.

Delta has been growing its Seattle presence for quite some time, Sterne Agee CRT analyst Adam Hackel said, noting that the new flights are part of the trend.

“It looks like (the) first quarter was the high watermark in terms of capacity adds (by Delta in Seattle), but that’s really a question for them,” Alaska Air Group Chief Executive Brad Tilden told investors at a transportation conference a week ago. “It feels to us like things are settling down a bit.”

Reporting by Jeffrey Dastin in New York; Editing by Richard Chang

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