Alaska’s big buy stimulated plenty of reaction. (Image: Jim Glab)
This week’s big news of Alaska Airlines’ pending acquisition of Virgin America Airlines spurred plenty of commentary from all sides. Here’s a roundup of reactions from various media and other sources.
First, there’s this: Late yesterday JetBlue, the failed suitor in the deal, responded with its own new promotion, offering “JetBlue virgins” — i.e., those who have never flown the airline – a chance to win one of 500 free roundtrip flights in exchange for their contact information.
Sit back, relax. It’s going to take a while.
Stuart Dinnis, VP of Loyalty at Virgin America in an email to Elevate members:
“There will likely be no significant changes to your flying experience for as many as 18 months or more …Until the transaction is officially approved – typically a process that can take upwards of six months – both airlines will continue to operate independently and there will be no changes to our flight schedules, the Virgin America product and guest experience, Elevate Status levels or your ability to earn and redeem points… there will be no disruption to your earnings or redemptions. Your Points balance and Status level will be honored in Alaska Airline’s Mileage Plan, which has been rankedthe #1 airline rewards program by U.S. News and World Report for the past two years. In addition, you will be able to use your Status levels and earned Points across a significantly expanded network.”
Virgin’s Richard Branson
He might be baaack!
Sir Richard Branson told Conde Nast Traveler he’s determined the Virgin America name will live on:
“Virgin America will never disappear from the United States,” the Virgin Group founder told us yesterday… The billionaire added that he will back a new airline to carry on the Virgin name, if it comes to that. “People love Virgin with a passion that hasn’t existed since the early days of aviation, and I am certainly not going to let it go to waste, even if it means starting all over again” as a new domestic airline. At least for now, Branson said he is hopeful that Alaska will preserve the Virgin name—and reputation… “Ideally, Alaska will treat Virgin “as a small independent company within a bigger company,” he said.
Does that hipster look like an Alaska Airlines customer? (Image: SFO)
Alaska Air needs to get hip to the cool California kids
Fortune magazine said Alaska needs to upgrade in absorbing Virgin:
With new entrants threatening to destabilize Alaska’s dominance in the Pacific Northwest, it was high time that the airline did something to diversify its route network beyond its core market. But if the airline wants to hold on to Virgin America’s customers and effectively compete against the other mainline carriers on a national level, it not only needs to up its game in terms of on-board service and amenities, it also needs to rethink its marketing to appeal to a younger and more urbane customer. Simply put, Alaska’s wintry and nature-focused image, bare bones service, and confusing regional name isn’t going to cut it in the big leagues.
JetBlue better watch out
The New York Times sees a big challenger to JetBlue:
Alaska Air must now be careful in how it integrates a brand beloved by its cadre of customers who adore its cheeky image, onboard Wi-Fi and soothing onboard purple lighting. For Alaska Air, buying Virgin America was in some ways a natural consequence of the successive mergers that have already concentrated domestic air travel in four primary airlines: American, Delta, United and Southwest…Putting together Alaska and Virgin America will not create a new airline that can stand toe-to-toe with those bigger companies. But it will create a tougher competitor for JetBlue, with which Alaska competed fiercely to win over the smaller airline, and which it will displace as the country’s fifth-biggest airline.
American Airlines A321T now flying SFO-JFK (Photo: AA)
American Airlines likes it
Seeking Alpha sees American Airlines as a beneficiary of the deal:
American Airlines and Alaska Airlines have an extensive partnership in place that allows the two airlines to transfer passengers onto each others network and gives members of American Airlines that have status the equivalent on Alaska Airlines and vice versa. It gives American Airlines access to Alaska Airlines extensive network on the West Coast of the United States/Canada and in Alaska, both areas American Airlines is much weaker. A deal between Virgin America and Alaska Airlines will expand the Alaska network substantially, especially in San Francisco and give American Airlines indirectly also a much larger network.
Business Insider cites three reasons why Virgin is a smart buy for Alaska:
At first glance, forking out $4 billion for some terminal space, landing rights, and a few jets makes little sense, but a deeper analysis shows that Alaska’s move, though risky, may be a smart buy for three key reasons. First, the acquisition of the San Francisco-based airline keeps Virgin America and its sizable West Coast presence out of JetBlue’s control… Second, Alaska’s acquisition of Virgin America makes it an instant powerhouse airline that’s a viable competitor to juggernaut Southwest…Alaska, the seventh-largest airline in the US, now has additional resources to scale up operations in key markets around the country, such as Dallas and New York… Third, Alaska Airlines is a major brand and big-time player in the western US. But it remains relatively unknown to a lot of travelers on the East Coast and abroad. The acquisition of an airline tied to a world-renowned brand allows Alaska to make a big splash outside its traditional market.
So what about YOU? What’s your reaction to the merger of Virgin America and Alaska Airlines? Please leave your comments below.
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