Virgin America might keep its identity despite its acquisition by Alaska Airlines. (Photo: Chris McGinnis)
When Alaska Airlines finalized its acquisition of Virgin America, most observers assumed that the latter carrier’s identity would be absorbed into the purchaser’s, which has happened with other U.S. airline mergers. But that might not be the case.
Alaska CEO Brad Tilden, speaking in New York this week and following up with an Associated Press interview, said his company is “looking at” the possibility of maintaining the separate brands of the two airlines, although no decision has been made yet.
Tilden told the AP that he is “taking a good look at running two brands for some period of time, perhaps forever.”
“We believe in the power of the Virgin America brand and we don’t want to lose all that loyalty and revenue that exists today,” he said.
Tilden noted that while the acquiring carrier in U.S. mergers traditionally extends its own brand to the merger partner, that has not been the case in Europe – e.g., Air France and KLM maintain their separate identities even though they are a single company, and the Lufthansa Group has maintained the previous brands of its acquisitions, including Swiss and Austrian Airlines.
Alaska Airlines and Virgin America have distinct products and passenger markets. (Photo: Jim Glab)
In any case, Alaska and Virgin have very distinct products, and trying to decide which parts to keep and which ones to discard in a single merged brand might be a real problem, especially given the loyalty of Virgin’s flyers to its unique characteristics, like its mood lighting and the ability to order meals from seatback screens.
The two airlines are currently undergoing the usual investigation by the Justice Department’s Antitrust Division prior to government approval of the merger, and shareholders must give it their OK as well. Tilden said he expects the regulatory approval process to be completed within the next few months.
Readers: Do you think Alaska should keep Virgin America as a separate brand? If not, which parts of the Virgin experience should Alaska adopt for the combined airline?
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Not Virgin Alaskan? /sarcasm
It makes no sense to me. Alaska has been doing well for a long time and VX has not done that well despite everyone else making a ton of money. Why would you keep the brand that lags in the financial market? VX has lots of issues. Their F product is either too over the top for short hauls or not up to snuff compared the legacies and B6 for the NYC – California routes. Their biggest benefit of the Y cabin is their TV screens, but the legacies have them on their new planes. DL has a nice screen on their 739s, 753s, refurbished 319s and 738s.
Not a bad idea really, but Alaska bought/owns VA. I think VA should remain separate and distinct. Alaska could manage the aircraft type differences more efficiently. Bottom line… bottom line.
This.
It all really comes down to WiFi. Virgin has invested a ton in ViaSat technology. Even though they started to charge for it, it’s still far superior to what any other airline offers by all accounts.
Alaska needs to bite the bullet and put in this technology in *all* their planes, and make it *free*.
The reason is simple: the one thing that ties the “West Coast” together is the need for lots of bandwidth, everywhere you go.
Hollywood, Silicon Valley, the Pacific Northwest, the Mountain West….every major industry and every person expects fast Internet every place they go. If Alaska can make that (expensive) commitment, all the other decisions fall into place. Alaska can retain Virgin’s core customer base while not having to take on other white elephants like mood lighting.
Alaska should rebrand as Virgin America.