Well I guess we all saw this coming. At least as of last week. But before that, it seemed unfathomable that San Francisco would lose its hometown carrier to another airline.
But here we are. Today Alaska Airlines and Virgin announced at the crack of dawn that they would merge later this year, following government approvals (which likely won’t be much of a problem). It could take up to two years for full integration.
What remains to be seen is what will happen to JetBlue, which was reportedly also in the running for Virgin. Will it combine with another carrer? Will Alaska buy it, too? Or will it continue to operate without change…hmmm. We’ll keep an eye on that!
Anyway, for Bay Area flyers, this the merger brings together two of the country’s most loved airlines– Virgin is known for its fun, funky and almost luxurious service and Alaska Airlines is know for its solid product, good on time performance and profitability. Virgin America is known as “hip.” Alaska Airlines is know as “friendly.” It will be interesting to watch these two cultures and reputations meld.
Here are some key points to keep in mind right off the bat. We will of course be following this very closely at TravelSkills so stay tuned!
Fares could increase from SFO. Why? As a young upstart, Virgin America kept a lid on fares to the cities it served. For example, when Virgin landed in Denver last month, fares plummeted to as low as $118 round trip! When it took off for Hawaii last December, a fare war ensued, with fares dropping to as low as $318 round trip to Oahu and Maui. With Alaska Airlines in charge, I think much of that fare discounting will go away.
Virgin’s Elevate program will fold into Alaska’s Mileage Plan. Alaska’s statement says: “Virgin America Elevate loyalty program members into its Mileage Plan, ranked #1 by U.S. News and World Report. With Alaska Airlines Mileage Plan, members are able to redeem award miles for travel to more than 900 destinations worldwide, rivaling global alliances.”
Watch Chris talk about the merger on this CBS-KPIX video:
Virgin America flyers in the Bay Area (with big investments in Virgin’s Elevate program) will soon see a lot more opportunities to earn/burn miles– that’s because Alaska Airlines serves all three Bay Area airports– Virgin America only served SFO. From the Bay Area (SFO, Oakland and San Jose) Alaska Airlines currently has about 45 daily departures. Combined with Virgin, the new Alaska Airlines will serve 114 destinations.
Virgin’s Elevate and Alaska’s Mileage Plus programs will operate separately until the merger closes – which could take a while- so no need for members to make and immediate changes.
From SFO, Alaska now flies nonstop to: Seattle, Portland, Palm Springs, Salt Lake City, Cabo and Puerto Vallarta. From Oakland? There are nonstops to: Portland, Seattle plus Lihue, Honolulu, Maui and Kona in Hawaii. From San Jose, it has nonstops to four cities in Hawaii, plus Seattle, Portland, Eugene, Boise, Reno, Orange County, San Diego, Salt Lake City, Cabo and Guadalajara. From Santa Rosa (near Wine Country) it flies to several cities in the Pacific Northwest and Southern California via its Horizon Air subsidiary.
Here’s a link to the combined airlines’ route map.
It appears that the vaunted Virgin brand will disappear with the merger. Alaska’s statement says: “Alaska will maintain its new, refreshed brand and will work closely with Virgin America to learn more about the award-winning Virgin America brand and customer experience.” Which means that we will hopefully see an end to things like Virgin’s once fun, now irritating pre-flight safety video.
Hopefully Alaska Airlines will adopt Virgin’s dedication to technology by installing seatback video and wi-fi connections on 100% of its aircraft very soon. Like Virgin, Alaska uses Gogo for inflight wi-fi. Here’s a link to Alaska’s inflight entertainment and wi-fi options.
It will be interesting to see if Alaska Airlines adopts Virgin’s popular RED seatback entertainment system that allows passengers to order food from a menu and have it delivered by flight attendants. Alaska Airlines offers hot meals (for sale) on all flights over 2.5 hours. It serves Starbucks coffee.
Alaska recently updated its “look” which Bay Areans will soon see a lot more of. And it’s no slouch when it comes to inflight comfort and tech. For example, it has all-leather recaro seats and oversized overhead luggage bins on its newest Boeing 737-800 and 737-900 aircraft. It has seatback power (standard and USB) on nearly all its planes now. It offers “preferred plus” economy seating with more legroom and a free cocktails.
While Virgin America was showy and fun, it always struggled— only recently showing profits as the cost of fuel declined. Combining with Alaska Air should help shore up Virgin, but could lead to the loss of some money-losing routes.
Alaska is buying Virgin for $2.6 billion. The combined airline will be the fifth largest in the US, with 1,200 daily departures with 280 planes with an average age of 8.5 years. The airline will have hubs in Seattle, San Francisco, Anchorage, Portland and Los Angeles.
The future of Virgin America’s employees in the Bay Area is uncertain at the moment, but the good news is that both carriers are considered great place to work-both rank among Forbes “best places to work.”
At SFO, Alaska Airlines is temporarily operating out of the International Terminal while Terminal 1 is under construction. It remains to be seen how or if Alaska’s flights will integrate with Virgin’s in Terminal 2. Alaska does not currently operate a Board Room at SFO– members instead use Cathay Pacific’s lounge on the A side of the international terminal.
The combined airline will be based in Seattle-– too bad because Virgin America was always very proud to boast that it was “the only California-based airline.”
Why did Virgin agree to be acquired in the first place? One its website it says, “Today, just four airlines control more than 80% of the U.S. market. By combining with Alaska – an airline that, like us, has a strong position on the West Coast, a history of operational excellence, and a guest- and employee-focused culture – we are not only creating the best airline in North America, but one with the size and market share necessary to compete in this consolidated environment.”
Read a blog post from Brad Tilden, Alaska Airlines’s CEO on the merger here. Also, here’s the press release announcing the merger.
Stay tuned to TravelSkills for more as this whole deal comes to light. In the meantime, let us know what you think about the merger in the comments below. For me, I’m a bit sad at the loss of my hometown carrier. It’s been a joy chronicling the scrappy, funky and fun carrier’s journey over the last eight years. Check out this video to see what I mean…
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