An Insight into Alaska Airlines’ Mindset Going Forward with Virgin America Merger

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 A Guest Post by John @laptoptravel

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The Merger is Expected to Be Completed in 2018

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I am very excited, as so many are, and intrigued by the merger between Alaska Airlines and Virgin America. For myself, as an MVP 75K member, it opens up new opportunities, increased capacity and more choices (especially along the West Coast.)

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First Class breakfast aboard Alaska’s B737-800 (enroute between SEA & LAX)

Alaska has a team dedicated to the transition and we are anxious to hear exactly how they plan to integrate Virgin’s fleet and operational uniqueness into the Alaska system. There is a lot of speculation of what Alaska will or won’t do when it comes to absorbing Virgin America’s ‘hip peculiarities’; Boeing versus Airbus, Hip versus Conservative, Routes, Interiors, Perks and an endless myriad of policies.  How will they do it?  What are they thinking?

Thankfully, this week, we got another peek into the mindset of Alaska regarding some of those issues. Here are some highlights from a recent presentation by Scott Habberstad, Director of Sales and Community Marketing for Alaska Airlines.

A recent report by KRBD, a Ketchikan, Alaska radio station and news organization, offers some insights into Alaska Airlines’ thinking going forward with the Virgin American merger. Habberstad stated that the airline sees no reason why the merger would not get approved by the government. He also addresses the culture of Virgin America and how that might translate, in some form, through to Alaska Airlines’ operations:

“Virgin is different. It’s an experience. You board listening to Beyoncé,” he said. “It’s got purple mood lighting in the airplanes. It’s a different experience, but it’s a good experience. It’s fresher, it’s new. While I don’t think you’ll board to Beyoncé on us in the future, there might be a little bit of an uptick: A little fresher brand coming from us.”

He also said that Alaska will ‘try out’ the Airbus aircraft which are currently mostly leased on Virgin’s fleet.

Habberstad also mentioned Alaska Airlines’ relationship with Delta. He said “Delta is a good partner and a good competitor.” He also remarked that in spite of the fierce competition with Delta in the Seattle market that the Virgin America merger will allow Alaska to strengthen that position.

 

Synergy RouteMap Alaska Airlines Virgin America Merger

Current Map of Both Airlines’ Routes

I take that statement (about Delta being a good partner) with a grain of salt.  Surely, with a written partnership agreement between the two airlines negative statements are going to come forth with minimal frequency.  The two airlines still work together and Alaska even offers bonus EQM’s for its Alaska frequent flyer program, MileagePlan for members who fly Delta’s premium fares and credit them back to their Alaska account.

Habberstad added that the company will be concentrating on expanding its international partnerships in the future as well.

This is an absolute necessity; since Alaska’s international reach is limited to Canada, Costa Rica and Mexico. As the SeaTac (Seattle/Tacoma) Airport continues with its new international terminal it’s in Alaska’s best interest to get some ancillary revenue through that with increased international flights and partnerships.  After all, Alaska is going to pay its share for that terminal, based on passenger traffic whether they like it or not; a fact that Delta will surely reap the benefits of as it ramps up its Seattle hub for future international destinations and increased routes.  Delta’s goal is to increase its flights five-fold over summer of 2014’s traffic.

Alaska has a lot on their plate, and as oil prices (and jet fuel costs) rise, the costs of the merger, paying for the new SeaTac international terminal and competition with Delta make its burden heavy-laden, so no missteps can be afforded.

What do you think of the Alaska/Virgin merger?  Do you think this will help Alaska in their battle with their ‘frenemy’ Delta Air Lines? Have Fun ‘Up there!’ – John @ laptoptravel

 

 

5 comments

  1. As a 75K since it’s inception and within reach of 1mm on AS I too look forward to the merger hoping AS does blend some of Virgin’s great service, particularly it FA’s and food offerings. I issue is having switched to AS in 2004 I am noticing a slight drop in service and planes are not as clean as once were. Their Boardrooms are old, dated and too small to handle their growth.

    San Diego is a great point there is the old Red Carpet room sitting there and AS refuses to use it, yet the traffic continues to grow to the point where there is no room when the flights are full.

    But AS is still better than DL

  2. I really really like Alaska but my chances to use them out of MCI are limited. My chances to fly Virgin are even less. Maybe if they could set down some of those Red and White planes in the middle of flyover country for a few minutes as they go back and forth between NYC and California I would be able to fly them more often. I want to like Virgin but they are hard to come by in the Middle of the country.

    I think this helps with Delta but it seems that they want to start a war with Southwest for California. I think that’s a dumb move personally.

  3. What will happen with the split operations in the Dallas area? AS flies to/from DFW – VX flies to/from DAL. Which airport will they choose? If AS moves the VX flights back to DFW – will “arch nemesis” DL get their gates back at DAL ? Oh my what to do here !!

  4. @JH-

    Excellent point, and I hope to address this issue as we know more later in the year.

    @Ghostrider5408-

    I agree with your point on the lounges; Alaska needs to step it up. Alaska will inherit four great ones (LAX, SFO, IAD & JFK) so let’s hope they do that right and also if they have that greater presence in California do something with the SAN Airport.

    @DaninMCI –

    I don’t see much hope here in the short-term for midwest route growth. Alaska’s plate is more than full, so it will be 2020 before I think we’ll see them looking to increase any presence there…They have their hands full with all the TRANSCON traffic they will be absorbing.

    Regardless, this is going to be a huge challenge for Southwest Airlines. Since so much of Alaska’s focus is within the western United States, where it competes with Southwest both directly and indirectly.

    At Love Field, Alaska stands to take control of the two gates currently controlled by Virgin America; a valuable asset at an airport whose size is capped at 20 gates. Talk about a bidding war if they decide to divest! If they keep the gates at Love, then perhaps an MCI connection might be in the future @DaninMCI. Currently, Southwest has four nonstops daily between DAL & MCI.

  5. Why is Alaska blacklisting Beyoncé and probably other music by similar artists? I’m really disappointed with a statement like that. At best, it smacks of very narrow minded thinking, and some could see a more sinister inference. Maybe Beyoncé evokes a negative image for Alaska and the passengers it is used to in Alaska and the PacNW. But Beyoncé is raking in all that money because her music is popular with a large segment of the country.

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