# Alaska will fold Virgin America brand within two years



## CHamilton

Alaska will fold Virgin America brand within two years

http://www.seattletimes.com/business/alaska-will-fold-virgin-america-brand-within-two-years/


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## Rockymtnchris

That sucks. AARP travel usually books me by VA when I fly nonstop from DEN>SFO. I guess they'll end up putting me back on Frontier or United. I refuse to travel any of the airlines that require a stopover in PHX even if they are cheaper than a nonstop.


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## railiner

I see that Branson is upset...

I wonder how long before he finds someone else to take on the VIrgin America brand?


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## CHamilton

More specifics here.

http://www.geekwire.com/2017/alaska-airlines-killing-virgin-america-2019/


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## jis

The decision criteria for discontinuing the brand seems pretty clear. It is not worth 0.7% of the revenue, and the headache of keeping track of two brands and revenue streams and which flight is flying under what brand, and in addition artificially partitioning the fleet assets constraining operational flexibility. Like the crap the United was living with, even after they went to a single brand on day one, but because they were unable to conclude the negotiations to merge fleets and crew until recently.

Branson had no real control over the airline anyway. He was just peddling his brand, which some people care about, but apparently not enough of them.



railiner said:


> I see that Branson is upset...
> I wonder how long before he finds someone else to take on the VIrgin America brand?


Yup. He will have to find someone who has a business that will benefit enough from the brand to be able to cobble together the additional revenue to cover the franchising cost to use the brand. In airline business such luxury is becoming more and more rare these days.

Maybe he will decide to enter the railroad business instead. But again, he will have to find someone someone else who is willing to do foot the bill, since he appears to have no desire to make any big investment himself.


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## fairviewroad

Seems like a logical move to me, though I personally never found the VA name to be appealing or offering any particular cachet. Though there is something ironic about Alaska Airlines worrying about the confusion over having a brand-within-a-brand, considering that's more-or-less exactly what they've done for years with the Horizon name. You book Horizon tickets directly from Alaska, but Horizon offers different amenities and has a different vibe to it.

A few years ago, Alaska de-emphasized the Horizon brand, but even so, people in the Pacific NW still talk about taking the "Horizon shuttle" between SEA and PDX. Maybe that's why Alaska made their decision about VA...trying to avoid the dilution of the Alaska brand.


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## Devil's Advocate

American travelers have lost a lot of competition in the domestic airline market over the last several years. In my experience coach service levels have deteriorated to an all time low. At this point I rarely bother interacting with airline staff or making any requests as there is almost nothing they can do for you anymore. These days the bean counting computer holds all the cards and it doesn't seem to care if you had a pleasant flight or the worst traveling experience ever. VX didn't do much to reduce prices but they did help to increase expectations for the first time since I can remember. Which makes their buyout and dismantling unfortunate but not exactly unexpected.


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## jis

fairviewroad said:


> Seems like a logical move to me, though I personally never found the VA name to be appealing or offering any particular cachet. Though there is something ironic about Alaska Airlines worrying about the confusion over having a brand-within-a-brand, considering that's more-or-less exactly what they've done for years with the Horizon name. You book Horizon tickets directly from Alaska, but Horizon offers different amenities and has a different vibe to it.
> 
> A few years ago, Alaska de-emphasized the Horizon brand, but even so, people in the Pacific NW still talk about taking the "Horizon shuttle" between SEA and PDX. Maybe that's why Alaska made their decision about VA...trying to avoid the dilution of the Alaska brand.


The additional problem with keeping the Virgin brand was the additional accounting and fleet separation that they would have to maintain to artificially partition their "LD" network just to keep track of royalty payments to Branson. This is different from creating a sub brand for shuttle service, like Horizaon, though most airlines have backed away from such experiments in the recent past.


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## CHamilton

‘The Day the Music Died’? Billionaire Richard Branson mourns Virgin America

http://www.geekwire.com/2017/richard-branson-mourns-virgin-america/


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## saxman

It seems to me that Alaska is putting a lot of what VA did into some enhancements. In other words, I still think it'll be a good product.

https://thepointsguy.com/2017/03/the-end-of-virgin-america/

12 first class seats instead of 8 will be installed on the Airbus fleet. The 737's will get better seats, better wifi, expanded lounges among others. The big 3 have decided to take the West Coast by storm and this was Alaska's response. Just fly through LAX and you'll notice the taxi delays a lot more then just a couple years ago.


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## jis

LAX is not really a pleasant airport to fly through to start with.


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## Devil's Advocate

saxman said:


> It seems to me that Alaska is putting a lot of what VA did into some enhancements. In other words, I still think it'll be a good product. 12 first class seats instead of 8 will be installed on the Airbus fleet. The 737's will get better seats, better wifi, expanded lounges among others. The big 3 have decided to take the West Coast by storm and this was Alaska's response. Just fly through LAX and you'll notice the taxi delays a lot more then just a couple years ago.


It seems to me that we're in the future promises stage of the merger. Every merger sounds great at this stage. The new airline will only include the best of both worlds. Who could possibly find fault with that? I've flown a lot of airlines and been through a lot of mergers and in almost every single case the more restrictive and/or lower quality service standard prevailed in the end. I'm sure some of VX will make it into the combined AS product. However, if these perks weren't part of the core business plan they will not be considered integral in the future and will be removed/reversed/ignored in due time. Just like TW > AA's MRTC, NW > DL's TPAC liquor, and CO > UA's coach meals.


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## railiner

jis said:


> The decision criteria for discontinuing the brand seems pretty clear. It is not worth 0.7% of the revenue, and the headache of keeping track of two brands and revenue streams and which flight is flying under what brand, and in addition artificially partitioning the fleet assets constraining operational flexibility. Like the crap the United was living with, even after they went to a single brand on day one, but because they were unable to conclude the negotiations to merge fleets and crew until recently.
> 
> Branson had no real control over the airline anyway. He was just peddling his brand, which some people care about, but apparently not enough of them.
> 
> 
> 
> railiner said:
> 
> 
> 
> I see that Branson is upset...
> 
> I wonder how long before he finds someone else to take on the VIrgin America brand?
> 
> 
> 
> Yup. He will have to find someone who has a business that will benefit enough from the brand to be able to cobble together the additional revenue to cover the franchising cost to use the brand. In airline business such luxury is becoming more and more rare these days.
> 
> Maybe he will decide to enter the railroad business instead. But again, he will have to find someone someone else who is willing to do foot the bill, since he appears to have no desire to make any big investment himself.
Click to expand...

I believe, he would like to own Virgin America himself, if he could...but IIRC, current regulations prevent him from owning more than a 25% stake in a US domestic operation, and he could not be its CEO, either....


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## Texan Eagle

Rockymtnchris said:


> That sucks. AARP travel usually books me by VA when I fly nonstop from DEN>SFO. I guess they'll end up putting me back on Frontier or United. I refuse to travel any of the airlines that require a stopover in PHX even if they are cheaper than a nonstop.


Folding up Virgin America brand does not mean the route will disappear. In fact, one of the reasons Alaska acquired Virgin was to get access to a wider route network. You will still get the same DEN-SFO flight, just that it will be called "Alsaka Airlines Flight XXX" instead of "Virgin America Flight XXX"


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## CHamilton

Meanwhile, Branson brings Virgin Atlantic to Seattle.

Virgin Atlantic and its founder, Richard Branson, bring London buzz to Seattle


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## jis

CHamilton said:


> Meanwhile, Branson brings Virgin Atlantic to Seattle.
> 
> Virgin Atlantic and its founder, Richard Branson, bring London buzz to Seattle


That would be 49% Delta and 51% Branson as far as ownership goes these days.


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## CHamilton

Richard Branson has warm words for Seattle, cold criticism for Alaska Air

http://www.geekwire.com/2017/richard-branson-seattle-alaska-airlines/


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## railiner

Things are not always going To Branson's liking...

A few years ago he campaigned heavily against a BA-AA alliance ("BA+AA=No Way")...

But it happened anyway....


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## jis

I can understand why Branson might feel a bit miffed about his brand being dumped. I think he is even more miffed because Alaska doesn't see any value even though they have purchased the brand and locked it up in the US market for a while. I suspect they will do the minimal needed to hold onto it so that no one else can use it. It was a pure get rid of a competitor move together with getting an enhancement to their route structure. OTOH I also fully understand why Alaska did what it did.


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## Devil's Advocate

railiner said:


> Things are not always going To Branson's liking...A few years ago he campaigned heavily against a BA-AA alliance ("BA+AA=No Way")...But it happened anyway....


Prior to the open skies bilateral the BA+AA alliance required special government approval on both sides of the pond, mainly because it was blatantly anti-consumer and anti-competitive. As with the lopsided interference in the DFW vs DAL dispute only AA/BA loyalists and sympathizers genuinely supported it. To this day AA's sloppy soft product remains a sad joke and BA's premium services are hopelessly overpriced relative to competitors. Meanwhile VS' Upper Class service has gone from being an also-ran to a sleek and sexy trend setter. VS/UC remains a full fledged bucket list item for me while AA's and BA's products have fallen completely off my radar.


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## Long Train Runnin'

jis said:


> I can understand why Branson might feel a bit miffed about his brand being dumped. I think he is even more miffed because Alaska doesn't see any value even though they have purchased the brand and locked it up in the US market for a while. I suspect they will do the minimal needed to hold onto it so that no one else can use it. It was a pure get rid of a competitor move together with getting an enhancement to their route structure. OTOH I also fully understand why Alaska did what it did.


Seemed like they were afraid B6 wanted it, so they had to pay any price to avoid that.



Devil's Advocate said:


> railiner said:
> 
> 
> 
> Things are not always going To Branson's liking...A few years ago he campaigned heavily against a BA-AA alliance ("BA+AA=No Way")...But it happened anyway....
> 
> 
> 
> Prior to the open skies bilateral the BA+AA alliance required special government approval on both sides of the pond, mainly because it was blatantly anti-consumer and anti-competitive. As with the lopsided interference in the DFW vs DAL dispute only AA/BA loyalists and sympathizers genuinely supported it. To this day AA's sloppy soft product remains a sad joke and BA's premium services are hopelessly overpriced relative to competitors. Meanwhile VS' Upper Class service has gone from being an also-ran to a sleek and sexy trend setter. VS/UC remains a full fledged bucket list item for me while AA's and BA's products have fallen completely off my radar.
Click to expand...

Can't see your image, but AAs biz product JFK/LAX-LHR isn't that bad. The 777-300ER is a good product. I also am a big fan of the much less popular 767 refurb seats. I have spent around 10 nights in that seat and have gotten some of my best sleep in J in those seats. Soft product wise they can surprise you.A recent trip in J from MAN-JFK on the 767 even had duck on the menu I was shocked. Yeah I guess I can't get my haircut in the lounge preflight, but I don't think I would partake in that anyway.


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## Devil's Advocate

Long Train Runnin' said:


> Seemed like they were afraid B6 wanted it, so they had to pay any price to avoid that.


Even from a consumer advocacy standpoint I would have had little problem supporting a VX+B6 merger. Maybe what AS needed more than VX was an anti-dumping investigation into DL's SEA ops?



Devil's Advocate said:


> Can't see your image, but AAs biz product JFK/LAX-LHR isn't that bad. The 777-300ER is a good product. I also am a big fan of the much less popular 767 refurb seats. I have spent around 10 nights in that seat and have gotten some of my best sleep in J in those seats. Soft product wise they can surprise you.A recent trip in J from MAN-JFK on the 767 even had duck on the menu I was shocked. Yeah I guess I can't get my haircut in the lounge preflight, but I don't think I would partake in that anyway.


America West bought out US Airways which then bought out American Airlines. None of those airlines has surprised me in a positive sense since the mid-eighties. Many mainstream travel reviewers and bloggers no longer bother comparing the soft products of US airlines, presumably because they're so limited in scope and so inconsistent in delivery that there's simply not much point to it. Or maybe they're simply tired of being snapped and barked at for daring to photograph the interior of a US airline's cabin. As far as specific aircraft 767's and 777's don't really do anything for me at this point. In fact I've flown enough 777's over the years that I'm almost sick of them. In today's homogeneous airline market 777's are replacing nearly every widebody aircraft from the past three generations. It's sad to think we'll soon be limited to the B777, B787, A330, A380, and A350 for mainstream widebodies. The photo was intended to display a VS A346, which is an airline and aircraft I've never flown but would still like to experience before they're decommissioned to make way for the A351, hopefully in the premium cabin if possible.


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## Texan Eagle

Did Branson have a say in Virgin America takeover by Alaska? If he cared for the brand so much that he is "sad" now, why did he let the sale to happen? Why didn't he invest his own money and keep the Virgin America brand alive?

I am a fan of Branson and Alaska Air both, but in this case I'd say Branson is just being overly dramatic to get some media attention for his new flight.


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## jis

AFAICT he did not have a say.


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## Anderson

He had a say, but only insofar as he held a minority stake in the company and the hedge fund folks who backed the airline to begin with had more votes than he did.


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## jis

Anderson said:


> He had a say, but only insofar as he held a minority stake in the company and the hedge fund folks who backed the airline to begin with had more votes than he did.


Which is about as much say as anyone holding a minority stake does specially when the major stakeholders disagree with you. That is - close to zero.


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## CHamilton

> Branson, the British billionaire who helped create Virgin America, told reporters in Seattle this week that Alaska must pay royalties for the Virgin name under a licensing deal that runs until 2040....Alaska's general counsel said Wednesday that Branson was correct only about the length of the contract.
> 
> "What he didn't mention is there are lots of ways out of the contract," Kyle Levine said Wednesday. "No, we do not need to keep paying for a brand that we are not using."


http://www.seattlepi.com/business/article/Alaska-Airlines-Branson-clash-over-licensing-fees-11037209.php

Formerly All-Boeing Alaska Air To Keep Airbus Jets 'For The Foreseeable Future'

http://kuow.org/post/formerly-all-boeing-alaska-air-keep-airbus-jets-foreseeable-future



> Pedersen said most of the 68 Airbus jets in Virgin's fleet this year are on leases that run through at least 2021. He said Alaska Air will announce a decision by the end of this year whether to remain a mixed fleet operator long term or go back to an all-Boeing fleet....
> 
> On Wednesday, the combined airline's top brass added that it will standardize the First Class cabins resulting in plusher seats with more legroom than Alaska currently offers, but less space than Virgin's current First Class offering.
> 
> Alaska Air Group CEO Brad Tilden said his team evaluated whether to offer "lie-flat" seats on transcontinental flights to keep pace with larger competitors, but decided that was not worth it.


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## WoodyinNYC

CHamilton said:


> More specifics here.
> 
> http://www.geekwire.com/2017/alaska-airlines-killing-virgin-america-2019/


This jumped out from the solid GeekWire story:



> By June, Alaska first-class passengers will be able to pre-select meals before they fly, and by next year, main-cabin passengers will be able to pre-pay for meals.


Everything they can do, Amtrak can do, too? Ya think?


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## CHamilton

Alaska Airlines struggles to bring Virgin America on board

http://www.heraldnet.com/business/alaska-airlines-struggles-to-bring-virgin-america-on-board/


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