VX/AS Integration Speculation
Apr 9, 2016, 1:50 am
#1
Moderator: Manufactured Spending
Original Poster
Join Date: Jul 2011
Posts: 6,584
VX/AS Integration Speculation
This is premature, and entirely speculative, but I think it would still be fun to discuss.
Assuming the deal goes through, how should management go about integrating these carriers?
I'm going to go out on a limb and say they should keep the Virgin America name. It has some catchet, while Alaska is just a smaller AA or DL to most people. Besides, it makes no sense for a nationwide carrier to be named after one out-of-the-way state.
There is precedent for this. When America West acquired US Airways, they took the US Airways name. Perhaps they can use the Alaska Airlines brand for in-state flights within Alaska. Or maybe call them Virgin Alaska.
With regards to fleet, since VX has a small number of airplanes which are similar in size to the 737s, they should probably standardize to Boeing.
Since this is not a merger of equals, it probably makes sense to do a WN/FL style merger where assets are slowly transferred over until the brand disappears, rather than a UA/CO style megamerger where systems switch over on a particular day.
Thoughts?
Assuming the deal goes through, how should management go about integrating these carriers?
I'm going to go out on a limb and say they should keep the Virgin America name. It has some catchet, while Alaska is just a smaller AA or DL to most people. Besides, it makes no sense for a nationwide carrier to be named after one out-of-the-way state.
There is precedent for this. When America West acquired US Airways, they took the US Airways name. Perhaps they can use the Alaska Airlines brand for in-state flights within Alaska. Or maybe call them Virgin Alaska.
With regards to fleet, since VX has a small number of airplanes which are similar in size to the 737s, they should probably standardize to Boeing.
Since this is not a merger of equals, it probably makes sense to do a WN/FL style merger where assets are slowly transferred over until the brand disappears, rather than a UA/CO style megamerger where systems switch over on a particular day.
Thoughts?
Apr 9, 2016, 3:51 am
#2
Join Date: May 2011
Posts: 5,814
FYI -- They already said that the new airline would be called Alaska Airlines (under Alaska Air Group) with the Mileage Plan being the survivor of the FFP. They could change their minds of course but that's what they posted on their merger site and publically stated. (Probably to avoid the 0.7% rev fee to the Virgin group).
That much we know.
That much we know.
Apr 9, 2016, 6:05 am
#3
Join Date: Apr 2003
Programs: B6 Mosaic, Bonvoy LT Titanium (x SPG LT), IHG Spire, UA Silver
Posts: 5,853
This is not a merger of equals. It was simply a hostile takeover with a big payout. Imagine somebody breaking into your house and demanding you turn it over to them. Then in a strange twist the burglar gives you twice as much money as the house is worth. A pleasant surprise for sure but once you take the cash, the house belongs to somebody else. AS has 100% control. At this point, sadly there is no negotiation about keeping the VX name or anything else from VX. It is all up to Alaska.
Once you sell the house, you can give decoration advice but frankly the new owner can simply say thanks and do whatever s/he wants. It is no longer yours.
Once you sell the house, you can give decoration advice but frankly the new owner can simply say thanks and do whatever s/he wants. It is no longer yours.
Apr 9, 2016, 10:21 am
#5
Join Date: Aug 2006
Location: SJC
Programs: DL PM MM, Marriott Titanium
Posts: 3,276
This is not a merger of equals. It was simply a hostile takeover with a big payout. Imagine somebody breaking into your house and demanding you turn it over to them. Then in a strange twist the burglar gives you twice as much money as the house is worth. A pleasant surprise for sure but once you take the cash, the house belongs to somebody else. AS has 100% control. At this point, sadly there is no negotiation about keeping the VX name or anything else from VX. It is all up to Alaska.
Once you sell the house, you can give decoration advice but frankly the new owner can simply say thanks and do whatever s/he wants. It is no longer yours.
Once you sell the house, you can give decoration advice but frankly the new owner can simply say thanks and do whatever s/he wants. It is no longer yours.
Apr 9, 2016, 10:24 am
#6
Join Date: Aug 2012
Posts: 6,752
Well, unlike the East Coast (not even sure if they know Alaska is the 49th State), most travelers in the West Coast are both extremely familiar and comfortable with the Alaska Airlines branding.
I flew VX more for their product, and not for the "Virgin" thing. I really don't care about branding. If AS (or any carrier) offers a better product than UA/B6/DL/AA from SFO, they get my business.
I just want to see robust competition where all consumers will benefit.
I flew VX more for their product, and not for the "Virgin" thing. I really don't care about branding. If AS (or any carrier) offers a better product than UA/B6/DL/AA from SFO, they get my business.
I just want to see robust competition where all consumers will benefit.
Last edited by Visconti; Apr 9, 2016 at 10:27 am Reason: see, even I thought Alaska was the last State to join the Union! LOL
Apr 9, 2016, 10:49 am
#7
Join Date: Jan 2014
Programs: Amtrak Guest Rewards (SE), Virgin America Elevate, Hyatt Gold Passport (Platinum), VIA Preference
Posts: 3,145
The product is the question, of course. AS has a mixed-bag F product (though they're improving it in like with adding a premium economy section...IIRC their old F seating product was too close to their new Y+ product) while VX blows everyone else out of the water.
If they keep an F product in line with VX for their longer-haul flights I'll be game with that (and I suspect they'll do something like that since otherwise they're going to get blown out on the premium cabin side on the LAX/SFO-NYC routes). If it's their present/old product I'm not game with that...
...but regardless, I don't see myself chasing status with them. The present map just doesn't work for that for me (they're still west coast-based and mileage-oriented...and I cannot see traveling 40k/yr with them or 50k/yr with them+DL). In an ideal world they'll expand their cross-honoring with DL to include VS and I'll be able to leverage VS status along those lines.
By the way, I was talking with bayhouse and another friend...and I think there's a good case for them to keep a split fleet even if they rejigger the makeup of the fleet: 40 inbound planes already ordered and in the roster is nothing to sneeze at, and there's been enough speculation about a B6/AS/VX tie-up that I could see that as part of the long-term plan (even if B6/AS would likely be a straight merger instead of a takeover).
If they keep an F product in line with VX for their longer-haul flights I'll be game with that (and I suspect they'll do something like that since otherwise they're going to get blown out on the premium cabin side on the LAX/SFO-NYC routes). If it's their present/old product I'm not game with that...
...but regardless, I don't see myself chasing status with them. The present map just doesn't work for that for me (they're still west coast-based and mileage-oriented...and I cannot see traveling 40k/yr with them or 50k/yr with them+DL). In an ideal world they'll expand their cross-honoring with DL to include VS and I'll be able to leverage VS status along those lines.
By the way, I was talking with bayhouse and another friend...and I think there's a good case for them to keep a split fleet even if they rejigger the makeup of the fleet: 40 inbound planes already ordered and in the roster is nothing to sneeze at, and there's been enough speculation about a B6/AS/VX tie-up that I could see that as part of the long-term plan (even if B6/AS would likely be a straight merger instead of a takeover).
Apr 16, 2016, 6:28 am
#9
Join Date: Mar 2013
Location: SEA
Posts: 3,961
I'm an east coaster who flies AS reasonably frequently. I think these are two airlines that do a lot of things well, so integration will be interesting in terms of what stays, what gets better, what gets worse. I fly AS because their service is consistently above the legacies and I'm hoping they take on some of what VX does well.
Apr 16, 2016, 11:50 pm
#10
FlyerTalk Evangelist
Join Date: May 2008
Location: San Francisco
Programs: GM on VX, UA, AA, HA, AS, SY; Budget Fastbreak
Posts: 27,755
Regarding fleet, is It possible to ditch the Airbus planes? When do the leases expire? Is it easy or logical to keep them despite AS having only Boeing?
I think VX is a great name and brand, with little negativity compared to US and CO names. It seems a shame to lose the name. Plus Virgin overall is a great brand name for entertainment and Virgin Atlantic.
I still assume that VX F product will have cheaper snacks with less Dean & Deluca branding.
I think VX is a great name and brand, with little negativity compared to US and CO names. It seems a shame to lose the name. Plus Virgin overall is a great brand name for entertainment and Virgin Atlantic.
I still assume that VX F product will have cheaper snacks with less Dean & Deluca branding.
Apr 17, 2016, 8:29 am
#11
Join Date: Mar 2013
Location: SEA
Posts: 3,961
Regarding fleet, is It possible to ditch the Airbus planes? When do the leases expire? Is it easy or logical to keep them despite AS having only Boeing?
I think VX is a great name and brand, with little negativity compared to US and CO names. It seems a shame to lose the name. Plus Virgin overall is a great brand name for entertainment and Virgin Atlantic.
I still assume that VX F product will have cheaper snacks with less Dean & Deluca branding.
I think VX is a great name and brand, with little negativity compared to US and CO names. It seems a shame to lose the name. Plus Virgin overall is a great brand name for entertainment and Virgin Atlantic.
I still assume that VX F product will have cheaper snacks with less Dean & Deluca branding.