FlyerTalk Forums - View Single Post - RIP VX
Thread: RIP VX
View Single Post
Old Apr 6, 2016 | 2:41 am
  #100  
GrayAnderson
10 Countries Visited
20 Countries Visited
30 Countries Visited
10 Years on Site
 
Join Date: Jan 2014
Programs: Amtrak Guest Rewards (SE), Virgin America Elevate, Hyatt Gold Passport (Platinum), VIA Preference
Posts: 3,642
Originally Posted by Snowdevil
AS is in the business of attracting and retaining new customers, and that's done through great service and low fares. They're not about to turn a blind eye to the East Coast, where new growth opportunities await, especially when the transcons from LAX and SFO are the crown jewels of the VX system, with long stage lengths that bring CASM down in the process.

AS didn't buy VX so they could turn off the Boston/New York/Washington end of that business - that would be insane!
Considering that they just paid a nearly 60% premium (over the pre-merger price) to take over a company with a completely incompatible fleet of aircraft and a highly variant operating model, sanity may be in short supply.

As to Sir Richard's comments, I suspect:
(1) There was a value-added proposition in having a US Domestic arm of the Virgin Group's airlines (remember, VS/VA can't fly intra-US flights);
(2) He was probably hoping the airline would "cycle up" further (there are cases to be made both that AS overpaid for VX and that VX was undervalued on the stock market); and
(3) He's probably just not happy at someone buying out something he made for the expected purpose of wrecking it (which is a reasonable interpretation of this move in certain respects).
GrayAnderson is offline