Alaska nears $2B bid for Virgin America
#91
Suspended
Join Date: Mar 2014
Posts: 1,684
They still are, at least kind of although they are not at the bottom of the barrel like NK. If I had a choice, I wouldn't fly WN. People do because they usually offer lower prices and value. They are more at the same level as B6 which is why I said they are good match for each other.
There's definitely a cost element to it but they get a lot of different types who like their service.
#92
Join Date: Mar 2011
Programs: AA, UA, DL, AS, LH, BA, VS, HHonors, Hyatt, Club Carlson, IHG, Marriott
Posts: 833
AS is already strong on the West Coast and many believe that they can organically grow in all the markets VX has a presence for a fraction of the price of this merger and without all the complexities.
B6 and VX may have more synergies when combined than AS with VX. This deal, however, may be about keeping B6 out of the West Coast and AS territory than it is about VX. After the merger AS will be able to surpass B6 in traffic:
They will also be able to strengthen their market share in the West Coast while adding 2 hubs in SFO and LAX:
As for the VX aircraft, they are mostly leases, which I think they can either terminate at a cost or allow to expire. I think in the long run, they will probably continue to use aircraft from only one provider to minimize operational costs like WN does.
The DAL slots may be sold as they are likely unprofitable. B6 has been operating them at a loss in order to compete in price with AA which is one of AS main partners. AS may not want to antagonize AA or go in direct competition with them in DFW/DAL. Besides, it would be hard to compete with AA at one of their main hubs.
I actually read an article recently stating that AA stands to benefit a lot from this deal without incurring any risk as they will be able to access AS network in the West Coast and AK where they are weak:
An Alaska-Virgin America Deal Is A Big Win For American Airlines
Together AA and AS will control a combined market share greater than #2 DL. That is bad for DL and B6.
B6 and VX may have more synergies when combined than AS with VX. This deal, however, may be about keeping B6 out of the West Coast and AS territory than it is about VX. After the merger AS will be able to surpass B6 in traffic:
They will also be able to strengthen their market share in the West Coast while adding 2 hubs in SFO and LAX:
As for the VX aircraft, they are mostly leases, which I think they can either terminate at a cost or allow to expire. I think in the long run, they will probably continue to use aircraft from only one provider to minimize operational costs like WN does.
The DAL slots may be sold as they are likely unprofitable. B6 has been operating them at a loss in order to compete in price with AA which is one of AS main partners. AS may not want to antagonize AA or go in direct competition with them in DFW/DAL. Besides, it would be hard to compete with AA at one of their main hubs.
I actually read an article recently stating that AA stands to benefit a lot from this deal without incurring any risk as they will be able to access AS network in the West Coast and AK where they are weak:
An Alaska-Virgin America Deal Is A Big Win For American Airlines
Together AA and AS will control a combined market share greater than #2 DL. That is bad for DL and B6.
Last edited by MVF Trekker; Apr 3, 2016 at 5:12 pm
#93
Join Date: Mar 2011
Programs: AA, UA, DL, AS, LH, BA, VS, HHonors, Hyatt, Club Carlson, IHG, Marriott
Posts: 833
There's really odd cohorts that fly Southworst. I've heard conversations where some people like it because it has no business/first on the planes. They don't like the feelings that some people are economically better than they are. Some like the flexibility of the domestic awards which really is a big waste of money when you could fly anywhere.
There's definitely a cost element to it but they get a lot of different types who like their service.
There's definitely a cost element to it but they get a lot of different types who like their service.
Last edited by MVF Trekker; Apr 3, 2016 at 5:08 pm
#94
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Join Date: Jul 2003
Posts: 23,015
WN does have business class now but whenever people think of WN, they associate low cost and value. That's just how it is. WN has never tried to sell a premium product like the legacy airlines do. The way they operate including boarding is very cost-conscious like a low cost airline. Never flown business with them (why would I?) but I don't think you even you get a meal. I think you get a drink and that't it.
#95
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Join Date: Aug 2007
Location: SEA, but up and down the coast a lot
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Posts: 20,376
I think AS going to 11% share in LAX would be more annoying to AA (service that includes AA's big domestic moneymaker, premium service out of JFK, as well as ORD, FLL, BOS, IAD, DCA, Hawaii service) than a small two gate operation in DAL...
#96
Join Date: Apr 2009
Location: YYF/YLW
Programs: AA, DL, AS, VA, WS Silver
Posts: 5,950
The VX presence at DAL is going to be capped at two gates, even if AS takes it over. Not really competition for AA at DFW. But what it DOES do is keep a thorn in WN's side at DAL and keeps THEM from getting those two gates, which AA surely likes. Arguably if AS switched their SEA/PDX service there it's a win-win for AA; they could codeshare out of DAL if they wanted, and AS isn't doing a lot of connecting service out of DFW, it's all point-to-point for AS passengers (and AA could hoover up any DFW connections).
I think AS going to 11% share in LAX would be more annoying to AA (service that includes AA's big domestic moneymaker, premium service out of JFK, as well as ORD, FLL, BOS, IAD, DCA, Hawaii service) than a small two gate operation in DAL...
I think AS going to 11% share in LAX would be more annoying to AA (service that includes AA's big domestic moneymaker, premium service out of JFK, as well as ORD, FLL, BOS, IAD, DCA, Hawaii service) than a small two gate operation in DAL...
I agree that AS being a larger player at LAX and a competitor in the premium JFK-LAX/SFO transcon market (with the VX product, which customers already know and like) probably concerns AA more, but AA probably stands as much to gain from a partner that provides decent SFO service (not really challenging UA there, but at least keeping them honest) as they do to lose in Dallas and LAX.
#98
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#100
Join Date: Nov 2015
Location: YOW
Programs: AC 75K
Posts: 582
Interesting about the Alaska Virgin link. I'm hoping AS sticks with the straight 'Alaska' branding, which I imagine they'll do given the recent brand refresh and new livery? Is there any scenario where AS could become 'Alaska Virgin'?
#101
Join Date: Jul 2013
Location: SJC
Programs: Southwest, Alaska, United, American Airlines
Posts: 994
Yeah, I agree. My initial reaction was that AA wouldn't be wild about people flying DAL-LGA or ORD on AS and earning AA miles. However, someone will have those gates at DAL, and it won't be AA. AA'd rather it be a weak player like VX, but they'd probably prefer AS to WN or DL. And AS may not try as hard as VX to drive fares out of DAL down, assuming AS doesn't sell the gates.
I agree that AS being a larger player at LAX and a competitor in the premium JFK-LAX/SFO transcon market (with the VX product, which customers already know and like) probably concerns AA more, but AA probably stands as much to gain from a partner that provides decent SFO service (not really challenging UA there, but at least keeping them honest) as they do to lose in Dallas and LAX.
I agree that AS being a larger player at LAX and a competitor in the premium JFK-LAX/SFO transcon market (with the VX product, which customers already know and like) probably concerns AA more, but AA probably stands as much to gain from a partner that provides decent SFO service (not really challenging UA there, but at least keeping them honest) as they do to lose in Dallas and LAX.
#102
Join Date: Oct 2010
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#103
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Although I'd prefer to just keep it "Alaska", the "Virgin Alaska" name has a nice ring to it that I could live with....
#104
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Join Date: Aug 2008
Location: Usually in SAN or Central Europe.
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I agree that AS being a larger player at LAX and a competitor in the premium JFK-LAX/SFO transcon market (with the VX product, which customers already know and like) probably concerns AA more, but AA probably stands as much to gain from a partner that provides decent SFO service (not really challenging UA there, but at least keeping them honest) as they do to lose in Dallas and LAX.
Having a large operation set up at SEA/SFO/LAX (in addition to the operations at PDX and SAN) is somewhat duplicitous. And could lead to one station inadvertently "cannibalizing" from one (or more) of the other stations.
Last edited by Fanjet; Apr 3, 2016 at 8:40 pm
#105
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