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-   -   Alaska nears $2B bid for Virgin America (https://www.flyertalk.com/forum/alaska-airlines-mileage-plan/1757016-alaska-nears-2b-bid-virgin-america.html)

jrkmsp Apr 2, 16 1:28 pm

Alaska nears $2B bid for Virgin America
 
Looks like Alaska may buy out Virgin America for $2 billion. It would beat out a rival offer from JetBlue.

Only way this makes sense to me is as a way to eliminate a competitor.

http://www.wsj.com/articles/alaska-a...ica-1459620895

jerry a. laska Apr 2, 16 1:33 pm

Being discussed in detail here:
http://www.flyertalk.com/forum/alask...n-america.html

jrkmsp Apr 2, 16 1:44 pm


Originally Posted by jerry a. laska (Post 26426144)

Right. I guess it seemed this was a sufficiently distinct development. Maybe mods think differently.

PDXPremier Apr 2, 16 1:47 pm


Originally Posted by jrkmsp (Post 26426177)
Right. I guess it seemed this was a sufficiently distinct development. Maybe mods think differently.

I think I tend to agree with you on this one....this is a significant development that was just published today, although it's too bad only the headline and first sentence are available for not WSJ subscribers. Sounds like this might be close to becoming a done deal...

jerry a. laska Apr 2, 16 1:52 pm


Originally Posted by jrkmsp (Post 26426177)
Right. I guess it seemed this was a sufficiently distinct development. Maybe mods think differently.

While the detailed report of the deal might be somewhat new, but speculation about whether the deal make sense has been discussed extensively in that thread.

Only way this makes sense to me is as a way to eliminate a competitor.

jinglish Apr 2, 16 2:25 pm


Originally Posted by PDXPremier (Post 26426187)
it's too bad only the headline and first sentence are available for not WSJ subscribers

Paste the headline into Google. ^

airplanegod Apr 2, 16 2:59 pm

Hopefully not going to happen, it would be like the UA and CO merger all over again, Alaska and Virgin America do not match.

vxflyer Apr 2, 16 3:26 pm


Originally Posted by airplanegod (Post 26426407)
Hopefully not going to happen, it would be like the UA and CO merger all over again, Alaska and Virgin America do not match.

That's b/c VX is the best airline this country has ever seen, and CRAPLASKA is garbage.

jinglish Apr 2, 16 3:31 pm


Originally Posted by vxflyer (Post 26426512)
That's b/c VX is the best airline this country has ever seen, and CRAPLASKA is garbage.

The really notable thing about FlyerTalk for me is that, despite being only a couple of years out of college, I feel like one of the more mature members here.

Would you honestly rather fly NK than AS?

flytoeat Apr 2, 16 3:43 pm


Originally Posted by vxflyer (Post 26426512)
That's b/c VX is the best airline this country has ever seen, and CRAPLASKA is garbage.

Unless, of course, you're a shareholder. The only thing that kept VX out of bankruptcy was the plunge in fuel prices. VX shareholders are on their knees, praying this happens.

airplanegod Apr 2, 16 3:47 pm


Originally Posted by jinglish (Post 26426537)
The really notable thing about FlyerTalk for me is that, despite being only a couple of years out of college, I feel like one of the more mature members here.

Would you honestly rather fly NK than AS?


Originally Posted by flytoeat (Post 26426584)
Unless, of course, you're a shareholder. The only thing that kept VX out of bankruptcy was the plunge in fuel prices. VX shareholders are on their knees, praying this happens.

Not all about the money either, they have to be a correct match. VX and AS do not match in any way, shape, or form. B6 and VX are a much better match. I honestly do not believe AS "is nearing" a successful bid of VX.

PDXPremier Apr 2, 16 3:49 pm


Originally Posted by jinglish (Post 26426537)
The really notable thing about FlyerTalk for me is that, despite being only a couple of years out of college, I feel like one of the more mature members here.

Would you honestly rather fly NK than AS?

Good come back to an unusually harsh comment we don't (thankfully) see here in the AS forum too often. With that said, where did the NK reference come from in the post you were referencing??

3ur0tr45h Apr 2, 16 4:02 pm

Article:

Alaska Air Group Inc. has emerged as the likely winner of an auction for Virgin America Inc., people familiar with the matter said.

The company is nearing a deal to buy Virgin America after beating a rival bid by JetBlue Airways Corp., the people said.

From http://www.wsj.com/articles/alaska-a...ica-1459620895

SJC ORD LDR Apr 2, 16 4:05 pm

It would be a really interesting pairing. AS has done a great job carving out a niche in SEA, the state of Alaska, and to a lesser extent PDX along with some decent operations out of SAN, LAX, and SJC. AS also will fly point to point routes on which they can make a buck or two. To my knowledge, VX has never flown a route that is not flown by a legacy carrier. Their business plan has been that people will fly us because we are better (not cheaper or more convenient or any other reason most people choose an airline). Plus, VX mostly flies leased Airbuses (I think they own 7 of them) while AS is proudly all Boeing (though they used to have Douglas/MD planes).

It would be interesting to see what happens with the combined carrier. Does AS shrink SJC and put more eggs into the SFO cart (or vice versa)? Does AS keep the Airbuses? How will VX react to the less "hip" culture of AS? Again, very interesting.

SamuelS Apr 2, 16 4:19 pm


Originally Posted by vxflyer (Post 26426512)
That's b/c VX is the best airline this country has ever seen, and CRAPLASKA is garbage.

One could argue that any start up airline could choose to be a great airline, providing an awesome product - but at a cost vs revenue level that haemorrhages money and leads to steady losses.

Fortunately for VX - pretty much every carrier is able to make money right now with fuel pricing where it is today.

To say that Alaska is a garbage carrier however is a stretch. They consistently rank among the top large carriers in the US in everything from DOT on time performance to customer complaint handling, have a robust frequent flyer program, and a largely loyal customer following. My interactions with Alaska as an MVPG the last four years have almost uniformly been a positive experience, with a number of "above and beyond" resolutions to any issues I've encountered.

Second, AS has a significant short-haul network. VX - at it's inception - made longhaul domestic travel a key focus of their business plan and needed to have a product - particularly in the front end - that could stand up to the upgraded premium cabin offerings of network carriers. The LA/SF - NYC routes in particular are a fiercely contested market and require a very different hard and soft product to gain any serious traction with a premium high revenue customer base.

Are they two very different airlines serving very different markets and customer bases? Yes. Does that mean Alaska is "crap"? No.

Will it thus make for interesting speculation of how the airlines might be able to merge? Absolutely!


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