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Alaska Air Group to Acquire Virgin America [Discussion from April 4, 2016]

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Old Apr 4, 16, 12:43 pm
  #46
 
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Originally Posted by eponymous_coward View Post
Oh, trust me, I notice. My daughter flew AS in F with me down to SFO, VX Y back. Asked her which she liked better. VX, slam dunk. And I rather like them too; their route network out of SEA is impossible for me to use (and too pricey compared to AS), though.
Odd, I'd always prefer F to Y. Never a question. The things I didn't like about VX were the lack of F upgrades that all the legacies and AS give out, their lacking route network, and their safety video.
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Old Apr 4, 16, 12:45 pm
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Old Apr 4, 16, 12:47 pm
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Originally Posted by woodford02A View Post
Lots of questions and few answers so far on the following items:

-How does AS compete in product-rich transcons full of established players with much deeper pockets and market tenure (ie. DL).

-Does the VX brand continue on the Airbus flying? Sounds like it won't but I cannot imagine the Alaska brand being a good for for NY-LA, NY-SF, NY-Florida flying

-How does AS convert VX loyalists who love the on-board experience and brand who will risk being forced to fly a more basic product?
AS is partners with DL and AA. As serves mostly west coast, Alaska and Hawaii locations.

Delta has recently increased its load in Seattle thinking maybe it will take out Alaska but instead its seems to have taken out the non-Alaska carriers

I am sure AS will adopt some things VX has done that is well liked by their PAX loyalists


Originally Posted by sfozrhfco View Post
Completely agree. Being isolated in the PWN, AS may look great but in the rest of the world there is very little special about AS and I would never even think of connecting in SEA/PDX to go pretty much anywhere except Vancouver from SFO--and even then I would rather endure AC/UA non-stop rather than wasting time connecting.

Alaska is more than just SEA/PDX With them getting SFO its likely another hub is created

As true with any carrier and their routing PAX will question the routing. There are times I have flown between NE/GL cities on Delta/AA and had to fly through ATL/CLT. Same argument holds there.


The DCA/LGA within perimeter slots would be best sold to a competitor as neither AS nor VX have any strength at all within the Eastern half of the US. This may help AS get a little of their overpayment back but also strengthens their competitors who already have a more diversified network. Offering a mediocre product in SFO non-stop to a few destinations and then having to connect in SEA for the rest makes WN/UA and even DL/AA a lot more compelling. If you are not going to get anything special, you may as well at least gain access to a decent network. AS also just can not compete against B6's Mint product either--on price point, food, inflight entertainment or service. Without Red, good quality food, and the better seat which VX provides, they are in an even weaker position in premium transcon markets.


The only way the slot is sold if DOT requires it. AS is a west coast airline so the slots matter to them more than DL or AA or someone else

AA would never dispute AS getting the slot.


Seems AS's management has acted out of fear rather than rationality and ended up paying a ton of money which benefited all of those of us that had VX stock and sold out today, but they better think quickly about how they are going to start to pay down the huge debt they are going to be incurring. Offering the AS cabin experience and a still weak network to most of the world is just not going to be a money making proposition and will drain resources from their fight against DL in SEA.

Its actually quite rational. Its blocking B6 from getting more traction on the west coast. B6 has been more at expanding on the east coast, but not so much on the west coast

On the west coast from SEA its been mostly going to LGB or connecting there, and B6 has an ANC route

same argument on routes apply to B5 from SEA---why travel SEA-LGB-east when I could travel SEA-ORD-east.



The economies in SEA/PDX/SFO are doing great now but as many of us seen, tech goes through booms and busts just like the airlines and having all of AS's eggs in the West may very well prove to be a very big mistake. It took VX nearly its whole existence to start making money and that came during a crash in oil prices. Things won't be too pretty when the next bust comes and the "diversification" to add yet another West Coast hub may not seem too smart. They could have used their cash to invest in Apple a few months again and had a very large cushion rather than flush money down the drain.

AS is a western airline. Their eggs are just fine.

California does gain a tax windfall though for the huge gains made in the short 17 months since the IPO. Small consolation prize.
see comments above
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Old Apr 4, 16, 12:50 pm
  #49
 
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Originally Posted by chrisremo View Post
As an AA elite based in SFO who ended up flying Alaska every week for almost a year, this feels like the best possible outcome for me. A strong AA partner who I have always greatly enjoyed flying will gain an SFO hub. Plus finally I'll have an SFO-SAN nonstop I can credit to AA.

I could even see myself switching programs from AA to AS depending on how this all goes.
I'm in a similar boat. The acquisition fills the bay area hole in AS' network. I will finally be able fly a BOS-SFO nonstop and credit it to Mileage Plan.

The question is, how many people are in a similar situation and see the network expansion as a beneficial thing? Many loyal VX flyers see this as a negative, with the assumption that the AS experience won't be as good as VX. But to get similar coverage, they will have to choose between UA and AS...

Now, how do I convince AS to buy SY - then I can do BOS-MSP nonstop, and I'll never have a reason to fly DL again?
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Old Apr 4, 16, 12:51 pm
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Originally Posted by chrisremo View Post
As an AA elite based in SFO who ended up flying Alaska every week for almost a year, this feels like the best possible outcome for me. A strong AA partner who I have always greatly enjoyed flying will gain an SFO hub. Plus finally I'll have an SFO-SAN nonstop I can credit to AA.

I could even see myself switching programs from AA to AS depending on how this all goes.
Originally Posted by makfan View Post
I was having similar thoughts about that. I have lifetime PLT and usually hit EXP. Surely I could switch enough AA flying over to make whatever AS top tier comes out of all this as I wouldn't have to go out of my way now.
I know that we add up to just a few data points, but add me to the list of AA flyers who could be flying AS more as a result of this deal. And I can even see switching programs if AS continues to distinguish its FF program by not going revenue-based.

I'm somewhat persuaded by all of the very good points that have been made here, doubting the wisdom of this deal. Still, I wonder whether (and hope that) AS management has some method to its apparent madness in terms of avoiding marginalization that might have resulted from a JetBlue-Virgin merger; intelligent use of the Virgin planes for appropriate markets, so as to retain existing Virgin loyalists and expand the combined airline's appeal; and distinguishing itself in other ways (not least the aforementioned FF program).

I'd emphasize that last point a bit. There are respects in which the Big Three are going steadily downhill in not just their FF programs but other aspects of their service and operations, due to reduced competition. Perhaps AS management sees ways of capitalizing on that via an expanded airline that retains the appeal of both Alaska and Virgin? It need not even improve in this market; it simply needs to retain existing strengths as competitors race to the bottom in several respects.
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Old Apr 4, 16, 12:53 pm
  #51
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Originally Posted by SJC ORD LDR View Post
Odd, I'd always prefer F to Y. Never a question.
You probably aren't a teenaged girl who liked the in-seat video and the general "Star Trek" feel of a VX cabin.

Personally, I'm fairly indifferent to F vs. Y on ~2-3 hour flights or less, as long as it's not knee-crunching NK pitch or something horrible. (Not surprisingly, I'm willing to fly airlines like VX or WN where you won't be getting free upgrades.) Mediocre booze and a snack? Meh. That's like $10-20 outside the plane. Quite often when I get someplace and how much I paid to get there are far more important. The bigger seat's nice but not essential if Y isn't horrible.
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Old Apr 4, 16, 12:56 pm
  #52
 
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Originally Posted by SJC ORD LDR View Post
Odd, I'd always prefer F to Y. Never a question. The things I didn't like about VX were the lack of F upgrades that all the legacies and AS give out, their lacking route network, and their safety video.
After reading your post I looked up the safety video - I thought it was terrific!
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Old Apr 4, 16, 1:03 pm
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As a millennial, I feel obligated to fly Virgin America before the merger is complete. I've never flown it!

I'm more bummed about the potential for AS to keep and use the airbuses-- there is something really nice about having an all boeing fleet and being a Seattle company. Yes, I know it's called marketing but it works.
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Old Apr 4, 16, 1:04 pm
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Old Apr 4, 16, 1:07 pm
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Originally Posted by eponymous_coward View Post
You probably aren't a teenaged girl who liked the in-seat video and the general "Star Trek" feel of a VX cabin.

Personally, I'm fairly indifferent to F vs. Y on ~2-3 hour flights or less, as long as it's not knee-crunching NK pitch or something horrible. (Not surprisingly, I'm willing to fly airlines like VX or WN where you won't be getting free upgrades.) Mediocre booze and a snack? Meh. That's like $10-20 outside the plane. Quite often when I get someplace and how much I paid to get there are far more important. The bigger seat's nice but not essential if Y isn't horrible.
I wouldn't pay for F on a 2-3 hour flight, but I'll gladly take the upgrade. The mood lighting and seatback TVs don't really do much for me on a short flight.

Originally Posted by airplanegod View Post
Hopefully regulators will force the "New AS" to keep the former VX transcon routes?

Also, will VX's planes be ripped of the PTV's/mood lighting, or will AS's planes get PTV's?
The regulators can't force AS to keep anything. If AS finds out those routes are losing a ton of money, they'll be gone.

Most of AS's flights are short enough where the PTV doesn't mean a thing. Also, AS is getting the Boeing Sky interior, which is kind of like mood lighting.

Originally Posted by wakeboarderjeff View Post
After reading your post I looked up the safety video - I thought it was terrific!
Too each their own, I found the music annoying and it felt like it dragged on too long. I prefer the DL humor videos over the VX video. It's just personal taste.
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Old Apr 4, 16, 1:11 pm
  #56
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Originally Posted by berliner5000 View Post
As a millennial, I feel obligated to fly Virgin America before the merger is complete. I've never flown it!

I'm more bummed about the potential for AS to keep and use the airbuses-- there is something really nice about having an all boeing fleet and being a Seattle company. Yes, I know it's called marketing but it works.
In economy class, Virgin merely has purple ceiling lighting and a safety announcement sung in rap, which I think makes a confusing safety announcement. Not only is it in rap, but the props doesn't even look like an inside of a plane. Someone should complain to the FAA.

As far as an all Boeing fleet, I sometimes like to be a passenger on odd variants. I hope to sometime be aboard a 737-600 (Westjet???), A318 (Air France???). I have been on a 737-900, which is not very common. 737-900ER are common, but not the 737-900. Alaska has them. You can detect them if they don't have a side door plug near, but not at the back, something that 737-900ER's have.
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Old Apr 4, 16, 1:12 pm
  #57
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Originally Posted by airplanegod View Post
Also, will VX's planes be ripped of the PTV's/mood lighting, or will AS's planes get PTV's?
That answer is years away. UA still has sCO DTV planes, and planes with no IFE and planes with some IFE it's a mess.

If I had to bet it would be that part of the AS re-vamp of branding and F (which was previously announced) will be our first look at a blended product. Honestly I don't care about TV those VX F seats are sweet. Let's keep those.
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Old Apr 4, 16, 1:17 pm
  #58
 
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Originally Posted by airplanegod View Post
Also, will VX's planes be ripped of the PTV's/mood lighting, or will AS's planes get PTV's?
Can someone please tell me what the allure to VX's PTVs are? I've flown VX several times all over the country and found the things to be very meh. Usually the PTV just sits on AirShow or whatever they call the map.

A small TV on a plane seems unnecessary when I've got a 55" LED TV sitting in my living room that has access to practically every movie ever made.

Originally Posted by wakeboarderjeff View Post
After reading your post I looked up the safety video - I thought it was terrific!
It's fantastic...the first time. There was a period of time I flew VX every week for a month. The video got very old, very fast, especially at 6am.

Originally Posted by berliner5000 View Post
I'm more bummed about the potential for AS to keep and use the airbuses-- there is something really nice about having an all boeing fleet and being a Seattle company. Yes, I know it's called marketing but it works.
WN said the same thing about the 717s. They went away very fast. I wouldn't be surprised to see the A320s go away either.
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Old Apr 4, 16, 1:18 pm
  #59
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Originally Posted by channa View Post
This could get very ugly very quickly if AS doesn't do some serious introspection and understand its competitive position with its product now that they've decided to play ball in SFO and LAX. The customer mindset in SFO and LAX cannot be any further than the SEA mindset that AS is accustomed to.
I'm sure they are well aware of this. I have a lot of confidence that management knows exactly what's on the plate. What they do with it is another story. I've made several visits to the Board Room (as opposed to the airport Bored Rooms) and, as a customer, spent a fair amount of time with the execs while I served on the Gold Advisory Board. As one of the rarer Bay Area board members, I know I raised, more than once, the VX service standard and in an "all things equal" world, VX would get my business on competitive routes. Another recurring issue related to former UA captives and how we were now patronizing the alternatives. I won't go into responses here, in the very unlikely event that any were covered by the NDA. What I will say is that it was the most candid bunch of corporate senior execs that I've ever dealt with. This included a meeting within a day or two after DL's attack plan became evident. Complete candor and no sugar coating.

While we may not like everything about the ride that is about to happen, as long as the current team runs the show, I have a lot of confidence that every decision has a rational basis behind it even if not outwardly apparent, one that will keep us flying the Eskimo for years to come.

As an FF of both AS and VX, while I'll miss VX, I am as happy as one can be in this circumstance in the result.
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Old Apr 4, 16, 1:25 pm
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Originally Posted by berliner5000 View Post
Go on...
Bunch of domains were bought after the VX bidding announcement. People will often buy domains in the hope a company will give them money to buy them, making a quick buck.
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