sfozrhfco

Took what will likely be my last Virgin flight last night having finally used up all my points. Direct TV was actually working but the rest of the entertainment system--with the exception of the moving map--continues its serious downgrade. Was in fact mostly the same as what United offered on the way down. It is great to offer free movies and tv except both UA and VX now have movies and tv shows that nobody would want to pay for anyway. Thus you see that nobody pays for MCS select any more and the F cabin was again empty.

One thing in switching from a revenue based to a mileage based program AS loses is that it is a not really worthwhile to pay for MCS or F. With VX, the more you spent in the beginning of the year, the faster you got the status you wanted. There was also a built in incentive to use the VX card to get status points. That is thrown out the window, so now my incentive is to go to LA on $29 fares to maximize mileage earning. Haven't paid for a single MCS/F ticket on VX this year as a result--though got several comp upgrades.

I rarely if ever saw empty seats in F pre-acquisition. My last few flights I have only seen 1 paid passenger, an occasional commuting pilot, and a couple people upgraded from their seats in coach on the plane.

It seems pretty obvious from my 20 flights on VX so far this year that the slow, steady decline of the VX product combined with the realization that it will be replaced by something worse has resulted in many profitable passengers leaving.

It was interesting too that ALK chose not to include consolidated figures when announcing their net income which actually fell 13.6% on a combined basis. Last year VX and AS had income of $308 million while this year for the quarter they only earned $266 million. That is a large decline for the summer quarter which is always the best one for VX. With fares down at rock bottom levels after the summer season and with few people paying for premium seats, combined with rising labor costs, things could get ugly fast.

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Also saw that UA announced today that starting in April they will be going from 1 to 3 flights a day from LAX to BOS so those $104 average fares ALK management was complaining about will likely fall even further.

eponymous_coward

I flew VX three times in early October. Twice in a 8/8 F cabin (ORD-LAX and LAX-SEA), once on a completely full flight where I wasn't upgraded to MCS because, well, completely full flight (SFO-SEA).

I'm sure my anecdotes are not as valid for whatever reason, though.

¯\_(ツ)_/¯

tphuang

sorry, I think you misunderstood that I was referring to JetSuiteX. I live in NYC and have never flown WN in my life, nor have any desire to do so. I have flown AS and liked the product, but I certainly like VX product more back in the days.

As for AS vs WN, it's going to obviously be an up hill battle. Due to having fortress hubs in OAK, SMF, ONT and BUR along with huge hubs at SJC, SNA and SAN, it's an uphill struggle for anyone operating outside of SFO-LAX shuttle. Sure, AS has better product when E75 is operated vs WN, but so does JetBlue and it can't get any kind of premium on LGB routes to SJC/OAK. JetSuiteX kind of adopts a new model of aiming purely at more higher yielding and time conscious travelers. But it's still a huge uphill battle when only running 2 or 3 daily bw WN fortress hubs.

The only way to compete with WN on these intra-cali routes is either to build up to their frequency on multiple routes or become the largest carrier in at least one of the carriers. Both are hard options.

sfozrhfco

The obvious answer is that two of those flights involve SEA where the vast majority of AS loyalists/elites reside. If they were not doing well there, then they would really be in trouble.

mikexner

In my opinion, Virgin was bankrupt. What they were doing didn't work. You can't have a new owner do the same thing and hope it starts working. What Alaska does works and makes money. Is it all the frills you liked about Virgin? No. But it's profitable.

mikexner

because the pricing to keep the virgin branding would cost sooooooo much that it could never make money!

mikexner

phoenix used to be a US Airways hub. Of course American is going to win out there. Alaska's hub is Seattle, Phoenix is a destination they serve, not an airport they serve. There's a difference.

mikexner

Agree
look at any market than WN and AS have gone head to head WN has lost. They used to battle on the SEA GEG route, and eventually, WN pulled out completely. I think the Hawaii adventure will be short lived.

bdhaliwa

Then you should absolutely stick to AS along with your fellow fliers in ANC/PDX, AS has had this corner of the country to itself. Not so anywhere else AS will go next. Wana compete for SFO/LAX flyers, killing a airline that people of that area really liked is a really dumb way to go. If that Airline business model was broken, then why the hell did you pay all those $$$'s for?

sfozrhfco

That may be what AS is doing to it but they were profitable before AS took them over. When you are a small airline in a hyper competitive market you need to offer more perks than other airlines to get people to pay you more. Remember VX started right before the financial crisis and made it on their own and sold themselves for more than any rational person thought they were worth. You can’t be much more successful than that in business terms.

AS will find out that offering a totally forgettable product as the weakest player in California when all of their competitors have bucket loads of cash is not going to be a pretty picture for them.

sfozrhfco

That is hilarious. You think SEA to GEG is a crucial market for anybody other than AS?

sltlyamusd

VX was consistently losing money the first 5+ years they were in business and only became profitable during the past few years. Also, pretty much every US airline has reported profits over the past couple years, and VX did not have particularly large profit margins.

Adelphos

VX had a profitable enterprise, brand equity and was expanding to new markets (LGA, DAL, etc). Remember Virgin America consistently won reader polls in lists of top US airlines. Particularly out of SFO, some customers went out of their way to fly Virgin. A better economy and lower fuel prices did help. Were they going to be the next Southwest or Jetblue? Probably not. But they probably could have survived.

The key unknown is how they would have reacted to the expansion of Mint, which was the biggest threat to their brand equity as there was now a "cooler," objectively better product on many of their most important routes. I imagine Virgin would have had to do significant plane refreshes (or lease new planes) and launch a comparable transcon product.

The problem is that Alaska has responsed to the Mint expansion by devaluing the transcon product, which most are predicting will be a wrong move. At the same time, many of the partnerships Alaska has benefited from (Delta, AA) are going away.

sfozrhfco

If that is your defense of AS, that is a very weak one because despite the challenges faced by VX, AS paid twice as much for VX's stock than it was worth before the announced buy out--which would be insane by your analysis...LOL

Again Virgin started in August 2007 just months before the financial crisis and with not a single route where they were the dominant player. 2008 was not exactly a stellar year for any US airline. The fact that they survived was because of their brand cache which is now being killed off. Had they started off with the AS product, VX would have been dead in 2008.

The fact that VX management knew enough to sell at the peak of the market knowing full well the increasing competitive pressures coming at a time when all airlines have tons of cash on hand, is another example of how the VX management team was more creative and nimble. If VX was such a basket case and AS thinks they can offer a much worse product and make money in the current circumstances, then the AS management team better get out of SEA a bit more. Any casual traveler from SFO could have given clearer insights into the competitive environment than any one of the top brass at ALK that were present on their earnings call.

Adelphos

I've been burning Alaska miles on F transcons from JFK to CA at 20,000 or whatever. A great deal for a non-redeye flight. The fact these are widely available indicates some yield management issues for F.