edcho

I'm 99% sure that management has no idea. Even AS management said yesterday that they have to study the Airbus capabilities cause they only work with Boeing.

Even then, maintaining the existing routes in the new combined airline (which is years away) will be very unlikely. IMO its more likely they will sell the Airbus and buy more used Boeing to maintain fleet commonality than keep them on existing routes.

eponymous_coward

Not really. AS serves GDL, SJD, BOI, EUG, RNO and SLC from SJC, along with Hawaii and their hubs. That's not "abandoning" the Bay Area (and they are adding SAN and SNA in a couple months).

It will be interesting to see what they do with the SJC focus city once the merger has fully proceeded (where they are a solid #2 to WN). That being said, WN flies a good schedule from SJC, SFO and OAK, and BUR, LAX, SNA, ONT (and soon LGB too), so I suspect AS is going to try and imitate that model of using secondary airports and main airports in California, rather than focus everything at SFO/LAX.

airplanegod

I hope so, that is the reason I am against this buyout because AS is screwing everyone over on the East Coast.

transportbiz

I don't know what airlines you think are giving away 90% of F class for free. As a 1K on United, I didn't receive a single upgrade in my last year on them. And since the upgrade list is totally transparent at the time of boarding, I could see on many flights where there were zero upgrades. Many UA elites have jumped ship.

"Free" is rather open to interpretation. Spending $20-30K a year on one airline, doesn't seem too free to me.

I've upgraded many times on VX to F Class for $39-$179 depending on the length of the flight.

AS does give free upgrades to elite passengers, but only on the higher economy fare buckets.

I always liked VX, but it wasn't all nirvana there either. I've had nasty GA's and FA's trying to arbitrary disallow roll aboard, had them run out of anything to eat in 20 minutes of a 5 hour flight when seated in MCS. Had to fight over and over for money that kept vanishing from my bank, and doing that with phone queues no one could call great service.

I was a very early adopter, and was supposedly a "founding" member in the Elevate program. When I'd joined there was all this promised acknowledgement that would be afforded as a special founding member, I never saw anything special for that, and eventually, it just blew away like many of the smoke filled promises of all airlines, so not terribly unique there.

All that said, AS doesn't makes a lot of sense to me...as an all Boeing fleet tries to implement and all Airbus fleet? Aircraft with far different interior designs and features. It would have seemed a B6 VX merger would have produced far more synergies faster.

transportbiz

Exactly who was to blame wasn't ever assigned entirely to AS. If anyone had read the wikipedia link that was posted, they would have seen there was plenty of blame to go around on that crash, including to the FAA. In the end AS and McDonnell Douglas accepted responsibility.

Shut down a corporation for wrongdoing? And put 10,000 people out of work who never did anything wrong? As always, these things are never all the simple.

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!

sltlyamusd

I can't believe people are still bringing this up. This happened in January 2000. AS retired its last MD-80 in 2008 and the maintenance facility that performed the maintenance was closed in 2004. Since then, all heavy maintenance has been done 3rd party. 2 fatal accidents in 40 years is a good safety record, especially considering where they fly.

By the same logic, I would not fly United because of flight 232 or American because of flight 191. Delta had a MD-88 that had an uncontained engine failure on takeoff killing two due to maintenance failing to detect a crack in the fanblade. These accidents happened before 261, but still in my lifetime.

Southwest has had its share of scares too (2 mid-air rapid decompressions about 5 years ago due to structural failures in the fuselage), but nothing that led to a passenger fatality.

TMM1982

I'm more concerned with the ORD/LAX and ORD/SFO routes. If AS abandons that, that means we're essentially left with 3 options, AA, UA, and WN. Not very appealing.

sltlyamusd

I'm sure he's crying all the way to the bank, given the value of this transaction to VX shareholders. Cue the violins!

GrayAnderson

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).

Snowdevil

It's understandable that you'd feel that way if you didn't know the full picture; let me help clarify why this deal made sense. AS has a growth plan of 4-8% annually going forward, with the majority of that taking place in California. Allowing VX to be purchased by a much more formidable competitor like B6 would have severely hindered, if not stopped outright, those growth opportunities.

This purchase was one that AS had been mulling over since October, and only when B6 expressed interest did the price skyrocket. Regardless, AS is comfortable with the debt taken on since they have one of the strongest balance sheets in the industry, and the acquisition was necessary for their future.

This purchase was about securing the future for AS for the next 25 years or more.

airplanegod

I hope you're right, and I would definitely start flying AS. I just hope this wasn't just a buyout of VX so they can shut down everything VX including routes that actually make money.

Visconti

I may be in the minority here, but overpaying for an asset when it solves multiple needs is often a better choice than inaction. In this case, keeping the CA routes from B6 and AS ensuring their own expansion plans makes perfect sense. More often than not, the best long term investments are the ones in which you overpay--it's priced high for reason. This purchase may be an example of that adage.

However, as an individual consumer, I couldn't care less about ALK's performance. VX's appeal to me was their best in class F product from SFO to LAS, ORD and JFK. While I remain hopeful and optimistic, I don't expect AS to retain the integrity and value of VX's F product.

As to the "best" coach? Well, coach is coach, regardless. I'm not interested in a well-marketed coach class to make me feel better about paying a little more for it. I've flown coach on all the carriers and none of them make a any difference to me.

sfozrhfco

That really remains to be seem. Could very well end up as nearly every other California carrier that was taken over-with very little to show for it. AS already has two partners (AA/DL) which fly LAX/SFO-JFK. AA/DL also now have a large presence in SFO-LAX and obviously AA has a hub in ORD to cover SFO/LAX-ORD. AS does not need VX's flights to SEA/PDX/PSP as they already cover them with adequate frequency. The in perimeter slots at LGA/DCA are also nearly useless to AS as is the mini hub at DAL. This does not even begin to account for the fact that AS won't be able to operate any part of VX without the employees given the incompatible fleets. Most of those people can make more working at another airline--especially for those that bought stock during the IPO who cashed out this week and have a nice nest egg to cover the transition to a new employer. If your primary reason for working at VX because of excitement of working for what was a start up, going to a quasi legacy carrier that is fairly conservative and not very innovative may not be all that attractive.

Given that the points with Comenity are no longer posting automatically perhaps some people have already chosen to take the money and run--which would be a smart thing to do.

AS's management got caught up in the excitement of the bidding and really did not think things through carefully.

ElmhurstNick

I would speculate that AS will abandon LAX-ORD and increase SFO-ORD to 4x/day all year round instead of 2-3. [ETA: I think it will be on AS metal though, with the VX metal being moved to SEA/PDX to JFK/BOS.]

American can't wait to get rid of capacity on SFO-ORD (they've cut back dramatically over the winter) and so I think they'd be content to codeshare on ASVX at times which feed a SFO hub, and fly 3-4x/day on their own metal on times which feed the east coast/international banks out of ORD, especially if AS pulled out of the more strategic LAX-ORD.