Alaska Airlines takes over operations of Virgin America
SAN FRANCISCO - It’s a milestone day for Alaska Airlines. On Wednesday the airline finalized its $2.6 billion merger with Virgin America to become the 5th largest air carrier in the country.
Last week, it received approval from the Department of Justice on the condition it would wind down its code-sharing agreement with American Airlines.
That paved the way for a celebration at the San Francisco Airport where a jet load of Seattle-based Alaska Airlines employees came to meet their new co-workers in San Francisco where Virgin America is based.
“It’s great to be done with dealing with lawyers and Washington, D.C. and all that,” said Alaska Airlines Chairman and CEO Brad Tilden. The Alaska employees flew in a new Boeing 737-900 ER that was painted in a blend of Virgin America and Alaska Airline colors with the words, “More to Love” on the side.
“Virgin America passengers love Virgin America, and Alaska Airlines passengers love Alaska Airlines,” Tilden told an enthusiastic crowd inside Gate 54B at San Francisco International Airport, where they plane parked. “We want that passion."
Eventually the two carries will operate as one but, in the meantime, it will maintain its two identities until branding decisions are made in the spring and the FAA grants a certification allowing the two airlines to merge in January of 2018.
"Todayis the first day we actually get to get in and loyalty figures internally, profitability figures internally,” says Tilden who says they will be doing market analysis about the perceived differences of the two airlines.
Virgin America with its hip, neon, young flamboyant feel is a contrast to the northwest coziness and familiarity of Alaska Airlines. Tilden said in the next few months, executives will decide how the two cultures will merge as one.
The plan for Alaska Airlines is to become the dominant west coast carrier by adding the strong presence Virgin America has in California’s major cities.
The largest working group will be the flight attendants. Roughly a 1,000 from Virgin America will be joining 3,900 flight attendants at Alaska Airlines. Both groups are represented by different unions and plan to work out the seniority issues in the future.
But, the executive in charge of inflight services and the flight attendants sees nothing but an upside.
“Both carriers, even before the merger were poised to grow so we would expect growth on both sides,” said Vice President of Inflight Service Andy Schneider. “We expect to be hiring on the Alaska side and have growth on the Virgin side too."
But, 225 administrative staff out of 600 at Virgin America’s Burlingame, Calif. headquarters are expected to be laid off over the next two years said Tilden.
“It’s bittersweet,” said a San Francisco-based Virgin America gate agent. “We are a big family here, we are young and we have our culture."
“We were a bit hesitant at first because we don't want to take away our culture," said Zoila Mancilla. “But, it seems they will be able to combine both and bring it all together."
Alaska's CEO also assured customers that the merger won't mean higher airfares.
“I don't think there's any incentive for fares to go up," said Tilden.
But, he said it will help Alaska compete against Delta, American, United and Southwest, their main competitors and rule out any talk of a takeover.
“To be really clear there's no threat to Alaska today but, if we want to be here, one-two-three-four decades from now, we think we need to be bigger,” said Tilden.