Virgin America will be the latest airline brand to disappear
Mar. 23, 2017
DALLAS (AP) — After months of teasing, Alaska Airlines has bad news for loyal customers of Virgin America — their airline's name is being dumped.
Alaska announced late Wednesday that it will retire the Virgin brand, probably in 2019, adding that name to a list including Continental and US Airways that disappeared in the past decade.
Launching a new airline takes lots of money and patience — one reason that Virgin America's debut in 2007 was so eye-catching. The other was its hip vibe including mood lighting and young, attractive flight attendants.
So when Alaska announced last year that it was buying Virgin for $2.6 billion, it was like asking Virgin customers to trade in their sports car for a minivan — a solid, reliable ride, but not exciting.
Alaska Airlines knew it, too.
Last June, CEO Brad Tilden held out hope to Virgin fans that he might keep the Virgin America brand, and run it as a separate airline under the same corporate umbrella. Tilden said he believed in "the power of the Virgin America brand, and we don't want to lose all that loyalty."
But running an airline within an airline adds complexity and costs. Alaska flies only Boeing jets; Virgin uses Airbus planes. Sometimes a split personality works in the airline business, sometimes it doesn't — remember Ted, by United Airlines? And so Alaska's announcement came as no surprise to people in the business.
Still, many will be saddened, particularly in Virgin's home market of California.
Richard Branson, the British billionaire whose backing and minority ownership stake made the airline possible, posted a letter on Virgin's website bemoaning that Alaska couldn't find a place for Virgin.
"With a lot of things in life, there is a point where we have to let go and appreciate the fact that we had this ride at all," he wrote.
Branson added that it remains to be seen how travelers will be affected by the dwindling number of U.S. airlines. Mergers in recent years grounded US Airways, Continental, Northwest, AirTran, and America West. Airfares rose faster than inflation after those mergers, but then they fell in 2015 and 2016 as fuel became cheaper.
Virgin America played a role in those lower fares by engaging Southwest Airlines in a price war at Dallas Love Field.
Seattle-based Alaska won a bidding war with JetBlue Airways to buy Virgin. The deal will greatly expand Alaska's strength in California. Alaska recently announced it will greatly expand routes from the San Francisco Bay Area.