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Alaska inks Virgin America deal

CEO promises ‘more flights’, ‘low fares’, ‘more rewards’

By The Columbian
Published: December 14, 2016, 5:15pm

Alaska Air Group closed a deal Wednesday to buy Virgin America, paving the way for the airline to expand on the West Coast and become the nation’s fifth largest carrier.

Seattle-based Alaska Airlines is consistently the heaviest used airline out of Portland International Airport, flying 3.8 million passengers in calendar year 2015. The airline flew 19.7 percent of the airport’s total passengers in October, with 2,186 flights. Southwest Airlines is the second most used airline.

Virgin, on the other hand, accounted for barely 1 percent of PDX passengers, with 166 flights in October. In 2015, Virgin America flew 84,000 passengers.

Horizon Airlines, which was bought by Alaska Air Group in 1986, flew nearly 3 million PDX passengers.

The deal, however, charts a route into California airports for Alaska. In buying the San Francisco-based airline, Alaska gains a network in California which generates 2 1/2 times the number of daily passengers as Alaska’s markets in Oregon, Washington and Alaska combined, according to the Wall Street Journal.

“Together, we’ll offer more flights, with low fares, more rewards and more for customers to love, as we continue to offer a distinctive travel experience,” said Alaska Air Group CEO Brad Tilden in a statement. “The two airlines may look different, but our core customer and employee focus is very much the same.”

The four larger airlines — American, United, Delta and Southwest — control more than 80 percent of flights in the United States.

Alaska will now boast 1,187 daily flights, the airline said, to 118 destinations.

The $2.6 billion acquisition was announced in April, though it required antitrust approval from the U.S. Justice Department, which raised concerns the deal would reduce competition for American Airlines. Alaska will have to cut its cooperation with American.

The airlines will continue to operate as distinct brands until authorized to operate as one by the Federal Aviation Administration, which reportedly requires the carriers to streamline operations like maintenance, training and baggage handling.

Starting Monday, customers of both airlines’ loyalty programs will earn points when using the other airline. Elite members will have priority check-in and boarding on either airline, as well. Tickets for both airlines will be available on their respective websites starting Dec. 19.

In its Wednesday announcement, Alaska said it had not made any decisions about the future of the Virgin America brand. Virgin sold itself with amenities, such as touch screens, WiFi and mood-lit cabins, while Alaska carved its niche as a punctual, low-cost airline.

“We appreciate that there is a great interest in the future of the Virgin America brand among customers and employees alike,” Tilden said. “This is a big decision and one that deserves months of thoughtful and thorough analysis.”

Alaska would have to pay licensing fees to Virgin’s founder, Richard Branson, to keep using the name, The Oregonian reports.

Alaska employs 15,600 people while Virgin employs 3,200. The two companies formally announced the deal Wednesday morning in San Francisco by unveiling a red, purple and blue Boeing 737 with both brands and a slogan saying “More to love.” The plane will fly Alaska Airlines’ route network, the airline said.


The Oregonian contributed to this report.

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