This one certainly came out of left field, but I think it’s a great move. Virgin America announced today that it has decided to rebrand as Alitalia America on June 1. Further, Richard Branson will sell his 25 percent stake in the airline to Italian politician, businessman, and, uh, “playboy” Silvio Berlusconi. When this happens, David Cush will step down as CEO with a familiar face coming to take his place.
I love this move. After all, Virgin America has been losing money continuously since it started six years ago. Despite some revenue progress, it still can’t cover its costs. How do you fix that? Lower your costs. As you can imagine, the Alitalia brand is much cheaper to license than the Virgin brand. (If I were Alitalia, I’d pay anyone to take my brand off my hands.)
Then again, there are going to be some cost increases in the short run as the airline transitions. Headquarters will move from San Francisco’s Bay Area to the North End of Boston. And of course, a new livery is coming. As you can see, it looks a lot like what Alitalia has painted on its airplanes today. But I’ll talk more about that later. First, let’s talk politics.
As part of this change, CEO David Cush will be getting the boot, and former CEO Fred Reid is back in his place. You remember this story, right? During the fitness test to see whether the airline was truly controlled by foreign interests or not, the DOT decided that Branson had hand-picked Fred to lead the company and Branson had too much influence in his decision-making. The DOT forced Fred out. Well, now that Branson is no longer involved, that’s not an issue.
I’ll give it to Fred for knowing the airline’s place. “When you think of Alitalia, you think of an airline that may not have its act together, may not make money, but it keeps fighting the good fight. That fits us perfectly.”
The airline has already announced some big changes to give it more of an Italian feel. Alitalia America is partnering with Ferrari to create new seat designs while new flight attendant uniforms will be created by Benetton. Coffee will now be from Illy, but this means some configuration changes on the airplane. Three seats will be removed on each aircraft to make room for an espresso machine. All mood lighting onboard will now be green and red instead of purple and red.
Onboard food changes have already begun. The Godfather Sandwich is a new item already on the menu, with more changes to follow. Despite the Italian influence, there will be a distinctly American flavor. Chef Boyardee products and Domino’s pizza will soon be on every flight.
We’re going to see more than just changes on the aircraft. In cities where both Alitalia and Alitalia America fly, they will consolidate terminals. That means in LA, Alitalia America will move to Terminal 2. In New York, Alitalia will move to Terminal 4.
Alitalia America will begin building up its presence in cities with large Italian populations. Look for Philly and the new hometown of Boston to see big increases while San Francisco faces large cuts. The airline will also begin flying to every airport in New Jersey.
To fall in line more with Alitalia’s business plan, Alitalia America will purposefully only sell two thirds of the seats on each airplane to give people room to stretch out. Four First Class seats will be sold in advance with another four being held until the date of departure. Those will only be available if Berlusconi doesn’t use them for himself and his companions. (Curtains will be installed to separate this from the rest of the cabin.)
The airline will also start canceling and delaying more flights. As you can imagine, this is only going to make losses grow at the airline in the short run. But management is confident that when people see how stylish it is to fly with Alitalia, they will start to pay double for their tickets.
The airline’s Elevate frequent flier plan will be renamed UnoMiglia and a reciprocal agreement with Alitalia’s MilleMiglia program will be introduced on June 1 when the official transition happens.
And a happy April Fools’ Day to all.