For months now, Alaska has been preparing to acquire Virgin America, and yesterday it became official. Alaska now owns the airline, but the two are far from becoming one. The hard work to make that happens starts now. In the meantime, Alaska has shifted marketing direction in exactly how it’s positioning this merger, and the new plan has a very Virgin flavor to it.
When the merger was first announced, Alaska seemed to be highlighting how complementary and similar it and Virgin America were. The merger press release noted in various places that the two airlines were known for providing outstanding customer service, having low fares, employing hard-workers, earning customer admiration, providing excellent inflight service, operating a safety-centric airline, and more. While there are similarities, nobody was buying that these were two peas in a pod. And now with the closing of the merger, Alaska has shifted the messaging to actually highlight the differences with its “different works” tagline.
At first blush, it looks like someone at Alaska forgot to password-protect his computer, and a Virgin America marketer snuck in and launched a new campaign. I mean, does this sound like the Alaska you know?
I can appreciate a Ren and Stimpy cameo as much as the next person, but it still doesn’t sound like the Alaska of old. Neither does this:
Like bacon on a donut, electricity and guitars, or Labradors and poodles, we’re an odd couple that works well together. We may seem like an unexpected pair—but our differences complement each other. Together we’ll accomplish our mission to continue challenging the status quo, and make flying better for everyone.
This sounds like it has purple-stained Virgin America fingerprints all over it. That, I suppose, is deliberate in that it should help calm the jittery Virgin America-lovers. There are some Californians who are truly afraid that those flannel-wearing Seattleites are going to ruin the cool-kid airline they love. This may calm their nerves a bit, though it might have the opposite effect in Seattle. Having the merger-closing ceremony in San Francisco could also cause concern in the northwest corner of the country, but it shouldn’t. It looks like Alaska is really just bending over backwards to make sure the Virgin America folks feel included. That’s not a bad thing.
As for the slogan, it’s not my favorite, though I’ve spoken to others who absolutely love it. For my logical brain, the slogan just isn’t accurate. It should say “different CAN work.” Sure, mixing labradors and poodles (Virgin America is so clearly the poodle here) may have created an adorable dog, but not all mixes work out right. Ever see what happens when you mix a pitbull and a dachsund? (This is real.)
Right, that clearly didn’t go as planned. (Thanks, Earth Porm.) And right now, we don’t quite know what the Alaska/Virgin America combo is going to look like. I suppose the slogan is simply aspirational, but it’s way too early to know where this union is going to go.
Until the merger closed yesterday, Alaska couldn’t dig into Virgin America’s numbers, and that means there wasn’t enough data on which to base meaningful changes. Now, the books are open and people are probably cuddling up in bed with reams of paper (or, you know, a tablet) to figure out which direction looks best.
Because of that, almost nothing has happened yet outside of the transaction simply closing. The most visible change so far is a route announcement, or three. Even without Virgin America’s numbers, Alaska has already found some opportunities in markets Virgin America previously abandoned.
It’ll bring back flights from San Francisco to both Orlando and Orange County. The former, well, I don’t quite know why. But the latter is something that makes a lot of sense. This merger is supposed to be about increasing utility to travelers in California. While Virgin America couldn’t make this route work on its own before, today there’s less competition in the market and Alaska has a stronger presence on the southern end. I’m not surprised to see this high on the list.
The airlines are also going to start a new route, San Francisco to Minneapolis, something that I assume was at the top of the list for an important corporate client or two.
Other than that, the only announced changes (starting Monday) are a few early cross-benefits in the frequent flier program (reciprocal mileage earning, elite priority check-in and boarding). Nothing else has been decided, or at least not publicly. They specifically call out that “no decisions regarding the Virgin America brand have been made.” So it’s mostly a waiting game.
And that’s why this new “different works” slogan, while highly aspirational, makes me nervous. The mad scientists are just starting to put this hybrid together. Maybe it’ll be a labradoodle, but it could also end up a pitsund (dachbull?). As a Southern Californian, I hope it’s the former. Either way, I’ll cover the evolution every step of the way.
The AS press release says that the new flights will be selling within the month and operating in Summer 2017. I wonder how much progress they’d have made in consolidating their real estate in SFO by then since I believe they’re currently on opposite ends of the airport.
SFO-MSP makes sense, as MSP is trying to be more of a yuppie tech metroplex.
SFO-RDU would be another, similar route, beyond SFO-AUS which I assume is already in place for at least one airline.
My sense that the SFO-MSP route would cater to Wells Fargo before the tech crowd. The question is, will that route be operated with similar equipment as the existing Alaska SEA-MSP route or will it be the cool-kid Virgin product.
Not living in Seattle I don’t have any hometown loyalty to AS. When I’ve flown them I found their on-board product to be par or even lacking compared to DL. Virgin has been on my to-do list for a while as I’ve heard positives but their route structure was too limited to ever benefit me. I want to know what AS is going to do to tempt me on that new SFO route vs. taking DL which flies a very good 737-900 product on that route. A kitschy minute long commercial tells me nothing.
SFO-MSP is happening because it is one of two Delta hubs where AS has its code on a number of DL flights… so AS sells not only SFO-MSP but a bunch of destinations via the DL codeshare. (ATL is the other DL hub with AS codeshare)
The mad scientist is in thinking that they can brew something that no one else will notice or be interested in.
I don’t actually think that the “Labradors and Poodles” type marketing style is that far out of character for AS – since the rebrand last year (and long before the acquisition was announced), they’ve been moving towards this type of warm/fun/slightly whimsical messaging. A good example is their Fly Nice ad campaign (pics here: http://singleflyer.com/2016/05/21/alaska-airlines-fly-nice-ad-campaign/).
That said, Logan airport yesterday had a sign which said something like “we’ve changed our relationship status to friends with benefits,” and I definitely agree that VX fingerprints are all over it. That might be going a little bit too far…
I’m still nervous about how they will get the products to align, but I think overall the marketing approaches of AS and VX will fit together really well. AS has done an amazing job building their new brand, and if they leverage the VX acquisition effectively, I think they’ll have the strongest brand on the west coast.
I saw the service SFO-MSP/MCO/SNA would start but not who was really operating the service, Virgin America or Alaska. Guess we will need to wait until December 21 when the service goes on sale to see which aircraft is being used to know who’s operating it and then wonder what service was cut to find the aircraft for the flights. Maybe the long hauls will be just one night flight each using aircraft that would have sat on the ground over night anyway.
I wonder if AS/VX will add service from JFK or EWR to both SEA & PDX. AA serves SEA. DL& B6 serve both. AS for SFO, it’s wide open from NYC.
Uh, AS already serves both JFK and EWR from SEA and PDX?
And AS have already announced (a couple of months back) an increase of SEA-EWR to 3x/daily, in addition to their JFK route.
First of all, I love your dog cross-breeding analogy as it describes this transaction perfectly.
I appreciate the candor of both companies by owning what the avgeek world, customer base and investment community said on Announcement Day.
In my opinion it’s much more compelling than C-suite speak about building synergy and efficiencies or patronizing comments about “changes you’re going to like”.
AS is the Seattle hometown airline and no one questions it’s commitment to the Pacific NW. Using SFO as the location to celebrate the consumation is not just a nod to VA incumbents but to their rabidly loyal (and lucrative) client base. My takeaway is a commitment that SFO will be important to the new airline and customers will continue to have an alternative to UA.
The celebration also started with the flight that originated from in Seattle.
I wonder how soon before I can use AS FF# and get AS miles and segments on Virgin flights.
Speaking of dogs, this merger reminds me of the coolest cross breed of all time – the shitsa-caca-poopoo!
SFO – MSP seems like a shot at DL. That was quick.
I wonder if SFO – SNA will be on E175s instead of a 737 or 320? AS has had success doing intra-CA from SJC on the E175.
I don’t get all the sucking up to the VX folks. If VX was so successful, they wouldn’t have sold themselves after less than a decade in the air. I remember when they came to my home airport with a huge marketing blitz and then dropped the airport within a year. They flew on the most over saturated route out of SJC and it’s not a surprise they failed. It’s like they had no idea on what people actually want in an airline.
Because realistically SEA is reaching a saturation point for AS, between AS moving into lower-tier markets like OMA and CHS. The low-hanging fruit is gone there.
Compare and contrast with SFO/LAX for VX, where VX didn’t even serve PHX, ATL, MSP, let alone lower-tier markets like IND, OMA, CHS or MCI. AS has a LOT of possibilities for network expansion out of CA, but they can’t afford to blow off VX’s existing customer base to make them work.
And oh yeah, DL shows no signs of backing out of SEA, so might as well add California to the mix.
I have no doubt that AS will be more successful than VX since they can plug in the right product into the route and be able to maximize profits. Who needs a fancy F seat for intra-CA routes when something else has the right mix of seats?
I think there will be a lot of changes out of California in order to build a more sensible airline.
VX is/was counting on AA to leave T2 in SFO once the T1 redevelopment was done. Theoretically it could be done sooner if they split operations between intl A and T2 but it would not be pretty.
LAX is the bigger conundrum. Emails provided to the DOJ indicate reluctance on Alaska for LAX expansion. There is little gate space. Expansion is slated for WN in the ironically named Terminal 0. Perhaps they can come to an agreement to use Bradley gates in the new mid concourse. Otherwise the growth will not be centered in LAX.
flyingcat – In LA, the new Alaska is going to control most of Terminal 6 once Delta moves over to T2/3. This might not allow growth, but it at least puts them in a common area. Then future projects (T0, T9, Bradley midfield) will likely allow Alaska to grow further. But it won’t be anytime soon.
Apologies if this was covered in a previous post, but since southbay flier mentioned E175s, I was wondering if anybody had any thoughts on whether VirginAlaska (which *should* be the new name :) will tilt towards Boeing or AirBus over the next several years.
Thoughts? Lots of people have opinions. But no one “in the know” will discussing this here, assuming AS has even made a decision yet.
Jack in SFO – I think it’s highly likely Alaska will tilt back to Boeing, but there’s no reason for them to force the retirement of the Airbuses anytime soon. That’ll work itself out over time.
Alaska’s comments about the A321 NEO were interesting. They seem to be excited about that plane. Boeing will have to figure out its plans to combat that, because AS sounds like it might want to keep them.
In my dreams…it’s a beautiful aircraft from a customer standpoint and I’m hoping AS loves it so much that they want more!
I think if nothing else, having the VX Airbus and the AS Boeing fleet puts AS in a good position to credibly play the manufacturers off each other for the best deal for future orders, as opposed to when Southwest makes noise about Airbus to try to extract a better deal from Boeing; nobody really believes that WN would actually order A320s.
Now there is an idea… What if the new Alaskan Virgin hired some of Spirit’s marketing folks?
Then you could have the “Pretty Rad Intra California Kickoff” (PRICK) sale, among others.
I think the best thing from this merger in California could be a real competitor with Southwest for intra-state flights. The branding always been a bit quaint in the PNW way. A little Virgin style will help them market against Southwest. The in flight experience is already better.
WN has a hard time competing out of SEA with AS…I think they see lots of opportunities to do the same to them in CA. Wouldn’t you rather earn ff bennies on an airline that’s offering the world?
That’s the angle United used to use. I remember getting ads from United for Shuttle by United along the lines of “Their frequent flyer program can get you to Omaha. Ours can get you to Osaka.”
For as much as this merger has been said to be about SFO, it’s LAX where the combined airline will have more destinations. They will serve 33 destinations from LAX and 22 from SFO, and that’s after the three new route announcements. I wonder if they’ll finish connecting the dots between focus cities SAN and SJC to these two hubs, or even smaller focus cities BOI and SLC? Vegas even overtakes SLC in destinations, 8 to 7.
LAX hub: goo.gl/Rv2iWt
SFO hub: goo.gl/gQUv7C difference is largely in Ski and Latin American destinations.
I wonder if the west coast to HI flights will be the first to be changed/redistributed within the Alaska Virgin combination. I believe they compete on some of these flights and could use the planes for additional cities or frequency. Thoughts ?
They don’t overlap at all on Hawai’i flights. Alaska doesn’t serve the state from LAX or SFO. Overlapping routes are:
SFO – PDX / PSP / PVR / SEA / SJD
LAX – SEA
The closest overlap to Hawaii would be VX from SFO compared to AS from OAK and SJC. There is precedent for serving all three, as Hawaiian does it, and with significantly larger airplanes.
From LAX there is no real overlap as Alaska doesn’t fly from any of the LA area airports to Hawaii. They do have SAN-Hawaii but there won’t be a ton of overlap; some south Orange County folks might choose SAN-Hawaii over LAX-Hawaii but for most of LAX’s market, SAN would not be considered as an alternative.
Hmm just a thought…could AS use the VX A320’s out of SNA to Hawaii? We already know that AS’s -800’s and -900’s won’t work.
Steve – I don’t believe the A320s could make it from Orange County.
Anyone else have a bad experience yet? I travel A LOT for work…and personal trips…and have always hated flying. But I have loved flying with Virgin America. In the past two months, I have had THE WORST EXPERIENCE flying Virgin. Some of the customer service agents I’ve spoken to have told me that they are hearing the same thing from other Virgin customers.
I spent 7 hours at SFO…for my 1.5 hour flight to Las Vegas. The flight ended up cancelled. Same thing on the way back. I ended up driving both ways. Interestingly enough, two payments made to my Virgin America credit card were lost and I just had to file a claim with them. And then I had fraud on my debit card and…guess what…the fraud was for charges made on a Virgin America flight out of SFO. My debit card is in my possession, so I didn’t lose it. Each time I called Virgin…30-60 minutes on hold.
Alaska has already completely ruined the Virgin America flying experience. What a shame. And Branson said he worked to build the airline in the U.S. because of what the airlines here did to the flying experience…making it a horrible experience. And Alaska has managed to turn Virgin into the same horrible experience faster than I could have imagined.