Alaska Airlines: Delta Partnership and Future of Virgin America Brand

Business Travel News interviewed Alaska Airlines’ senior vice president of communications, and surprisingly there were some awesome — and revealing — money quotes.

Alaska Airlines is acquiring Virgin America. They haven’t come out and said that means eliminating the Virgin America brand. But they want to stop paying Richard Branson’s 0.7% of revenue off the top licensing fee, and they want to start selling Bank of America Alaska Airlines credit cards to Virgin customers — something they’ve described as a key to the merger’s success.

So when asked about dropping the brand, Joseph Sprague only says they’re not in a hurry to do it which basically says that they will. They’re presumably trying to figure out how to capture some of the brand affinity, especially since Alaska Airlines seems so small and regional (when it’s really not). But they won’t ultimately keep the brand.

We have some things we’re doing well at Alaska Airlines, but we know there are things about the Virgin experience we can learn from, so we’re not in any big rush to do away with the Virgin brand.

Alaska Airlines is consistently at the top of on-time performance for any airline. It’s interesting how they track data to figure out what parts of the process of turning a plane could be slowing a departure.

[W]e audit hundreds of different data points to understand a flight, when it pulled up to the gate, how fast did the ground crew plug in the power and chock the tires. How much time did it take to bring the jetway over to the airplane? What time did the door open once all those other tasks were completed? We audit that over the course of hundreds of flights each day so we can have an accurate picture of how we’re doing. If we’re not doing well, we can pinpoint the driver.

And the real money quote of the interview. Alaska Airlines and Delta have been partners for a long time, but since Delta decided to build their own hub in Seattle — not just for international flights as originally announced, but with their own domestic network competing head-to-head with Alaska instead of relying on Alaska to provide feed for their international departures — the two airlines have been more like frenemies.

You can still credit Delta flights to an Alaska Airlines Mileage Plan account and vice versa, or redeem your miles for travel on each others’ flights.

But otherwise Delta has been going after Alaska — and driven much of Alaska’s strategy to expand vigorously, to grow at other airports beyond Seattle to diversity, and some would suggest even buying Virgin America for the same reason. (Despite this they’ve maintained operating margins at the top of the industry as well.)

So Business Travel News asks about the Delta relationship:

BTN: Is Delta Air Lines still a partner as well?
Sprague: They are technically a partner at this point.

(HT: Cranky Flier)

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. Virgin America has a very loyal fan base and there’s a reason for it – The Sir Richard Branson touch – and it is found in all his brands. Alaska Airlines has their fan base and the demographic between the two couldn’t be more different. It will be wise to hold on to the Virgin America brand – the service is unique and well respected.

  2. I so love VA’s mood music and the relaxed atmosphere getting onto the plane.

    It’s almost like when I was in prison and they painted the walls pink and all the aggression and anger immediately drained out of the psychotic mass murderers .

    Perhaps poster Robert Hanson can elaborate.

  3. Hold on to the Virgin America name and pay Sir Richard? Not likely in the long term. But maybe, just maybe, Alaska could change its name to Virgin Alaska, not pay Sir Richard, and not get sued by Sir Richard for not paying?? And Alaska, the State, is just about all virgin territory!!

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