Edward Russell did a fantastic job tweeting real time information being shared on Alaska Airlines plans as they integrate Virgin America at the airline’s investor day.
They expect to end Virgin America Elevate at the close of 2017. They project a ‘single operating certificate’ to fly as one airline at the beginning of 2018. They’re working towards mid-year 2018 labor agreements and a move to a single reservation system at the end of 2018 (with a trickle of final merger-related activities running through 2020).
While many will miss Virgin America Elevate’s partner awards, Alaska has banked on its Mileage Plan frequent flyer program which still awards miles based on distance flown rather than revenue as a differentiator. And the airline expects to be ‘generous’ with upgrades and use that to attract tech workers who can’t buy lie flat premium cabin seats across the country.
Richard Branson has been making noise that the Virgin America contract runs through 2040, so he wants his percentage off the top even though there’s been a change in control of the airline and Alaska plans to retire the brand. However Alaska says that there are numerous options for them to terminate the deal.
(I’ve noted elsewhere that Branson’s claims that the Virgin America deal continues into the future is completely inconsistent with his claim that he’s going to start a new Virgin airline in the U.S. Both cannot be true.)
While Alaska Airlines has been an all-Boeing 737 airline, they’re inheriting Airbus narrowbodies with the Virgin America acquisition. And those won’t go away for awhile. The majority of leases expire between 2019 and 2024, and Alaska will announce whether they plan to continue operating an Airbus fleet into the future by the end of 2017. In the meantime Alaska will be adding seats to Virgin America planes.
Virgin America is going to move to concourse C in Portland to consolidate operations, and according to Russell Alaska expects “increased gate utilisation will save carrier ~$700,000 annually.”
They’re going to redeploy Alaska Airlines Boeing 737-900s to cross country routes and legacy Virgin America Airbus A320s to West Coast routes.
A ton of new routes have been announced, and they’re all about connecting markets that the airline says wouldn’t have made sense pre-merger.