April 3, 2017, © Leeham Co.: Sir Richard Branson came to Seattle last week to promote the new service by Virgin Atlantic Airlines to London. In a hissy-fit, he promptly pissed on Alaska Airlines for the business decision to drop the Virgin America brand in 2019.
Alaska, of course, acquired Virgin America last year. The acquisition didn’t sit well with Branson, who nevertheless made out well in the deal.
Although Alaska officials said they would decide later whether to retain the Virgin brand, only those with wishful thinking gave any chance of this happening.
Branson certainly knows this. In 1997, Virgin Group acquired the low fare carrier Euro Belgium Airlines for $60m and promptly dropped the name in favor of Virgin Express.
VE lasted only nine years; it ceased operations in 2006 when it was sold and merged into the new Brussels Airlines.
Branson’s whining over Alaska’s decision to operate the merged operations into the Eskimo’s image smacks of hypocrisy.
Let’s also remember that his Virgin Atlantic is 49% owned by Delta Air Lines, which is building a hub in Seattle in competition with Alaska. The fight between Alaska and Delta is sometimes bitter.
Branson’s criticism of Alaska might have as much to do with Virgin Atlantic’s partnership with Delta as it does his own bruised ego.
Alaska’s decision to merge Virgin America into the Alaska brand was really never in doubt.
In the history of US airlines, operating more than one brand (aside from regional/major carriers) never has lasted for more than a few years.
Including at Alaska.
Alaska acquired the small airline Jet America in 1986. A little more than a year later, Jet America’s brand disappeared into Alaska.
Even its regional carrier, Horizon Air—which for decades operated under this name despite being part of the Alaska Air Group family and being the feeder to Alaska Airlines—finally saw its Horizon name submerged into Alaska. Today, “Alaska” is big on the fuselage and “Horizon” is in smaller print.
United/Ted, Delta/Song, USAir/Metro, Continental/Continental Lite were experiments separating the mainline carrier with a low fare operation. Each was short-lived. Each of the secondary names were absorbed back into the mainline.
Even the granddaddy of multiple operations eventually gave up.
Texas Air Corp was the only one of the US airline companies to have a long-lasting set of different brand name, but for the very specific reason of having non-union and union operations separate.
TAC was formed to buy Texas International Airlines, a small regional in the US Southwest. TAC made a successful hostile takeover of Continental Airlines.
The two brands merged and eventually were taken into the US airline industry’s second big bankruptcy (after Braniff Inc.). TAC busted union contracts in the process.
Texas Air later acquired unionized Eastern Airlines. It created non-union New York Air and acquired non-union PeoplExpress, which itself had acquired unionized Frontier Airlines, Britt Airways and PBA Airlines.
Eastern, New York Air, PeoplExpress, Continental operated separately. New York Air, People, Continental and the regional airlines merged in 1987 in what was known as the Big Bang merger. Eastern, in a death spiral, remained separate until it was taken away by the court from TAC in bankruptcy.
Every merger since then eventually combined the brands after a transition period.
US Airways and America West Airlines adopted the former’s name.
Delta Air Lines absorbed the Northwest Airlines name.
Southwest Airlines dropped the AirTran name.
United Airlines was absorbed by Continental, which dropped its own name and took UAL’s.
USAirways acquired American Airlines and adopted American’s name.
Thus, the fate of Virgin America’s name was sealed the day the deal with Alaska was closed. Only the naïve would have thought otherwise.
Branson certainly is not naïve. But what he hoped to gain by coming into Seattle, an intensely loyal market to Alaska, and piss all over the Eskimo is beyond me, other than headlines and publicity. Which he certainly received.
It might have been a case of any publicity is good publicity.
But I don’t think it will help Virgin Atlantic in the process.
Well, now that you’ve literally brought the subject up, Scott, in this column, I wondered whether Wizz Air would be most wizzing on LOT and Lufthansa with its noted capacity growth–per last week’s column. (LOL)
This is simply SRB doing what SRB does!
At the end of the day he picks fights for the simple reason there is benefit for him in doing so.
His long and often bitter fights with British Airways in the UK and QANTAS in Australia unfortunately resulted in his airline shareholders and partners left to pick up the pieces. Funny enough, SRB seemed to come out of these fights not looking too badly!
In the aftermath of the Virgin Australia / QANTAS fight there was a fair amount of commentary about where Virgin Australia went wrong. Interestingly, and I was surprised for the VA board to acknowledge this, one of the lessons learnt revolved around not allowing business fundamentals to be overly influenced by media (SRB) hype.
These days SRB is rarely seen promoting the Virgin Australia brand and when he is, his speaking duties are normally limited to private events. Market consensus is probably speaking volumes here.
Maybe we should ask Singapore Airlines for the commentary on the subject. I am sure, if they were willing to talk we would have some enlightening insights into the matter.
Good luck to Alaska Airlines. Form where I sit the world is a more interesting place with an airline like Alaska Airlines promoting its region, culture and history. We can live without Virgin America, even its mood lighting, cabin offerings and cheeky personality is quite funky.
The British flag hanging limply behind Branson is inverted, long an internationally agreed sign of distress…
Not the classiest commentary you’ve blogged Scott….
You’re right, Branson’s statements in this case are far from classy. Thank you Scott for adding your voice to the chorus on this.
Branson is what he is, lets talk airplanes like NMA/MOM – open up the firewall on the analysis of those I say!
I’ve seen only snippets of what he said, but those snippets came across to me as him being more annoyed about former Virgin America staff losing their jobs than of the disappearance of the Virgin brand (although he was clearly annoyed about this too), although he’s bound to be annoyed at the continuing limitation on foreign ownership and control of airlines operating in the USA and the way this may well have contributed to VA’s demise.
Anyway, maybe he was just spouting off but maybe he or Delta felt being ‘supportive’ of laid off former VA staff was important or beneficial or something.
He may have wanted to portray sadness over the loss of jobs, but the fact is that most Virgin America employees are keeping their jobs – and they’ll probably be paid better too. Back office folks, yes, some have lost jobs. The majority of employees – the pilots, mechanics, flight attendants, airports folks – their jobs are more secure with Alaska than they were with Virgin.
In otber news, the 787-10 is flying. I think that plane will tick over very well.
This might be a case of Branson not thinking about who his audience is. In California, there are a lot of people who are really upset about losing Virgin America (though my sense is that most of them know next-to-nothing about Alaska Airlines). If he was opening a new Virgin Atlantic route to the Bay Area or SoCal, maybe he’d win some points from the audience for criticizing Alaska Airlines.
But in Seattle it’s a different story. People love Alaska and don’t give a crap about Virgin America’s mood lighting.
The press Branson got focused more on his pissing on Alaska and less on the new London service. Bad choice, as Adam points out. Branson even said he thought about being nice here but decided he wouldn’t be.
Not that you and I agree on much, it appears you took this story personal? Sometimes I wonder whether we’ve allowed things to get too much under our skin? Sir Richard shows up in Seattle and talks about the hometown airline and that should not get people up in arms? As he is slamming the local hero, you can remember when the airline was fighting to make a name for itself. Who does he think he is, when the buyer holds all the cards and little Alaska holds all the cards in this game. And then there is that thing Sir Richard has with the other bad guy, Delta!!!! This is simply too much for a local person to take. So much so that you forgot to even mention the 787-10 took flight (another hometown hero) and the A319NEO also took flight? Who does this interloper think he is? Showing up and messing up a perfectly good news day? So you took out your piss and vinegar in your pontification? Good for you. If Sir Richard can do it so can you!!!! Now that you have defended the honor of the Great Northwest, do you feel better? Expressing your feelings can be a good thing and I hope this pontification served its purpose? Be well.
What amuses me the most still is this ‘Sir’ thingy…whenever i hear it.
Of course, it still says they are ‘Subject of the Queen’ on their passports… never understood that in a real democracy but i know i know…am clueless. I guess classes never die.
Nothing personal, am sure he is a great guy. Very cool entrepreneur for sure however one looks.
Anyhow the kingdom is at last shrinking to its final core (minus London). lol.
Am with TW here…let’s get back to thingies that fly 🙂
It couldn’t possibly have anything to do with all the money Branson makes from licensing ‘virgin’ to the airline;)
And of real interest.
While its simplistic, it tells an interesting tale, older aircraft are less than new unless the older one has more passenger capability.
767 price is truly interesting and should be selling better.
Does Virgin America fly to Palm Beach? And, if so, do they have a VVIP class for heads of state? I’m hearing great things about this airline. Great things.