On FT, someone wrote that at the employee Q&A, it was explained that they didn't think it was worth the investment to do flatbeds on transcons. Interesting move.
Yep - as suspected. The transcon markets, including at the high end, do indeed seem saturated. So it doesn't surprise me that Alaska has apparently conclude that it isn't worth fighting for that passenger. Alaska will naturally have to accept lower yields on its transcons versus what airlines with far better premium products get, but then Alaska also has lower costs than most of those airlines, and will likely still be quite capable of filling those planes with connections from all throughout the west coast, plus with Alaska loyalists. The more interesting prospect, for me, will be the interaction between Alaska's transcon offering and AA's given that Alaska FFs will still enjoy reciprocal earn/burn and elite benefits even in AA's vastly better premium transcon cabins.
Every single Virgin America loyalist that I've talked to has been extremely disappointed by the merger. Many are simply not going to fly Alaska. They are going to fly other airlines instead.
99% of people don't make their flying decisions based on frequent flyer programs. Doesn't matter how good the Mileage Plan program is. No IFE, crappier First Class seats, no more order-on-demand. Those are the things that Virgin fliers will notice.
Correct. "99% of people" don't make flying decisions based on frequent flyer program - a lower but still quite high number instead make flying decisions based first and foremost on price. And therein, of course, lies the fatal flaw for Virgin America - it's costs were too high to align with the revenue-generating potential of its inherently-niche network. All these Virgin America loyalists may be upset about losing mood lighting and on-demand food, so they'll all show their disapproval by going to fly United. And then, I strongly suspect, a fair number of them will steadily migrate back when they realize that the product/service offering from Alaska is - holistically - still just as good, if not better, than a massive network carrier.
But...I go back to the real reason for this merger...AS BOUGHT VIRGIN AMERICA TO ELIMINATE A COMPETITOR THAT WAS CAUSING YIELD HEAD ACHES ALONG THE WEST COAST. OWNING VIRGIN AMERICA NOW ALLOWS ALASKA TO TAKE AWAY THAT FICKLE COMPETITOR & GIVE THE AIRLINE BETTER PRICE CONTROL.
I'd assert (and not in all caps) that the "real reason" for this merger is actually that Virgin America's owners simply decided the business was worth more sold off and that it was time to cash-out.
EA CO AS wrote:
In fairness to my new co-workers from VX, those supposedly heartbroken people had a decade during which they could have put their money where their mouth is by flying VX in droves and paying a premium for the experience.
But that didn't happen, and coolness alone doesn't keep the lights on.
Thank you. Took (typed) the words right out of my mouth. For all of the Virgin America fanatics supposedly out there that are allegedly "heartbroken" of the elimination of the brand, it's notable that all of this devotion never translated into meaningful (or, for the most part, even minimal) profitability for Virgin America. That's the bottom line. Virgin America was a nice brand that never made much money. Perhaps all the Virgin America fanatics should sit back for a moment and pause to reflect on the fact that the airline's own shareholders
decided their business was no longer worth keeping the company a going concern - and instead decided to sell out. That speaks volumes.
AS had a chance to do something bold and they didn't.
I suppose building a solidly profitable airline doesn't pass for "bold" these days. Either way, Alaska has clearly decided that it's more in the business of making money than value-diluting "differentiation."