Aurantiaco
Topic Author
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Why Virgin America Failed

Fri Jul 19, 2019 3:47 pm

I was trying to find reasons why Virgin America was bought out by Alaska a while back, but didn’t find good sources. From what I can tell, they suffered losses and then were bought out, but why? I need a opinion on why they failed.
 
UALFAson
Posts: 1003
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Re: Why Virgin America Failed

Fri Jul 19, 2019 4:02 pm

WOW, you're going to open a can of worms with this topic! I would suggest you use the search function as there were plenty of threads discussing this at the time.

Essentially, Virgin America was too much of a niche airline with too limited of a route network. It was a "fun" product and appealed to a lot of often Millennial and/or hipster tech types. But they couldn't attract a revenue premium for their product, they had too limited of a route network to have widespread appeal to corporate travelers outside of maybe those traveling between the coasts, and/but in that case, their First Class product got surpassed by B6/UA/DL/AA who all started offering lie-flat seats on transcons, which VX did not.

I am sure others can offer more detailed input, but that's a nutshell.
"We hope you've enjoyed flying with us as much as we've enjoyed taking you for a ride."
 
Insertnamehere
Posts: 112
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Re: Why Virgin America Failed

Fri Jul 19, 2019 4:02 pm

They were competing on some of the highest competition routes in the country with an noncompetitive product. Flying J transcon you had options such as American J or F with lie flat beds
while Virgin were still flying Recliner's.
 
drdisque
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Re: Why Virgin America Failed

Fri Jul 19, 2019 4:03 pm

They didn't fail. They just weren't performing as well as the industry standard and were a desirable acquisition target due to their gate holdings at SFO and as competitor elimination.

They weren't performing up to the industry standard because they weren't able to command premium prices for a premium product as they faced entrenched much larger competition in nearly every market they flew.

For example: To be a relevant carrier to business travelers in San Francisco they had to fly to Chicago. However, the SFO-Chicago market already had something like 25 daily flights on UA, AA, and WN. It was impossible for VX to actually "win" in this market, all they could hope to do was survive. This story repeated itself in most of the markets they opened.
 
SFOtoORD
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Re: Why Virgin America Failed

Fri Jul 19, 2019 4:06 pm

Pretty sure their investors got a nice return so not a failure as a business. More a product of industry consolidation during a very hot aviation market and strong economy.
 
jasoncrh
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Re: Why Virgin America Failed

Fri Jul 19, 2019 4:14 pm

To pluralize the word "recliner," simply add an s. adding 's makes it possessive, which doesn't make sense. Also, why did you capitalize the word "recliner"? It's not a proper noun.

Regardless, American and the others did not have lie flat seats until the end of Virgin America - like 2014/2015. Up until then they too had recliners. Virgin America's J product WAS industry leading when it was first launched. And for many years thereafter until the end when others surpassed them with mint, etc.

Insertnamehere wrote:
They were competing on some of the highest competition routes in the country with an noncompetitive product. Flying J transcon you had options such as American J or F with lie flat beds
while Virgin were still flying Recliner's.
 
KlimaBXsst
Posts: 322
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Re: Why Virgin America Failed

Fri Jul 19, 2019 4:18 pm

I think ordinary non regular flyers probably were confused once the drink cart silently passed and they did not see any crew for the next four hours maybe.

Can not confirm this other than second hand.
Aesthetically the A 340 got it right!
 
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Polot
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Re: Why Virgin America Failed

Fri Jul 19, 2019 4:52 pm

drdisque wrote:
They didn't fail. They just weren't performing as well as the industry standard and were a desirable acquisition target due to their gate holdings at SFO and as competitor elimination.

Just to be clear, it was VX’s investors who decided to pull the plug so to speak and put the airline up for sale.

Granted the reason they did so was because as you said they were still lagging in performance (during a boom period) making a successful IPO unlikely.
 
SocalApproach
Posts: 219
Joined: Mon Feb 04, 2013 1:08 pm

Re: Why Virgin America Failed

Fri Jul 19, 2019 4:56 pm

If it was just AS alone as a bidder then I would be onboard with the failure idea. The fact that B6 was involved should put this notion to bed. The topic title is an A.net myth. People like to talk about the early years of VX losing money without inserting facts. The product was a success. What can an airline do that’s going against WN/UA who unloads capacity at half the price when VX launches a new city? You see how much money they sold it for. It’s just business and it’s a success in the end for the shareholders. Sigh...the lie flat seats debate. Unless you are flying a red eye only an arm chair A.netter really believes a sub fleet of lieflat seat aircraft is necessary. VX’s argument was you have the same experience whether you are flying SFO-ORD or SFO-JFK. Having a consistent product was important to them. And as a flyer myself that was important to me too. How annoying is it to get on a UA flight only to find out you are on a bird that hasn’t been retrofitted with in seat power.
 
umichman
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Re: Why Virgin America Failed

Fri Jul 19, 2019 4:58 pm

Polot wrote:
drdisque wrote:
They didn't fail. They just weren't performing as well as the industry standard and were a desirable acquisition target due to their gate holdings at SFO and as competitor elimination.

Just to be clear, it was VX’s investors who decided to pull the plug so to speak and put the airline up for sale.

Granted the reason they did so was because as you said they were still lagging in performance (during a boom period) making a successful IPO unlikely.


They went public in November of 2014.
 
Austin787
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Re: Why Virgin America Failed

Fri Jul 19, 2019 5:00 pm

jasoncrh wrote:
To pluralize the word "recliner," simply add an s. adding 's makes it possessive, which doesn't make sense. Also, why did you capitalize the word "recliner"? It's not a proper noun.

Regardless, American and the others did not have lie flat seats until the end of Virgin America - like 2014/2015. Up until then they too had recliners. Virgin America's J product WAS industry leading when it was first launched. And for many years thereafter until the end when others surpassed them with mint, etc.

Insertnamehere wrote:
They were competing on some of the highest competition routes in the country with an noncompetitive product. Flying J transcon you had options such as American J or F with lie flat beds
while Virgin were still flying Recliner's.

Even when the others added lie flats, those seats were mainly on 2 routes: NYC-LAX and NYC-SFO. JetBlue added mint to other routes, but that was after the Virgin America/Alaska merger. Outside of those premium transcon routes, Virgin America had the best J product even at the time of the merger.
 
santi319
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Re: Why Virgin America Failed

Fri Jul 19, 2019 5:09 pm

KlimaBXsst wrote:
I think ordinary non regular flyers probably were confused once the drink cart silently passed and they did not see any crew for the next four hours maybe.

Can not confirm this other than second hand.

Um, you could literally order drinks and snacks from your IFE... no airline has that...
 
freakyrat
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Re: Why Virgin America Failed

Fri Jul 19, 2019 5:11 pm

Polot wrote:
drdisque wrote:
They didn't fail. They just weren't performing as well as the industry standard and were a desirable acquisition target due to their gate holdings at SFO and as competitor elimination.

Just to be clear, it was VX’s investors who decided to pull the plug so to speak and put the airline up for sale.

Granted the reason they did so was because as you said they were still lagging in performance (during a boom period) making a successful IPO unlikely.


And the Investors were "Vulture Capitalists" who wanted a quick return on their investment.
 
LAXBUR
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Re: Why Virgin America Failed

Fri Jul 19, 2019 5:15 pm

santi319 wrote:
KlimaBXsst wrote:
I think ordinary non regular flyers probably were confused once the drink cart silently passed and they did not see any crew for the next four hours maybe.

Can not confirm this other than second hand.

Um, you could literally order drinks and snacks from your IFE... no airline has that...


I doubt many were confused but I think the point was VX crew weren’t very present and from the pre-integration phase of VX/AS I found their flight attendants to not be engaged at all. I liked ordering on the IFE. I didn’t like the lack of eye contact or the annoyed looks I received after the initial service. Anecdotal I suppose. But I’m not the only one that had this experience.

That’s why they were a niche airline. They did things differently. Some liked it, some didn’t.
 
KlimaBXsst
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Re: Why Virgin America Failed

Fri Jul 19, 2019 5:16 pm

santi319 wrote:
KlimaBXsst wrote:
I think ordinary non regular flyers probably were confused once the drink cart silently passed and they did not see any crew for the next four hours maybe.

Can not confirm this other than second hand.

Um, you could literally order drinks and snacks from your IFE... no airline has that...


Hey ... don’t shoot the messenger.

I am sure if it was such a great idea, a really good carrier like JetBlue or Delta will adopt this on screen ordering service style too.
Aesthetically the A 340 got it right!
 
SocalApproach
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Re: Why Virgin America Failed

Fri Jul 19, 2019 5:36 pm

KlimaBXsst wrote:
santi319 wrote:
KlimaBXsst wrote:
I think ordinary non regular flyers probably were confused once the drink cart silently passed and they did not see any crew for the next four hours maybe.

Can not confirm this other than second hand.

Um, you could literally order drinks and snacks from your IFE... no airline has that...


Hey ... don’t shoot the messenger.

I am sure if it was such a great idea, a really good carrier like JetBlue or Delta will adopt this on screen ordering service style too.


It actually was a great idea and innovative for its time. As a passenger its great to be able to fall asleep or get some work done but then just order something later if you missed the cart. However its not great for the actual employees doing the work. The VX FA's hated it for several reasons. People/Kids ordering non alcoholic beverages over and over and some just wasting them playing around on the screen. It caused large backups for the lavatories to where the VX FA's had trouble even running regular orders. Also VX required you to bring everything out on a tray so when you are delivering to the person sitting in 8C then go back and see their seatmate ordered the same thing now so now you have to make multiple trips while squeezing through the aisles because half the plane is in line for the back two lavs. It gets a little ridiculous on a 5-6 hour JFK-SFO flight as you can imagine. Pair that with they were some of the lowest mainline FA's in the industry but doing far more actual work. I think only F9 at the time paid less.

I can go on and on but something like this while nice for passengers would never get approved at a legacy. The unions wouldn't have it. Jetblue has their own idea that works great in my opinion. You get the entire can, You can take multiple snacks from the basket they walk around with and on the transcon A321 they have an area in the galley where you can help yourself to free snacks to take back to your seat. If B6 charged for snacks I could see the ala cart delivery to your seat working though
 
CobaltScar
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Re: Why Virgin America Failed

Fri Jul 19, 2019 5:53 pm

The limited success they had (for their investors) was on account of being a new airline and getting by with slave wages and conditions for their employees. As the workforce began to wake up and unionize, the investors got out while they still had a small window to get a return.

B6 beat them at their own hipster game and the hipsters and celebs abandoned them for MINT. The only reason the investors got anything out of it is because Alaska was in mortal fear of a B6 western expansion and they wanted to buy themselves a few more years on lifesupport and Virgin America's California territory provided a little buffer to chew through before their heartlands in the PNW come under direct threat.
 
san747
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Re: Why Virgin America Failed

Fri Jul 19, 2019 7:30 pm

CobaltScar wrote:
The limited success they had (for their investors) was on account of being a new airline and getting by with slave wages and conditions for their employees. As the workforce began to wake up and unionize, the investors got out while they still had a small window to get a return.

B6 beat them at their own hipster game and the hipsters and celebs abandoned them for MINT. The only reason the investors got anything out of it is because Alaska was in mortal fear of a B6 western expansion and they wanted to buy themselves a few more years on lifesupport and Virgin America's California territory provided a little buffer to chew through before their heartlands in the PNW come under direct threat.


As a former long time VX employee, I don't entirely disagree with your assessment, but I'll say this:

As a GST/CSA on the ground at LAX, I always felt like I was well compensated. I lived very comfortably in a decent area of Los Angeles on my full-time income from VX alone and had no trouble in 6 years paying my bills, keeping up with my student loans, and having enough disposable income to socialize and date in one of America's most expensive cities as well as travel (obviously not having to worry about flight costs as a non-rev) pretty much whenever I felt/had time, all while having solid (if a little expensive) health coverage.

Would a union have helped? I'm sure. I'm very pro-union in general, and I supported our FAs when they began their movement to unionize because I know they definitely were being paid below industry median. I was in my 20s during this job, and it was basically my first decent job during/after college. Maybe I didn't know better because I was young and hadn't had the life experience. But I do know that the AS unionized CSAs are being hired today to do that same job (in fact, do MORE, because there's a lot of stuff AS has their CSAs do that I never had to deal with at VX) for LESS than what I got hired for in 2012, and will top out in 12 years at only a few more dollars than I would be making if the original VX payscale was still in place (both top(ped) out in the mid-$20s).

As for JetBlue and MINT, I don't think it was a coincidence that I started seeing a LOT fewer A-listers flying VX out of LAX around summer/fall 2013 when MINT was introduced. I'm pretty sure a lot of them went over to AA too once the A321T replaced the ancient 762s. You also aren't wrong about AS either; I think everyone on our end saw their move to merge us as a defensive desperation move, a move that helped them in the short term but doesn't really solve their SEA issues nor will give them dominance in CA compared to UA/WN. However, I will always dispute the notion that VX was on the verge of death if AS or B6 hadn't swooped in. It's moot now obviously, but based on the position VX was in after achieving record high financial performance in 2015, I can't imagine they wouldn't still be flying today if no one had made a move.
Scotty doesn't know...
 
airtrantpa
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Re: Why Virgin America Failed

Fri Jul 19, 2019 7:49 pm

Didn’t song offer drink ordering on their IFE I can’t remember all to correctly. I loved flying them. VX never made it to TPA so I never got to fly on them. I wasn’t going to drive to MCO or MIA just to fly on them for the sake of flying them. I do regret it because VX was one of the few US carriers that I haven’t flown in that has existed since 2001.
AVL my new Hometown airport! Farewell TPA
 
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enilria
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Re: Why Virgin America Failed

Fri Jul 19, 2019 7:51 pm

drdisque wrote:
They didn't fail. They just weren't performing as well as the industry standard and were a desirable acquisition target due to their gate holdings at SFO and as competitor elimination.

I agree. They were profitable when they were bought. Is profitable considered failing now????
 
MIflyer12
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Re: Why Virgin America Failed

Fri Jul 19, 2019 8:08 pm

enilria wrote:
drdisque wrote:
They didn't fail. They just weren't performing as well as the industry standard and were a desirable acquisition target due to their gate holdings at SFO and as competitor elimination.

I agree. They were profitable when they were bought. Is profitable considered failing now????


What was the ROIC over the life of the carrier? I suspect a few profitable years - after debt for equity swaps diminished early investors' stakes, and falling fuel prices - did not make it positive vs. cost of capital.
 
SFOtoORD
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Re: Why Virgin America Failed

Fri Jul 19, 2019 8:22 pm

freakyrat wrote:
Polot wrote:
drdisque wrote:
They didn't fail. They just weren't performing as well as the industry standard and were a desirable acquisition target due to their gate holdings at SFO and as competitor elimination.

Just to be clear, it was VX’s investors who decided to pull the plug so to speak and put the airline up for sale.

Granted the reason they did so was because as you said they were still lagging in performance (during a boom period) making a successful IPO unlikely.


And the Investors were "Vulture Capitalists" who wanted a quick return on their investment.


They were funded by Private Equity rather than VCs. PE typically has a much shorter time horizon.
 
WkndWanderer
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Re: Why Virgin America Failed

Fri Jul 19, 2019 8:22 pm

CobaltScar wrote:
Alaska was in mortal fear of a B6 western expansion and they wanted to buy themselves a few more years on lifesupport and Virgin America's California territory provided a little buffer to chew through before their heartlands in the PNW come under direct threat.


Their "heartlands" in the PNW have been under direct threat for years only to result in United abandoning all but its hub flying, Southwest drawing back from its peak in the PNW, and Delta still in distant second in SEA.
 
emre787
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Re: Why Virgin America Failed

Fri Jul 19, 2019 8:47 pm

santi319 wrote:
KlimaBXsst wrote:
I think ordinary non regular flyers probably were confused once the drink cart silently passed and they did not see any crew for the next four hours maybe.

Can not confirm this other than second hand.

Um, you could literally order drinks and snacks from your IFE... no airline has that...


Norwegian has this too on their 787s afaik
 
KlimaBXsst
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Re: Why Virgin America Failed

Fri Jul 19, 2019 9:18 pm

Yes failed may be too strong of a word. Did not succeed as an independent stand alone carrier may be a more apt description.

Virgin American did succeed at keeping many airline industry veterans gainfully employed during the economic disaster of the Obama era and post 9/11 merger upheavals. Some industry aircrew veterans even managed to get slotted in terms of years they had at Virgin American, ahead of others at Alaska Air Group, while the vast majority of others got only just their worked years of service they had done with Branson’s American dream.

So this is actually one way for those who invested their time with Virgin America gamble, saw success by seeking employment with this start up. Why did JetBlue succeed as a stand alone carrier while Virgin America did not; might help answer the question of Virgin’s successes and failures when phrasing this question for more complete answers to topic.
Aesthetically the A 340 got it right!
 
VS11
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Re: Why Virgin America Failed

Fri Jul 19, 2019 9:39 pm

Virgin America did not fail. Nobody pays billions for a failing business - on top of it, Alaska is still paying Virgin Group royalties for the Virgin brand so it is still generating revenues. The major obstacle for Virgin America was the foreign ownership restriction for airlines which prevented Richard Branson from having control of the company. Plus, the timing of the severe recession did not help.
 
coolian2
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Re: Why Virgin America Failed

Fri Jul 19, 2019 9:51 pm

KlimaBXsst wrote:
economic disaster of the Obama era

Now that is a cute spin on history
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747-200/-300/-400/ER/A340-300/A380-800/MD-83/-88/CRJ-700/-900
 
eastalt
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Re: Why Virgin America Failed

Fri Jul 19, 2019 10:35 pm

KlimaBXsst wrote:
Yes failed may be too strong of a word. Did not succeed as an independent stand alone carrier may be a more apt description.

Virgin American did succeed at keeping many airline industry veterans gainfully employed during the economic disaster of the Obama era and post 9/11 merger upheavals. Some industry aircrew veterans even managed to get slotted in terms of years they had at Virgin American, ahead of others at Alaska Air Group, while the vast majority of others got only just their worked years of service they had done with Branson’s American dream.

So this is actually one way for those who invested their time with Virgin America gamble, saw success by seeking employment with this start up. Why did JetBlue succeed as a stand alone carrier while Virgin America did not; might help answer the question of Virgin’s successes and failures when phrasing this question for more complete answers to topic.


The economic downfall of the airline industry was a result of the Bush Administration. The Obama admisistration allowed consolidation as a result of Obama pulling us out of a recesion. Further, there was no shortage of jobs or a good airline executive. They all found jobs if they wanted with other carriers such as Frontier, Spirit, Southwest and Alaska, to name a few.
 
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EA CO AS
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Re: Why Virgin America Failed

Fri Jul 19, 2019 10:57 pm

san747 wrote:
But I do know that the AS unionized CSAs are being hired today to do that same job (in fact, do MORE, because there's a lot of stuff AS has their CSAs do that I never had to deal with at VX) for LESS than what I got hired for in 2012, and will top out in 12 years at only a few more dollars than I would be making if the original VX payscale was still in place (both top(ped) out in the mid-$20s).


Check out the new CBA payscale:

https://atd142.org/wp-content/uploads/2 ... 8.2019.pdf
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
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vhtje
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Re: Why Virgin America Failed

Fri Jul 19, 2019 10:58 pm

jasoncrh wrote:
To pluralize the word "recliner," simply add an s. adding 's makes it possessive, which doesn't make sense. Also, why did you capitalize the word "recliner"? It's not a proper noun.


You are my hero. I love you. I visit airliners.net every day and have for over 15 years. The plethora of punctuation, grammatical and spelling mistakes give me heartburn. My one comfort is that many posters are not native English speakers.

I flew VS a few times, being based in San Francisco for a couple of years. I personally found the sexy-short-skirts-high-heels-and-red-pouty-lips schtick old fashioned and out of step with the times; I am not interested in opening a feminist argument, but I truthfully found it distasteful. It made me think of creepy old 1970s motor shows where women in bikinis were made to lie on the bonnets of the shiny new cars.

Was VS profitable? No. Did it fail? Well, it made its investors money, so, no. I think AS will do well out of its investment. Define ‘failure’ again?
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
santi319
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Re: Why Virgin America Failed

Fri Jul 19, 2019 11:34 pm

It never ceases to amaze me the people that complain how they were not lowkey begged to get a drink or a snack by the cart service, or when they ordered through the IFE and they didnt bring you the stuff “with the best attitude”.

You wanna be pampered and splurged? Hire a private Gulfstream like the big boys do.
 
strfyr51
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Re: Why Virgin America Failed

Fri Jul 19, 2019 11:44 pm

VX got bought out BECAUSE they were a prime takeover target ! They had Potential! Had JBLU bought them out? JBLU would have been the NEXT "big deal"
 
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longhauler
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Re: Why Virgin America Failed

Sat Jul 20, 2019 12:01 am

santi319 wrote:
It never ceases to amaze me the people that complain how they were not lowkey begged to get a drink or a snack by the cart service, or when they ordered through the IFE and they didnt bring you the stuff “with the best attitude”.

You wanna be pampered and splurged? Hire a private Gulfstream like the big boys do.


Or ... go fly Southwest Airlines and you'll get served with a great attitude. Bottom line is that it IS a service industry and everyone is aware of that. Not just airlines, but passengers as well. Aloof attitude, arrogance and fake condescension may work in a New York restaurant, but it got old very quickly on their aircraft.

Virgin America came out of the gate ahead of the pack, but fell behind very very quickly.
Just because I stopped arguing, doesn't mean I think you are right. It just means I gave up!
 
LAXBUR
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Re: Why Virgin America Failed

Sat Jul 20, 2019 5:10 am

santi319 wrote:
It never ceases to amaze me the people that complain how they were not lowkey begged to get a drink or a snack by the cart service, or when they ordered through the IFE and they didnt bring you the stuff “with the best attitude”.

You wanna be pampered and splurged? Hire a private Gulfstream like the big boys do.


Oh so having someone be friendly to you is considered something only the rich are allowed to experience now? No wonder this country is such a trainwreck. These type of stupid masochistic attitudes.
 
dampfnudel
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Re: Why Virgin America Failed

Sat Jul 20, 2019 5:26 am

If it was truly a failure, Alaska would’ve never purchased it. At least that’s my opinion.
A313 332 343 B703 712 722 732 73G 738 739 741 742 744 752 762 76E 764 772 AT5 CR9 D10 DHH DHT F27 GRM L10 M83 TU5

AA AI CO CL DE DL EA HA KL LH N7 PA PQ SK RO TW UA YR
 
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PacoMartin
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Re: Why Virgin America Failed

Sat Jul 20, 2019 7:59 am

strfyr51 wrote:
VX got bought out BECAUSE they were a prime takeover target ! They had Potential! Had JBLU bought them out? JBLU would Ihave been the NEXT "big deal"

In 1Q2019 JBLU's operating revenue increased by $117 million (to $1,871m from $1,754m)
but their operating expenses increased by $166 million (to $1,795m from $1,629m).

In 1Q2019 Alaska Airlines's operating revenue increased by $44 million (to $1,876m from $1,832m)
but their operating expenses increased by $48 million (to $1,851m from $1,803m).

With both airline's increasing costs faster than revenue, and with their relatively small net income, they are both subject to a potential takeover or a merger. But neither airlines is failing.

2018 Net income in millions $
$3,935 Delta
$2,465 Southwest
$2,129 United/Continental
$1,412 American
$437.0 Alaska Air
$280.4 SkyWest
$233.2 Hawaiian
$188.0 JetBlue
$155.7 Spirit
 
snasteve
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Re: Why Virgin America Failed

Sat Jul 20, 2019 8:49 am

UALFAson wrote:
WOW, you're going to open a can of worms with this topic! I would suggest you use the search function as there were plenty of threads discussing this at the time.

Essentially, Virgin America was too much of a niche airline with too limited of a route network. It was a "fun" product and appealed to a lot of often Millennial and/or hipster tech types. But they couldn't attract a revenue premium for their product, they had too limited of a route network to have widespread appeal to corporate travelers outside of maybe those traveling between the coasts, and/but in that case, their First Class product got surpassed by B6/UA/DL/AA who all started offering lie-flat seats on transcons, which VX did not.

I am sure others can offer more detailed input, but that's a nutshell.


Why is corporate American so bland and unappealing? I’m not a hipster and would always fly them vs the legacies. Not because they were fun, but because they were just plain better. Any fun element was merely a bonus.
 
snasteve
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Re: Why Virgin America Failed

Sat Jul 20, 2019 8:53 am

vhtje wrote:
jasoncrh wrote:
To pluralize the word "recliner," simply add an s. adding 's makes it possessive, which doesn't make sense. Also, why did you capitalize the word "recliner"? It's not a proper noun.


You are my hero. I love you. I visit airliners.net every day and have for over 15 years. The plethora of punctuation, grammatical and spelling mistakes give me heartburn. My one comfort is that many posters are not native English speakers.

I flew VS a few times, being based in San Francisco for a couple of years. I personally found the sexy-short-skirts-high-heels-and-red-pouty-lips schtick old fashioned and out of step with the times; I am not interested in opening a feminist argument, but I truthfully found it distasteful. It made me think of creepy old 1970s motor shows where women in bikinis were made to lie on the bonnets of the shiny new cars.

Was VS profitable? No. Did it fail? Well, it made its investors money, so, no. I think AS will do well out of its investment. Define ‘failure’ again?


Really? Are flight attendants permitted to even have on heels? Won’t Stilettos puncture the slide?
 
User avatar
vhtje
Posts: 971
Joined: Sat Jan 10, 2009 12:40 pm

Re: Why Virgin America Failed

Sat Jul 20, 2019 9:18 am

snasteve wrote:

Really? Are flight attendants permitted to even have on heels? Won’t Stilettos puncture the slide?


Well, they certainly wore them on VX (apologies for the poor quality):

Image
I only turn left when boarding aircraft. Well, mostly. All right, sometimes. OH OKAY - rarely.
 
MIflyer12
Posts: 5390
Joined: Mon Feb 18, 2013 11:58 pm

Re: Why Virgin America Failed

Sat Jul 20, 2019 11:58 am

VS11 wrote:
Virgin America did not fail. Nobody pays billions for a failing business.



AA bought TWA's assets out of bankruptcy for $500 million. Are you going to argue that TWA didn't fail? Failed businesses can have positive liquidation values. Liquidating VX is significantly what AS has done. A320 transcons with recliners? Toast, replaced by 739s with domestic F. Red? Toast. The DAL scissor? Toast.
 
jfk777
Posts: 6973
Joined: Tue Aug 22, 2006 7:23 am

Re: Why Virgin America Failed

Sat Jul 20, 2019 12:15 pm

Virgin America was sold for about $ 2.6 Billion to Alaska in an auction with JetBlue. The first years Virgin lost tons of $ but when it was sold it was making $. Virgin America was a going concern it was not bankrupt when sold.
 
VS11
Posts: 1432
Joined: Mon Jul 02, 2001 6:34 am

Re: Why Virgin America Failed

Sat Jul 20, 2019 1:17 pm

MIflyer12 wrote:
VS11 wrote:
Virgin America did not fail. Nobody pays billions for a failing business.



AA bought TWA's assets out of bankruptcy for $500 million. Are you going to argue that TWA didn't fail? Failed businesses can have positive liquidation values. Liquidating VX is significantly what AS has done. A320 transcons with recliners? Toast, replaced by 739s with domestic F. Red? Toast. The DAL scissor? Toast.


Virgin America was not in bankruptcy so not sure why you are bringing bankruptcy up. It may not suit your narrative but Virgin America delivered largely as expected for its investors: the financial investors cashed out, which they were always going to do and Richard Branson is still getting a royalty just as he would have been with independent VX. Virgin America customers may miss its product but the venture largely delivered for its investors as expected so no, it was not a failure.
 
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msp747
Posts: 399
Joined: Sat May 29, 2010 6:42 pm

Re: Why Virgin America Failed

Sat Jul 20, 2019 4:46 pm

VS11 wrote:
Richard Branson is still getting a royalty just as he would have been with independent VX.

What royalty is Branson getting? The Virgin America name has been retired and the entire fleet repainted. Even the small logos on the "More to Love" planes have been removed. I don't see what AS would still owe him.
 
EvanWSFO
Posts: 1119
Joined: Sun Mar 04, 2018 9:22 pm

Re: Why Virgin America Failed

Sat Jul 20, 2019 5:44 pm

KlimaBXsst wrote:
Yes failed may be too strong of a word. Did not succeed as an independent stand alone carrier may be a more apt description.

Virgin American did succeed at keeping many airline industry veterans gainfully employed during the economic disaster of the Obama era and post 9/11 merger upheavals. Some industry aircrew veterans even managed to get slotted in terms of years they had at Virgin American, ahead of others at Alaska Air Group, while the vast majority of others got only just their worked years of service they had done with Branson’s American dream.

So this is actually one way for those who invested their time with Virgin America gamble, saw success by seeking employment with this start up. Why did JetBlue succeed as a stand alone carrier while Virgin America did not; might help answer the question of Virgin’s successes and failures when phrasing this question for more complete answers to topic.


Maybe you should stick to things you have knowledge of? Not a brilliant comment.
I have been on this site 15 years. A unrecoverable email account led me to starting over. Those of you who call me a rookie, you may stop ok?
 
VS11
Posts: 1432
Joined: Mon Jul 02, 2001 6:34 am

Re: Why Virgin America Failed

Sat Jul 20, 2019 6:53 pm

msp747 wrote:
VS11 wrote:
Richard Branson is still getting a royalty just as he would have been with independent VX.

What royalty is Branson getting? The Virgin America name has been retired and the entire fleet repainted. Even the small logos on the "More to Love" planes have been removed. I don't see what AS would still owe him.


I don't know the actual amount and neither party is disclosing the amount but Virgin Group confirmed royalties are paid. The branding agreement runs for 25 years until 2039 and it was in place before the Alaska Airlines purchase. It was disclosed in the Virgin America IPO docs. I can only assume the royalty agreement was meant to survive any change of Virgin America ownership.

From bloomberg - June 3, 2019

"....Alaska is still paying an undisclosed fee to Virgin Group for using it.

A Virgin Group spokeswoman, Michelle Mendiola, said terms of the agreement with Alaska are confidential. “Alaska are paying royalties which enable them to use it, but how or when they do would be to their discretion,” Mendiola said in an email. An Alaska spokeswoman said the company is no longer using the Virgin brand but declined to discuss the topic further.

...the Virgin America name could return to the U.S. The U.S. carrier agreed to a 25-year branding relationship with Virgin Group, which would potentially leave Alaska with rights to the brand until 2039.

“There is a chance we could use the Virgin America brand in some form down the road,” Alaska Chief Executive Brad Tilden said in April 2016 announcing the acquisition."

https://www.bloomberg.com/news/articles ... on-s-dream
 
KlimaBXsst
Posts: 322
Joined: Wed Jan 23, 2019 4:14 pm

Re: Why Virgin America Failed

Sat Jul 20, 2019 9:34 pm

EvanWSFO wrote:
KlimaBXsst wrote:
Yes failed may be too strong of a word. Did not succeed as an independent stand alone carrier may be a more apt description.

Virgin American did succeed at keeping many airline industry veterans gainfully employed during the economic disaster of the Obama era and post 9/11 merger upheavals. Some industry aircrew veterans even managed to get slotted in terms of years they had at Virgin American, ahead of others at Alaska Air Group, while the vast majority of others got only just their worked years of service they had done with Branson’s American dream.

So this is actually one way for those who invested their time with Virgin America gamble, saw success by seeking employment with this start up. Why did JetBlue succeed as a stand alone carrier while Virgin America did not; might help answer the question of Virgin’s successes and failures when phrasing this question for more complete answers to topic.


Maybe you should stick to things you have knowledge of? Not a brilliant comment.


Before you get sassy, it is my understanding that the Virgin American people non rev on any Alaska flight at a priority higher than any Alaska Air Group Horizon employee.

Secondly many Alaska pilots lost seniority to less experienced junior pilots at Virgin American.

Thirdly many Virgin Pilots would have never made the Alaska cut as they did not have a university degree - a requirement to be hired at the pre merger Alaska .... so before you get sassy with me you may want to check your self.
Aesthetically the A 340 got it right!
 
EvanWSFO
Posts: 1119
Joined: Sun Mar 04, 2018 9:22 pm

Re: Why Virgin America Failed

Sat Jul 20, 2019 9:47 pm

This seems to indicate otherwise re: your claim that VX pilots got seniority over AS pilots. Please feel free to provide proof otherwise. http://www.rubydatasystems.com/ala_vrd.html

Also, who uses the word 'sassy' anymore?
I have been on this site 15 years. A unrecoverable email account led me to starting over. Those of you who call me a rookie, you may stop ok?
 
User avatar
EA CO AS
Posts: 15366
Joined: Wed Nov 14, 2001 8:54 am

Re: Why Virgin America Failed

Sat Jul 20, 2019 10:03 pm

KlimaBXsst wrote:
Before you get sassy, it is my understanding that the Virgin American people non rev on any Alaska flight at a priority higher than any Alaska Air Group Horizon employee.



First, it was Virgin America, not Virgin American.

Second, there are no Virgin America people anymore. They are employees of Alaska Airlines.

Third, all AS employees board AS flights at a higher priority than QX people do. Similarly, QX people board QX flights at a higher priority than AS people do. (Non-revving, that is)
"In this present crisis, government is not the solution to our problem - government IS the problem." - Ronald Reagan

Comments made here are my own and are not intended to represent the official position of Alaska Air Group
 
ASFlyer
Posts: 1643
Joined: Sat May 28, 2005 1:25 pm

Re: Why Virgin America Failed

Sun Jul 21, 2019 6:33 am

EA CO AS wrote:
san747 wrote:
But I do know that the AS unionized CSAs are being hired today to do that same job (in fact, do MORE, because there's a lot of stuff AS has their CSAs do that I never had to deal with at VX) for LESS than what I got hired for in 2012, and will top out in 12 years at only a few more dollars than I would be making if the original VX payscale was still in place (both top(ped) out in the mid-$20s).


Check out the new CBA payscale:

https://atd142.org/wp-content/uploads/2 ... 8.2019.pdf


Nothing like facts. The VX FA's have been running around complaining about how they make so much less at AS, meanwhile they were the worst paid mainline carrier (save for maybe Frontier) in the U.S. with hideous work rules. Just like the FA's, the CSA's got generous raises through this buyout.
 
USAirKid
Posts: 463
Joined: Mon Jun 13, 2016 5:42 am

Re: Why Virgin America Failed

Sun Jul 21, 2019 7:14 am

VS11 wrote:

I don't know the actual amount and neither party is disclosing the amount but Virgin Group confirmed royalties are paid. The branding agreement runs for 25 years until 2039 and it was in place before the Alaska Airlines purchase. It was disclosed in the Virgin America IPO docs. I can only assume the royalty agreement was meant to survive any change of Virgin America Ownership.


If I had to guess I’m betting they’re paying royalties for elements in the pm-VX interiors. From the same article:
Alaska is still working to convert all of the former Virgin interiors, a task it expects to complete by next spring.


As for the royalty agreement I’d expect the lawyers can find their way out of it after AS stops using the VX brand elements inside the planes, even if they had to do something extreme like putting the VX subsidiary into bankruptcy to have the contract canceled.

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