Virgin America Deconstructed – Part 2
Part 2 of my post for Virgin America Deconstructed. Click here for part 1.
With the ending of 2017 we will see Alaska Airlines shut down Virgin America’s Elevate loyalty program. The Alaska Airlines Mileage Plan program with its mileage based earning rates and wide range of redemption partners has received very favorable press. The Elevate program is revue based and with the partnership end dates announce the program won’t have much residue value after September 30th of 2017. Even so, there were some strong points when the program was independent and I personally liked how easy it is to get to gold status when purchasing first class fares.
Everything considered, Virgin America Elevate members could do a lot worse than the Mileage Plan program they will inherit.
The last full year of Virgin America, 2018
The last full year of the Virgin America airline will be 2018, and in 2019 Alaska Airlines will discontinue using the Virgin America brand. A lot of the heavy dismantling of Virgin America is scheduled for 2018. Starting the year and to the average customer, Virgin America will look pretty much the same, minus the elevate program. Internally Alaska Airlines will be working to finish integrating Virgin America Elevate members into Alaska’s Mileage Plan, receiving a single operating certificate, negotiating a unified single labor agreement, and starting up a single passenger system (all the software for booking and maintaining flights). These are just the major items.
Another important subject has been the moving and re-gauging of Airbus A320s and Boeing 737s on specific routes. Being of high investor visibility, expect to see that change early 2018. Alaska Airlines is also planning on converting the first Virgin America Airbus’ with the new interior cabin design that was unveiled in April 2017 (scheduled fourth quarter 2018). As well, there is a good chance that in 2018 we’ll be introduced to the new uniforms for the combined airline with an adoption timeline.
January 10th, 2018 – All remaining Elevate points are converted into Mileage Plan miles
January 15th, 2018 – Last date of travel on Virgin America airline partners
March 1st, 2018 – Single Operating Certificate awarded to Alaska Airlines for combined airline
March 15th, 2018 – Existing Virgin America credit cards converted to Alaska Airlines Visa cards
March 15th, 2018 – Virgin America and Alaska combine most airport operations
June 1st, 2018 – Alaska Airlines introduces new uniforms
July 1st, 2018 – Alaska Airlines and Virgin America ratify single labor agreement
July25th, 2018 – Virgin America’s companion certificate discontinued
August 1st, 2018 – Fleet repositioning for 737 TRANCON routes announced
October 1st, 2018 – Virgin America ends access to Virgin Atlantic Clubhouse lounges
November 1st, 2018 – First Airbus with new cabin design
December 1st, 2018 – Single Passenger Service System Turn On
December 10th, 2018 – Virgin America app taken down
December 10th, 2018 – Virgin America website taken down
The second major item will be the award of a single operating license for the two airlines. Alaska has put a first quarter goal for this milestone, which is aggressive. A more realistic goal may be the end of summer of 2018. Still, if anything, Alaska Airlines has been aggressive and successful on their integration timetable.
I would also guess we would see the end of lounge access with Virgin Atlantic. I’m surprised it’s lasted this long, and it’s a benefit I will miss.
Final dissolution of Virgin America – 2019 and Beyond
Once Alaska Airlines has been issued a single operating license, and then migrated to a single passenger service system, Virgin America and Alaska Airlines flights will both be operated by Alaska Airlines. That will be the case as they enter 2019. Alaska Airlines will also start accelerating the Airbus conversions to the new cabin design. This will also be true of Alaska’s Boeings aircrafts, which not explicitly scheduled will probably start earlier that Virgin America’s Airbuses and take longer. It is expected that the final Virgin America aircraft converted will be the a321neo aircraft, because they are just being added to the fleet. At some point the last RED entertainment systems will be turned off and the last Virgin America meal will be served.
The biggest event of 2019 will be retirement of the Virgin America brand. Alaska Airlines will announce a date for this, and likely fly the last call letter VX flight soon after. There will likely still be Airbus’s with the Virgin America livery and/or new interior layout (like those a321neos). This will be the last items left of the old Virgin America, and the final ones to be cleaned up. These items could get pushed into 2020.
February 1st, 2019 – Virgin America food offering converted to Alaska Airlines
April 1st, 2019 – Virgin America Brand officially retired
May 2nd, 2019 – Last VX coded Virgin American Flight
July 1st, 2019 – Virgin America RED system discontinued
August 1st, 2020 – Last Virgin America livery retired
October 1st, 2020 – Last Virgin America ghost ship is converted to Alaska
In Summary:
Alaska Airlines and Virgin America are on their way to becoming a single combined airline. Virgin America may be reborn under Sir Richard, but until that happens the current Virgin America has numbered days, and Alaska Airlines will be the surviving entity.
When the acquisition was first announced, there was a lot of emotion with the news. A common theme was why did Alaska Airlines want to purchase an airline with such a different imagine than their own. In the words of Sir Richard “why bother” if they weren’t going to keep the beloved Virgin America brand.
For Alaska Airlines Virgin America represented a unique opportunity to acquire market share and scale. Alaska Airlines had a wakeup call in Seattle with Delta, and they realized that as a business they couldn’t trust their future to the fate of another airline. They couldn’t be a regional player any longer. The Virgin America purchase was an opportunity to grow fast in their own sandbox, the West Coast. For Alaska Airlines, the Virgin America acquisition was all about customers, gates and routes. That perspective answers a lot of the questions about this deal.
In mean time, we all get a front row seat at the dismantling of an interesting airline and business. We have the rest of this year with Elevate, all of 2018 with the airline still operating, and then 2019 with the final death of the Virgin America…… Long live Alaska Airlines.