Alaska Airlines, Virgin America unite; change is coming for everyone

The deal is done. Virgin America is no longer an independent airline. The Alaska Airlines buyout officially closed today, creating a combined airline that offers nearly 1,200 daily flights to 118 destinations (only 2 more than Alaska had on its own) across the United States, Mexico, Canada, Costa Rica and Cuba (coming soon). The carrier also officially unveiled its merger livery aircraft and announced some alignment of the loyalty programs and flight purchase process.

Win tickets from Alaska Airlines celebrating the merger

Getting to closure in the merger involved the usual government reviews for competition and anti-trust purposes. The last of those hurdles was cleared a week ago with the agreement that Alaska would terminate its codeshare on some American Airlines flights. That stipulation was interesting in that it ignored the Delta Air Lines codeshare (a partnership teetering towards dissolution anyways) and also in that it only affects a small number of routes. By limiting the cuts generally to overlapping service and hub-to-hub operations the DoJ offers consumers a small bit of relief on the competition front but also leaves Alaska (and American) in reasonably strong positions going forward.

From an integration perspective the new company faces plenty of challenges. The two airlines operate under very different cultures and they know it. Much of the marketing today surrounding the deal has focused on message “Different Works,” suggesting that even with the differences the end result can ultimately be a successful one. Figuring out the mixed fleet and overall branding message are two open items on the checklist that the company is not offering any insight on today; it is unclear if the “Proudly all Boeing” slogan on the company’s 737s will now be removed as the carrier expects to operate the mixed fleet for the foreseeable future. The combo livery does not have the tag line on its nose.

The two carriers will have certain benefits of their loyalty programs available within a week. According to the release, “Starting Dec. 19, Virgin America Elevate members and Alaska Airlines Mileage Plan members can earn rewards on each other’s flights; elite members will receive priority check-in and priority boarding on each other’s flights.” Alas, full details remain elusive as the websites have not been updated with earning rates. And given that the two programs operate differently (distance v revenue-based) that could open up some interesting opportunities. January 9th is the next major milestone for the loyalty programs. At that time Elevate members will begin the migration into the Mileage Plan program and other integration will follow, including reciprocal redemption opportunities.

As for how the two cultures will integrate, that remains a huge question mark. They’re definitely trying but even the photo of the combined crew celebrating in San Francisco looks like an awkward mix to me. This one is going to take some time to get through. And the competition isn’t slowing down along the way.

Header image courtesy of Alaska Airlines Group

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Seth Miller

I'm Seth, also known as the Wandering Aramean. I was bit by the travel bug 30 years ago and there's no sign of a cure. I fly ~200,000 miles annually; these are my stories. You can connect with me on Twitter, Facebook, and LinkedIn.