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Alaska-Virgin America Merger Begets Sadness, Skepticism

SmarterTravel

According to the just-released Airline Quality Rating study, Virgin America is the country’s best airline. Of the 13 airlines ranked in the study, Alaska Airlines was rated fifth.

Only time will tell what happens when the best airline is folded into the fifth-best airline. What we do know, now, is how various interested parties—customers, owners, managers, employees—are reacting to Monday’s announcement that Alaska will buy Virgin America for $2.6 billion.

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For his part, Sir Richard Branson, founder of the Virgin brand and a non-voting minority stockholder in Virgin America, was less than enthusiastic about the merger.

I would be lying if I didn’t admit sadness that our wonderful airline is merging with another. Because I’m not American, the US Department of Transportation stipulated I take some of my shares in Virgin America as non-voting shares, reducing my influence over any takeover. So there was sadly nothing I could do to stop it.

A Virgin America employee responded to Branson with her own sadness: “Thank you Mr. Branson for giving us the opportunity to be apart of such an amazing brand. It has been such an adventure working with Virgin America. We are all so saddened by our CEO’s decision.”

Many Virgin customers were deflated by the news as well.

I know Alaska. I’ve flown Alaska. But Alaska ain’t no Virgin America…

Hoping that this doesn’t change how this wonderful airline operates!! Sir Richard began what will always be the best airline around!

Mr. Branson. Thank you for helping make VA a reality. I’m very disheartened about this merger, it’s like a third world country buying the ruling government of a developed and thriving nation. I do not expect to see the brand or any remnants of VA within a few months of approval. I have worked with Alaska and I do not have any confidence that they would even consider the customer experience as they grind every penny out of already dissatisfied customers. The only thing they want is your routes and gates.

… Please Mr. Branson, if the Virgin America brand dies under this merger with an inferior Alaskan Airlines, start again. Give us a new Virgin option.

Elsewhere, travelers on FlyerTalk were similarly dismayed by the prospect of Virgin’s acquisition by Alaska:

Enjoy the product and Virgin experience while it lasts.

Time to redeem all my Elevate points, stop using the CC, and move on. I have no interest in AS, at all.

Virgin America shareholders can only be thrilled with the merger, as the airline’s stock price has soared by 41.7 percent following the deal’s announcement. Shares of Alaska Airlines, on the other hand, are down 2.9 percent on the news—reflecting investors’ unease concerning the lofty purchase price, the credibility of projected cost and revenue synergies, or both.

While customers, employees, and investors are generally downbeat about the merger—and the disappearance of Virgin America as a going concern, in particular—the CEOs of both carriers are predictably gung-ho.

David Cush, Virgin America’s chief, enthused thusly in an email to members of the company’s Elevate program:

With complementary West Coast-based networks and similar cultures focused on guest service and operational efficiency, the joining of the two carriers will not only create a stronger and more competitive airline, it will create a leading guest experience for travelers like you—while also significantly expanding your flying options across a larger network of destinations in North America and across Alaska Airlines’ robust international partner network.

And, following the same script, Alaska’s Brad Tilden had this to offer:

Alaska and Virgin America are two great airlines that consistently deliver low fares and an outstanding customer experience. By bringing them together, we are creating the premier airline for people who live anywhere on the West Coast.

For now, such promises are being met with skepticism by many of those with a stake in the merger’s outcome.

Reader Reality Check

How do you feel about the Alaska-Virgin America merger?

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After 20 years working in the travel industry, and 15 years writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.

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