Could The Virgin America Brand Survive?
Photo courtesy of Virgin America
When Alaska Airlines won the auction for Virgin America two months ago, many loyal Virgin fliers worried that the airline would lose its image when Alaska officially took over. According to Alaska’s CEO, however, that brand change might not happen.
Will Virgin stay separate?
Alaska Air CEO Brad Tilden has said that his airline is considering running Virgin America as a separate airline. “We are looking at that because we do believe in the power of the Virgin America brand, and we don't want to lose all that loyalty and revenue that exists today.”
Tilden added that Alaska is “taking a good look at running two brands for some period of time, perhaps forever.”
Is this practical?
In the United States, such airline mergers usually mean the end of one airline’s brand. Southwest swallowed up AirTran, Delta ended the Northwest brand and American Airlines, most recently, replaced US Airways with its own AA brand.
Things have been different in Europe, however. Lufthansa owns SWISS and Austrian Airlines, but both these Central European carriers still operate under the own brand. IAG allows each of its airlines - including British Airways, Aer Lingus and Iberia - to operate independently despite the fact that they are all owned by the same company.
Value in Virgin's image
Because Virgin America has such a distinct brand and a loyal following, letting it keep its identity, for the most part, could be a good thing for the airline’s new owners.
Virgin has a hip image, high-tech features and cabins with attractive ambiance. Alaska, meanwhile, is a profitable airline that has its own loyal following and has earned high marks for customer satisfaction and on time performance.
At first glance, keeping Virgin intact seems like a good idea for Alaska. JetBlue, another carrier with a hip, tech-savvy image, has already launched promotions aimed at fliers who are looking for a Virgin replacement. Keeping the Virgin brand going would allow Alaska to keep these customers onboard.
But is it realistic?
This might not be a practical move, however. In order to make Virgin more profitable and get a return on its investment, Alaska may have to cut out some of the qualities that have earned Virgin its loyal following.
Alaska’s shareholders are already wary of the debt that Virgin brings to Alaska. They will be hoping that Alaska institutes its own operational practices and procedures so that Virgin becomes more profitable. Also, operating two brands would make it more difficult and confusing for employees, who might find themselves having to provide two different kinds of service despite the fact that they work for one company.
The most likely outcome
The most likely outcome, one might expect, is that Virgin will retain its name and some of its practices, but Alaska will make changes that will streamline Virgin’s operation. This could, perhaps, end some of the features and services that make the airline unique.
So Virgin will still be recognizable, but it will not be exactly the same as it is now.
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