Richard Branson contemplating competing airline after Virgin America merger with Alaska Airlines
According to Condé Nast Traveler, Virgin Group founder, Sir Richard Branson, affirmed his commitment in keeping the Virgin America brand alive and will consider launching a competing airline, carrying on the Virgin name, even if it means starting from square one again. This week, the Burlingame, California-based airline announced it was being acquired by Seattle-based Alaska Airlines, making it the nation’s 5th largest airline. At present, it is unknown whether or not Alaska will keep the Virgin brand name or fold it into the company the same way Delta Air Lines did when it merged with Northwest Airlines.
“People love Virgin with a passion that hasn’t existed since the early days of aviation, and I am certainly not going to let it go to waste, even if it means starting all over again,” Branson said in the interview.
Ideally, according to Branson, Alaska will consider Virgin as an independent offshoot within the larger structure and “help Alaska with what’s it doing” and “build it into the strongest and sexiest airline in America.”
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Branson was unable to block any sale noting that, since he is a British citizen, the US Department of Transportation stipulated that some of his shares be non-voting, which mitigated his influence. He abstained for voting his shares supporting the merger to make it “clear that we would have rather stayed independent.” Branson has no stake in Alaska, though he “begged the board” to allow him to take stock instead of cash.
One sticking point is that Alaska has exclusive access to the Virgin brand in the US under the existing licensing agreement. If the agreement is bullet-proof, Branson may not be able to relaunch a Virgin-branded competitor anyway. Further, Branson dealt with some bad blood from Alaska when Virgin was working to get off the ground in the US, which may inform his displeasure noting that “Alaska and a number of other airlines dragged us through the mire” as it was seeking regulatory approval.
Another challenge is operational. Alaska runs an entirely Boeing fleet (except on regional routes) and Virgin America is exclusively Airbus.
According to the Seattle Business Journal, if Branson does indeed decide to move forward with a new airline, he will likely have to partner with an existing, large US carrier to get access to gates. One intriguing option is Delta, who has been in a protracted battle in Seattle with Alaska, stemming from the former’s expansion in the market.
Despite the rancor, Branson mentioned that he has met with the Alaska management and offered to continue being the lead ambassador for the Virgin America brand. “I have been to every inaugural flight of Virgin America, and I am happy to do that and anything I can.”
Branson, according to the article, says that he is committed to making the merger viable, but is willing to pull the trigger on a new airline if it comes to that.
“But I don’t want to have to do that again. There are so many challenges in life to be done, and I’d much rather [Alaska] realize what they bought. Alaska needs Virgin America.”