WhenHub - Virgin America & Alaska Air Merger

Virgin America & Alaska Air Merger

1930's - Birth of Alaska Air

1930
N\A
N/A

The company that Alaska grew out of to become Alaska Airlines was born in 1932 when Linious "Mac" McGee painted "McGee Airways" on the side of a three-passenger Stinson and started flying out of Anchorage. In 1934 McGee merged with Star Air Service, creating the largest airline in Alaska with 22 aircraft. Flying in those days wasn't scheduled. You typically flew once the plane was full, whether it was full of passengers, furs, or groceries. Finances were tight, but perseverance ruled the day. Business expanded in ‘37 with the purchase of Alaska Interior Airlines. Late that year, McGee sold Star to a group led by one of his former pilots, Don Goodman, who renamed the carrier Star Air Lines. The 1938 creation of the Civil Aeronautics Authority to regulate airlines signaled the end of the true bush-flying era.

1940's

1944
N\A
N/A

Star Air Lines received most of the routes it wanted from the CAA but was denied the coveted Alaska/Seattle run. That went to Pan American. Star bought three small Alaskan carriers in 1942, changed its name to Alaska Star Airlines and then to Alaska Airlines in 1944. The company grew despite a shortage of workers during the war, feuds with the CAB, and cash troubles that had employees paying for fuel out of their own pockets. In the late ‘40s, charter operations overshadowed scheduled service, and Alaska became the largest charter operator in the world. Using surplus military aircraft, they flew everywhere, carrying food in the Berlin Airlift and refugees to the settlement of Israel.

1950's

1950
N\A
N/A

The airline expanded in 1950 with the purchase of two more small Alaskan carriers. Under CAB mandate, the far-flung charter business of the ‘40s had ended. But, the dream came true in ‘51, when they received authority to fly from Anchorage and Fairbanks to Seattle and Portland. The CAB forced what it considered a business-saving change in management a short time later. As a result, the airlines’ financial footing was improved, though still tenuous, when Charlie Willis, a decorated World War II pilot came aboard as chairman and CEO in ‘57. A born marketer, he ushered in one of the most colorful eras of the company’s history and brought in-flight movies to the nation's skies for the first time.

1960's

1960
N\A
N/A

While they were only coming into the jet age at Alaska Airlines in the 1960s, the marketing age was in full stride. Flight attendants wore Gay ‘90s and Russian Cossack costumes. Charters were flying to Russia and in-flight announcements were turned to rhymes.


A life vest neat is beneath each seat. They're stored so we won't lose ‘em. Now fix your eyes on the stewardies. They'll show you how to use ‘em.


At Alaska Airlines, they became the first commercial carrier to fly the Lockheed Hercules, hauling drilling rigs to Alaska's oil-rich North Slope and later to the jungles of Ecuador. The Boeing 727, the company's signature aircraft for 25 years, joined the fleet in the mid-60s. They debuted in Southeast Alaska at Sitka in ‘67 and a year later merged with two long-time Southeast airlines, Alaska Coastal-Ellis and Cordova.

1970's

1970
N\A
N/A

Alaska was on the brink of collapse when the Board prescribed a change in management in 1972. A new team, led by Ron Cosgrave, took the helm. The financially faltering ship was righted and pains were taken to improve customer service, in particular on-time performance. In ‘73 the company turned a profit and, for the first time in years, there appeared to be prospects for long-term stability. Bruce Kennedy, an integral part of Cosgrave’s team, became CEO in ‘79, the same year U.S. skies were deregulated. Alaska was one of only three carriers that pushed for deregulation, knowing significant growth would be impossible without it. At the time, the airline served 10 cities in Alaska and one (Seattle) in the lower 48. Their fleet consisted of only ten aircraft at the time.

1980's

1980
N\A
N/A

Alaska Air expanded in a measured, yet opportunistic fashion throughout the 1980s. Following the ‘79 start of service to Portland and San Francisco, expansion over the next five years brought Alaska to Southern California, Oakland, San Jose, Spokane, Boise, Phoenix and Tucson and saw resumption of service to Nome and Kotzebue. Revenues and profits soared. Alaska Air Group was formed in ‘85 as a holding company for the airline and a year later acquired Horizon Air and Jet America Airlines. In a move bolstering their north-south route structure and complementing the seasonal nature of travel to Alaska, they launched service to Mexico in 1988. Growth in their route schedule there has been dramatic.

1990's

1990
N\A
N/A

With the growing success of low-cost/low-fare carriers, the airline industry changed in fundamental ways in the 90s. Streamlining its cost structure and increasing aircraft utilization. At Alaska Airlines, they reshaped themselves faster and more comprehensively than any carrier—all while maintaining a competitive advantage in customer service. The new motto, "For the same price, you just get more," resonated with customers. When coupled with an unmatched market presence on the West Coast, this recipe added up to record passenger traffic and greater profitability.

2000's

2000
N\A
N/A

This decade saw them stretch their wings across the Lower 48 to Boston, Chicago, Dallas, Denver, Miami, Newark, Orlando, and Washington D.C. They have also crossed the Pacific with much-heralded service to the Hawaiian Islands and added more destinations in Mexico. The transition to an expanded, all-Boeing 737 fleet means greater fuel savings, other efficiencies, and continued respect for the environment.

2010's

2010
N\A
N/A

In keeping with the priorities of this decade, Alaska have refocused their efforts to carry on their legacy of technological innovation, customer first thinking, and 2 way customer communication via Social Media. Technological achievements have punctuated their company’s history and these past years have been no exception. Since 2010 and the creation of their customer innovation department they have launched mobile apps across all platforms, replaced our pilots paperwork with iPads, spearheaded self bag-tagging, were the first airline to accept Google Wallet, and implemented biometric identification in their Boardroom lounges. They continue to look forward and are committed to carrying on their long history of leading the airline industry.

2004-2006: Birth of Virgin America (VA)

2004
2006
N\A
N/A

In early 2004, Virgin Group announced its intention to found a United States-based, low-fare airline called "Virgin USA". At the time, Virgin USA expected flights to begin by mid-2005. After considering several key areas, the San Francisco Bay Area was chosen as the location of its flight operations center and later as its corporate headquarters. The airline changed its name from "Virgin USA" to "Virgin America" and due to the difficulty in finding U.S. investors willing to gamble on a new airline in an already congested industry, the launch date was pushed back from mid-2005 to early 2006.


Virgin America secured U.S. investors Black Canyon Capital and Cyrus Capital Partners in late 2005. Once the new owners were on board, Virgin’s General Counsel submitted the required U.S. Department of Transportation certificate application on December 9, 2005.



VA Inaugural Flight

2007
N\A
N/A

Virgin America began selling tickets in July 2007. On August 8, 2007 the airline made its inaugural New York and Los Angeles to San Francisco flights - the aircraft were named "Air Colbert", after comedian Stephen Colbert and "California Dreaming"

VA - Free WiFi Service

2009
N\A
N/A

On May 21, 2009, Virgin America became the first U.S. airline to offer Wi-Fi access via Gogo Inflight Internet on every flight. Between November 10, 2009, and January 15, 2010, the airline offered free WiFi with a subsidy from Google.

VA - Flights to Toronto, Canada and Dallas

2010
N\A
N/A

In March 2010, Virgin America announced its intention to start flying to Toronto from Los Angeles and San Francisco, making it the airline's first international destination. Following the Department of Transportation's approval of Virgin America's proposal to fly to Canada, international service began on June 29, 2010. However, due to high operating costs and higher demand for Dallas/Fort-Worth, Virgin America terminated Toronto service on April 6, 2011. Virgin America began its service to Dallas/Fort Worth International Airport in December 2010, and continued until after the repeal of the Wright Amendment in October 2014, which prompted the airline to establish a focus city at the Dallas Love Field and enhance the number of connecting destinations. As a result, Virgin America transported almost 31,000 passengers through Dallas Love Field in the first month, achieving 3.58% market share at Dallas Love Field.

2011-2012: VA - Expansion

2011
2012
N\A
N/A

Virgin America announced in January 2011 a firm order for sixty new Airbus A320 aircraft, including thirty new Airbus A320neos, that would be delivered starting in 2016, as a formal expansion of an initial commitment made by Richard Branson at the Farnborough Airshow in July 2010. In April 2011, Virgin America's hub at San Francisco International Airport relocated to the newly remodeled Terminal 2, sharing the gates with American Airlines.


On December 12, 2012, Virgin America opened their first airport lounge, the Virgin America Loft, at Los Angeles International Airport.  

VA - IPO

2014
N\A
N/A

Virgin America had its first public offering at the NASDAQ stock exchange on November 14, 2014, selling 13.3M shares to raise $307 million for the company.

2015 - Present: Virgin America & Alaska Air Merger

2015
2017
N\A
N/A

A number of airlines interested in a takeover of Virgin America reached out to the airline in late . Alaska Air Group and JetBlue Airways were the two most interested companies to make offers to purchase the airline from Virgin Group. In December 2015, Alaska was interested at $44.75 per share, before JetBlue manifested its interest in February 2016. A bidding war ensued culminating on March 31 and April 1 at $57 per share, 47% higher than the day's closure at $38.9. On April 4, 2016, Alaska Air Group announced that it had agreed to buy Virgin America for $2.6 billion. Including debt and aircraft leases, the transaction was worth approximately $4 billion. Had the merger agreement been terminated by Virgin America, they would have been contractually obligated to pay Alaska Air Group a termination fee equal to $78.5 million.


Virgin America's founder Richard Branson expressed disappointment with the merger between Alaska Airlines and the airline he founded. In July 2016, Virgin America's shareholders approved the merger. In September 2016, a lawsuit was filed against Alaska Airlines by consumers to block the merger between the two carriers, which the Alaska Air Group settled in court in December 2016. Subsequently, the Department of Justice approved the merger, which was completed on December 14. Following the acquisition, the former chief financial officer of Alaska Airlines, Peter Hunt, became the president of Virgin America, while the former chief operating officer and president of Alaska Airlines, Ben Minicucci, became the chief executive officer.

Virgin America is scheduled to be the launch customer for the Airbus A321neo, with the airline placing a firm order for 10 aircraft through leasing company GE Capital Aviation Services. In early February 2017, Alaska Air Group said it was working with GE on an arrangement where it won't take delivery of all 10 jets, in favor of keeping a predominantly Boeing fleet. As of the end of February 2017, Airbus has removed Virgin America from its order book.


On March 22, 2017, the Alaska Air Group announced that the Virgin America brand would be retired "sometime in 2019." As part of the merger, some of Virgin's amenities will be integrated into Alaska's product.The Alaska group was licensing the Virgin America name from Virgin Group. Branson indicated a willingness to relaunch the airline after the Virgin America brand is retired.