Skift Take

While Alaska Airlines executives talked around whether they would eliminate the Virgin America brand and loyalty programs, the subtext indicates it's only a matter of time until Virgin America's fleet is rolled into the Alaska brand.

While many were hoping that JetBlue would win the quest to acquire Virgin America due to a similar focus on quality service, Alaska Airlines executives said on the company’s latest earnings call that they aren’t planning on throwing away Virgin’s reputation for quality service and robust loyalty offerings.

“In nine years [of operation], there was a tremendous amount of allegiance to the company,” said Brad Tilden, CEO of Alaska Airlines. “The biggest challenge for this leadership team is going to be bringing the customers together and that’s what we’re focused on. We’re going to go into this with a humble approach… and over 12 or 18 months make a decision about what’s best for our collective customers. We are aware of the value that company has brought to its customers; our goal is to use that as a foothold in the state of California. The long term idea isn’t to lose passengers, it’s to grow them over the 10 to 15 years in front of us.”

Tilden said that a visit with Virgin America employees last week didn’t exactly change his mind when it came to potentially keeping the Virgin America brand or loyalty programs in the long term.

“We did have a good meeting down there a week ago Tuesday with a huge turnout of Virgin employees,” said Tilden. “I don’t know that it changed our perception, but we did sense first-hand the loyalty those employees and customers have for the company. The big challenge in front of us is to get all the value out of this acquisition, [since] the bigger reason we’re doing this is to get a foothold in the state of California.”

Alaska expects to receive approval from the Department of Justice to go through with the acquisition soon.

“We’re excited to build the premier airline along the west coast,” said Tilden. “We’re hoping for swift clearance to close, which we expect within 60 days.”

Tilden did suggest that if the Department of Justice chooses to examine the deal with more scrutiny, he still expects the acquisition to close before the end of 2016.

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Tags: alaska airlines, earnings, virgin america

Photo credit: An Alaska Airlines plane leaving Portland, Ore. Eric Salard / Flickr

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