Alaska Airlines executives admitted on the airline’s quarterly earning call last week that attracting more business travelers was a big reason it decided to go through with its pricey acquisition of Virgin America.
The airline’s strategy is to become a top choice for higher-spending travelers by combining Virgin’s strong corporate travel bonafides and higher-end leisure flyers with Alaska’s already robust domestic routes.
“We want to be the go-to airline for business travel up and down the West Coast,” said Alaska Airlines CFO Brandon Pederson. “But the [airline] business has just moved more and more towards leisure. And for leisure to work, you got to have a stronger economy business that seems to be doing well. You got to have people with money in their pockets buying tickets. We feel really good about this combination with Virgin because we’re really well set to serve the high end of that leisure market as well as the business market. So, we think we’re really in the sweet spot of where the demand is and even in the underserved segment of the market.”
Traditionally, Alaska Airlines has been strongest in corporate travel in the Pacific Northwest. The airline expects Virgin America’s strength in California to be a powerful asset once the acquisition is approved.
“Outside of Seattle, historically, we haven’t had a strong base for corporate travel. That certainly will change with the Virgin America acquisition,” said Joe Sprague, Alaska Airlines’ senior vice president of communications and external affairs. “We’re really excited to get smarter about what the opportunities are in SoCal and especially in the Bay areas, there are lot of overlapping some of the tech companies between Seattle and the Bay areas. We’ll have a little bit of a head start in the relationship there. So, I would just say that we don’t have exact numbers today, but that is going to evolve, and I think corporate will become a more important of our network going forward.”
In the longer term, CEO Brad Tilden said they expect to leverage a strong domestic business travel presence into the realm of international business travel.
“I think we will be bringing a very deep and rich portfolio of international carriers to California where we have also reciprocal benefits in earning and burning opportunities,” said Tilden. “So, we really see opportunity for the corporate both domestic and international travel as we move forward.”