Admittedly, earlier this month when I read the news that the powerful and cash rich Virgin Airlines was being purchased by Alaska Airlines (not the reverse) I was shocked. With a cash bid of $2.6B+ the message was loud and clear: 1) lower cost, big service sexy flying has hit atmospheric levels in more ways than one and, 2) the California gold rush is as relevant today as it was in the 19th Century.
With a continued focus on customer service this new partnership has an even bigger differentiating factor and the opportunity to be disruptive globally. We love that! On the cost side of the business, both companies have solid reputations. And, energy prices are extremely low today (no passé January cauliflower jokes here).
When so many of us travel regularly for business, we really only want these 3 things: to arrive on time, in one piece (safety counts) and for the best price possible (companies have budgets too).
We flew direct from Austin to LA on American Airlines for a 1 day luxury real estate conference earlier this month. A business partner flew Virgin Airlines direct to San Fran for tech meetings prior to meeting us in LA. His airline experience was flawless... as was ours. Price points were similar and all in-flight technology needs were met (wifi, device charger port, movie) and reclining seats. Healthy airline competition will continue on all fronts and we love that.
How The West Will Be Won: Austin - Silicon Valley Flights
If you live in Austin you know that we mine “technology” and red hot tech start ups. Austin has been referred to as “Silicon Valley 2” as our very own tech community continues to transform industry and thrive for so many reasons.
Combining Virgin Airlines and Air Alaska will create a sizable enough gate presence to compete with the big global carriers who fly west. And, you can bet that more direct flights and better price points are in store for those flying back and forth regularly to Silicon Valley (or NYC).
Southern Competition: Austin - Dallas Flights
Southwest Airlines has been battling hard to keep prices down thus creating competitive pricing on the Dallas - Austin route. Given the drive time vs flight costs if flights become cheaper, the highway volume may decrease (we can dream!) and they’ll give Vonlane a run for their money.
Sidebar: Virgin no longer flies into/out of DFW. The hub is now Love Field. I know people who have made that mistake - wrong airport!
Net/net this new Alaska Airlines purchase of Virgin Airlines is a good thing for Austin and the marketplace as a whole. Now, if I'd only had Virgin stock prior to the merger...
Press Release from Virgin