"Because I'm not American, the US Department of Transportation stipulated I take some of my shares in Virgin America as non-voting shares, reducing my influence over any takeover. So there was sadly nothing I could do to stop it."
"The United States (U.S.) airline industry is unique among industries in being governed by
federal statutes requiring air carriers seeking to be certified in the U.S. to be “owned or
controlled” by a “citizen” of the U.S.1 This requirement is enforced by the Department of
Transportation (DOT) performing “fitness reviews” on applicant airlines to ensure they meet the
“citizenship” definition.2 Historically, the U.S. has limited ownership and control to U.S. citizens
for four primary reasons: the protection of a fledgling U.S. airline industry, the regulation of
international air service through bilateral agreements, concern about allowing foreign aircraft
access to U.S. airspace, and military reliance on civilian airlines to supplement airlift capacity.3"
Of Particular interest to this Virgin America deal:
Voting equity up to 25 percent and nonvoting equity up to 49 percent by a foreign entity is allowed, and any equity
above these levels must be held in trust or converted to debt. Foreign holdings will be counted
cumulatively towards these totals. (page 24)
Have his relationships with the majority shareholders deteriorated that much? It sounds like there was more going on than we know, and the non voting ability was a convenient scapegoat. That or they all wanted to cash out and bank a nice payday.
If anyone is taking over or merging with Virgin America, I'm glad it's Alaskan. I've never been unhappy with flying with them.
A couple examples of little things they do that are clever and should be copied by everyone else: check your bag at the gate 30 minutes before boarding and you can board early; a guarantee that your checked luggage will be in your hands 20 minutes after landing, or you get $20.
They are an airline that are trying things, experimenting.
So this will likely be one of the first things that Virgin gets rid of along with 1 free checked bag.
It never ceases to amaze me that the airlines refuse to abandon this absurd policy of charging for a piece of checked luggage. When you look at when this practice was introduced of charging for checked luggage, the time it takes to board and un-board a plane has increased by about 20 minutes due to everyone trying to shove as much as possible into overhead bins. Perhaps this time axis doens't carry much weight for carrier? Although that would be hard to imagine. It seems like false economy to say charging $25 per luggage checked make sense when you have now added 40 minutes to each flight. I can count the number of times on one hand that my flight has left at its scheduled time even though it boarded on time.
I'd pay good money for the ability to exit the plane early after the flight is over. I really don't care about boarding early, especially if I'm not looking for bin space.
Agreed. Alaskan was one of the first to have check in kiosks and app base checkin. They just released a pre-print bag check tag as well. Best experience of any airline I have flown people and technology wise. ( I'm a former Delta Platinum miles member )
> A couple examples of little things they do that are clever and should be copied by everyone else: check your bag at the gate 30 minutes before boarding and you can board early; a guarantee that your checked luggage will be in your hands 20 minutes after landing, or you get $20.
I've had the reverse. My experience with them is always miserable.
Honestly, they seem an airline stuck in the 1980s. For example, after we married, my wife changed her name & got a new ID. She realized she also needed to change a name on a future flight back home to Seattle.
Alaskan charged her $100 to change her name.
$100.
To update a field in a database. For a flight over a month out.
By contrast, she also had to change a Southwest flight. $0 & she was off the phone in 10 minutes.
Example 2: I actually tried to take advantage of the 20 minute guarantee at LAX. I was literally sent to SIX different people. My bags had taken 25 minutes to arrive.
It took another 30 minutes to get my $20 vouchers. (Because, damnit, I wasn't giving up on principle! To the chagrin of my wife.)
And those $20? It expired in 2 months.
And despite being delayed for for six bags for 3 people, I could only use one $20 voucher.
The boarding process is bizatine based on some complex rubric of status.
Half the Alaskan personal I've encountered are nice. The other half are pretty miserable. They clearly hate their job. Or hate the customers. Possibly both.
Their fees and even basic pricing is overly complex. Their planes tend to be older.
The only defense I ever hear comes from either 1) people who have status or 2) people who say other airlines are just as bad.
(2) just isn't true. I've flown Korean Air, Emirates, Jet Blue, etc. and they are FAR better.
There is part of me that wishes we had let United, American, & the others go bankrupt in 2001, so better companies would have emerged.
Anyway, I hate Alaska.
(Source: Me. I typically travel on different airlines once or twice a month.)
Isn't "20 minutes or you get $20" out of their hands? I thought all baggage handling was completed by airport contractors, not by the airlines. Is Alaskan putting their faith in these employees?
I still think JetBlue was a better fit. Alaska's a west coast, all 737 fleet. Now they own another west coast airline (i.e. they overlap) with a ton of Airbus. Alaska's probably getting something good for their $2.6b, but I haven't figured out what exactly.
According to the investor slide deck [0], it's to get into the California market, which they're not dominant in. This acquisition will mean that Alaska will be #2 at SFO, and a major player at LAX.
Virgin America's aircraft are almost all leased, so they'll be easy to get rid of and consolidate into Boeing aircraft.
Apparently Virgin only owns 8 of those planes and the rest are leased, so the speculation I read is Alaska is just likely to change them all over to 737s eventually. And if they have the capital to operate that same system using purchased planes and not leased planes, then they'll be running the same routes with more favorable finances than Virgin was able to.
Agreed. JetBlue has what Alaska is missing: An east coast network and a very solid trans-continental product to compete on the SEA/SFO/LAX-JFK flights. And they both operate comparable Airbus equipment where Alaska is an all-Boeing shop. That's going to make finding technical cost reductions difficult.
One of the main reasons speculated why Alaska is doing this is to make it significantly more difficult for another airline (primarily Delta) to take them over.
What you are seeing is that, even though Virgin is huge and expensive and provides a lot of value, the industry is competitive and very little of that value is profit to the owner. Whereas Minecraft has a niche and is very profitable.
Haha! Well if you compare that way, there are numerous examples of a piece of software doing well(or have more market cap) than a physical company with many machines and thousands of employees!
There was a Tumblr that had a list of things that are cheaper than Whatsapp's $16B acquisition. It's pretty insane how much bigger of an industry some things are over others.
As far as I know, Virgin is pretty much a franchised brand. Their trains are run by other transport companies, their cable TV is run by another telecoms operator, their banks are run by another institution etc.
I follow the airline industry, and this offer is $600 million more than the most recent rumors ($2 billion even). I'd assume this accounts for a lot of the bump (and simple "the deal is further along than it was last week" progression accounts for the rest).
Sad, but not surprising. It seems like good customer service just doesn't scale for airlines. Back to being stuck with being treated like crap by your airline, or paying less to be treated slightly crappier by your airline.
Ehh, I wouldn't despair just yet - Alaska itself is not a particularly big airline. I've flown with them lots and they are heads and shoulders above the legacy turdbucket of United/Delta/American.
If VX had to be sold to anyone, I'm glad it's to Alaska.
Just a few days ago there was a fantastic article on the lack of competition in the economist. It pointed to the recent consolidation of the airline industry. Kind of amazed that there will be one less player.
Why? The direct from the founder's mouth article is a Hacker News tradition, practically. It's also a much more honest sounding piece than the PR approved version above.
I wonder what will happen with that letter of intent for the investment in that boom sonic plane startup. Was that investment announcement somwthing legally binding? (I didn't follow that closely)
The deal with Boom appears to be with Virgin Atlantic, which it a different company from Virgin America, due to the ownership laws that are causing Branson to bail on Virgin America.
[+] [-] dazbradbury|10 years ago|reply
- Sir Richard Branson, Virgin founder.
[+] [-] nonameface|10 years ago|reply
"The United States (U.S.) airline industry is unique among industries in being governed by federal statutes requiring air carriers seeking to be certified in the U.S. to be “owned or controlled” by a “citizen” of the U.S.1 This requirement is enforced by the Department of Transportation (DOT) performing “fitness reviews” on applicant airlines to ensure they meet the “citizenship” definition.2 Historically, the U.S. has limited ownership and control to U.S. citizens for four primary reasons: the protection of a fledgling U.S. airline industry, the regulation of international air service through bilateral agreements, concern about allowing foreign aircraft access to U.S. airspace, and military reliance on civilian airlines to supplement airlift capacity.3"
Of Particular interest to this Virgin America deal:
Voting equity up to 25 percent and nonvoting equity up to 49 percent by a foreign entity is allowed, and any equity above these levels must be held in trust or converted to debt. Foreign holdings will be counted cumulatively towards these totals. (page 24)
Source: http://dailyairlinefilings.com/public/furlan.pdf
[+] [-] jvm|10 years ago|reply
[+] [-] scurvy|10 years ago|reply
[+] [-] mabbo|10 years ago|reply
A couple examples of little things they do that are clever and should be copied by everyone else: check your bag at the gate 30 minutes before boarding and you can board early; a guarantee that your checked luggage will be in your hands 20 minutes after landing, or you get $20.
They are an airline that are trying things, experimenting.
[+] [-] bogomipz|10 years ago|reply
It never ceases to amaze me that the airlines refuse to abandon this absurd policy of charging for a piece of checked luggage. When you look at when this practice was introduced of charging for checked luggage, the time it takes to board and un-board a plane has increased by about 20 minutes due to everyone trying to shove as much as possible into overhead bins. Perhaps this time axis doens't carry much weight for carrier? Although that would be hard to imagine. It seems like false economy to say charging $25 per luggage checked make sense when you have now added 40 minutes to each flight. I can count the number of times on one hand that my flight has left at its scheduled time even though it boarded on time.
[+] [-] gaur|10 years ago|reply
I'd pay good money for the ability to exit the plane early after the flight is over. I really don't care about boarding early, especially if I'm not looking for bin space.
[+] [-] esterly|10 years ago|reply
[+] [-] koolba|10 years ago|reply
> A couple examples of little things they do that are clever and should be copied by everyone else: check your bag at the gate 30 minutes before boarding and you can board early; a guarantee that your checked luggage will be in your hands 20 minutes after landing, or you get $20.
Is that (gate check bag) for free?
20 minutes or $20 sounds like a great idea too.
[+] [-] wdr1|10 years ago|reply
I've had the reverse. My experience with them is always miserable.
Honestly, they seem an airline stuck in the 1980s. For example, after we married, my wife changed her name & got a new ID. She realized she also needed to change a name on a future flight back home to Seattle.
Alaskan charged her $100 to change her name.
$100.
To update a field in a database. For a flight over a month out.
By contrast, she also had to change a Southwest flight. $0 & she was off the phone in 10 minutes.
Example 2: I actually tried to take advantage of the 20 minute guarantee at LAX. I was literally sent to SIX different people. My bags had taken 25 minutes to arrive.
It took another 30 minutes to get my $20 vouchers. (Because, damnit, I wasn't giving up on principle! To the chagrin of my wife.)
And those $20? It expired in 2 months.
And despite being delayed for for six bags for 3 people, I could only use one $20 voucher.
The boarding process is bizatine based on some complex rubric of status.
Half the Alaskan personal I've encountered are nice. The other half are pretty miserable. They clearly hate their job. Or hate the customers. Possibly both.
Their fees and even basic pricing is overly complex. Their planes tend to be older.
The only defense I ever hear comes from either 1) people who have status or 2) people who say other airlines are just as bad.
(2) just isn't true. I've flown Korean Air, Emirates, Jet Blue, etc. and they are FAR better.
There is part of me that wishes we had let United, American, & the others go bankrupt in 2001, so better companies would have emerged.
Anyway, I hate Alaska.
(Source: Me. I typically travel on different airlines once or twice a month.)
[+] [-] giarc|10 years ago|reply
[+] [-] btgeekboy|10 years ago|reply
[+] [-] JamilD|10 years ago|reply
Virgin America's aircraft are almost all leased, so they'll be easy to get rid of and consolidate into Boeing aircraft.
[0] http://phx.corporate-ir.net/External.File?t=1&item=VHlwZT0yf...
[+] [-] djcapelis|10 years ago|reply
[+] [-] arcticbull|10 years ago|reply
[+] [-] HelloMcFly|10 years ago|reply
[+] [-] kin|10 years ago|reply
[+] [-] Turing_Machine|10 years ago|reply
https://www.alaskaair.com/travelinfo/destinations
Also, they've recently put in for a route to Cuba, if I remember right.
[+] [-] perezdev|10 years ago|reply
[+] [-] tamana|10 years ago|reply
[+] [-] vthallam|10 years ago|reply
[+] [-] unknown|10 years ago|reply
[deleted]
[+] [-] kin|10 years ago|reply
[+] [-] darkclarity|10 years ago|reply
[+] [-] tlrobinson|10 years ago|reply
[+] [-] swampthinker|10 years ago|reply
[+] [-] shoyer|10 years ago|reply
I enjoyed flying Virgin America, but losing this part of their culture will not be a bad thing.
[+] [-] jdamon96|10 years ago|reply
[+] [-] sjm-lbm|10 years ago|reply
[+] [-] bbarn|10 years ago|reply
[+] [-] potatolicious|10 years ago|reply
If VX had to be sold to anyone, I'm glad it's to Alaska.
[+] [-] dmritard96|10 years ago|reply
http://www.economist.com/news/briefing/21695385-profits-are-...
[+] [-] gulpahum|10 years ago|reply
[+] [-] JamilD|10 years ago|reply
[+] [-] kijeda|10 years ago|reply
[+] [-] personlurking|10 years ago|reply
https://www.virgin.com/news/alaska-air-group-acquire-virgin-...
[+] [-] bbarn|10 years ago|reply
[+] [-] goodJobWalrus|10 years ago|reply
[+] [-] Trisell|10 years ago|reply
[+] [-] lettergram|10 years ago|reply
[+] [-] tdburn|10 years ago|reply
[+] [-] sf_rob|10 years ago|reply
[+] [-] wiseleo|10 years ago|reply
[+] [-] throwaway_xx9|10 years ago|reply
They had an ugly crash involving failure to do Mx on jack screws in the past.
[+] [-] albertcolby|10 years ago|reply
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