Richard Branson, Virgin's billionaire founder, is sad that Virgin America airlines is being sold to Alaska Airlines for $2.6 billion: "I would be lying if I didn’t admit sadness that our wonderful airline is merging with another," he wrote on his blog. "There was sadly nothing I could do to stop it."
And Branson isn't the only one.
whaaaaaaa— ಠ_ಠ (@MikeIsaac) April 2, 2016
please dont crapify virgin b/c i love it https://t.co/c1MKTrioNO
Virgin America is a tiny minnow in the US airline market, but it's a beloved one. Customers are besotted by the mood lighting, leather seats, oddly catchy safety instruction videos, and snack selection. It wins international awards.
JetBlue, one of the few US airlines approaching Virgin America in popularity, bid for the airline but lost. Still, it could be worse: Most rankings agree that Alaska Airlines is one of the better carriers. And some evaluations say it actually does a better job, even if its planes don't have quite as much mood lighting.
How Alaska Airlines and Virgin Airlines compare
Virgin Airlines ranked first in the latest Airline Quality Rating study, which evaluates American airlines based on objective factors like on-time arrival and lost bags; Alaska came in fifth, behind Virgin, JetBlue, Southwest, and Delta.
Planes are more likely to be on time with Alaska than with Virgin, according to the study: 87 percent of Alaska Airlines' flights landed on time, compared with 82 percent of Virgin's. And Alaska Airlines has the lowest rate of passengers who file official complaints about problems with their trip. Only about four out of every 1 million passengers complains, less than half of Virgin's rate.
Compared with Virgin, Alaska was about three times as likely to mishandle baggage and nearly five times as likely to bump passengers off flights because they're overbooked.
But Alaska placed first, just ahead of Virgin, on the Wall Street Journal's most recent airline rankings, a spot it's held every year since 2013. As well as involuntary bumping and on-time arrivals, the WSJ's evaluation took into account delays of at least 45 minutes and two-hour delays on the tarmac — both things Alaska was very good at avoiding — along with canceled flights.
And studies of customer satisfaction have found that people are generally pretty happy with Alaska Airlines. Alaska Airlines was the top-scoring traditional carrier in rankings from JD Power and Associates and came in third, behind JetBlue and Southwest, in the American Customer Satisfaction Index's airline survey. Virgin America was too small to be included in either survey.
Virgin America learned it's hard out there for a small airline
If there's one consistent trend in customer satisfaction surveys, it's that airlines that started or expanded after industry was deregulated in 1978, such as JetBlue, Southwest, and Virgin, are consistently more popular than the older carriers, such as Alaska, Delta, or American.
The problem is that it's very hard to succeed in the airline business. Since 1978, more than 250 new airlines have been started in the US, and nearly all of them failed. It took Virgin America seven years to turn a profit. And in the meantime the airline industry has consolidated, with big players getting bigger.
Since 2007, when Virgin America started flying, there have been four major airline mergers. Four carriers — American, United, Southwest, and Delta — now control 80 percent of the US market. The merger with Virgin will make Alaska the fifth-largest airline, smaller than the big four but bigger than JetBlue.
- Virgin America was popular, but not profitable, doing things that other airlines didn't. In 2013, the New York Times looked at whether Virgin could make it in the cutthroat airline market.
- The merger of Virgin and Alaska also combines one of the newest airlines with one of the oldest. Alaska Airlines was founded in 1932 to get people around Alaska. (It also used to give out Bible verses with on-board meals.) The New York Times in 2013 examined Alaska's fascinating history and current success.
- The big airplane mergers of the past decade have reduced competition and could be driving up fares and fees, the Associated Press found in an analysis in July.