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Virgin America faces retirement in 2019

Virgin America

Image: Forbes.com (photo by Justin Sullivan/Getty Images)

Will this be the end of Virgin America?

This week brought news that passengers will lose a distinctive name in domestic air travel – Virgin America. Known for its stylish, eye-catching brand, Virgin America dates back to  2007 when the Virgin Group, owned by British billionaire Sir Richard Branson, created it. However, since June last year, the brand has been licensed to Alaska Airlines – who, on Wednesday, announced it would stop Virgin America operations “sometime in 2019.”

When Alaska Airlines adopted Virgin America in 2016, it seemed the airline intended to run the two brands simultaneously under one umbrella. Brad Tilden, Alaska Airlines’ CEO, recognized the value of Virgin America’s following (the airline boasts a considerable passenger base, which would be lucrative to any owner), indicating he would keep the two airlines distinct from one another.

However, this has proved a costly approach for Alaska Airlines. Running two brands together incurs extra expenditure, including royalty payments to Branson, and so the decision to drop Virgin America has been taken.

The Virgin America planes will be repainted, rebranded, and the staff will adopt Alaska Airlines uniforms. However, Tilden has also indicated that not all of Virgin America’s “flair” will be lost. He wants to keep the distinctive colored interior lighting (but in Alaska Airlines’ blue!), and has also indicated that free in-flight entertainment and fast Wi-Fi will be available on all aircraft as standard. Ultimately, Alaska Airlines’ takeover of the brand was a strategy to expand beyond the Pacific Northwest – and it’s certainly achieved that.

Branson expressed his disappointment with Alaska Airlines’ decision to drop the brand in a letter, stating “Alaska Airlines has a very different business model, and sadly, it could not find a way to maintain its own brand and that of Virgin America.” Fans of the airline also expressed their shock on social media, with some naming Virgin America “the best domestic airline in the country.”

Some critics have raised concern over the declining number of domestic airlines – either as a result of mergers or total dissolution – and what it could mean for passengers. Will less competition lead to airfare hikes? Possibly, but that remains to be seen.

However, maybe Virgin America fans shouldn’t be inconsolable. Firstly, Virgin Atlantic and Virgin Australia remain unchanged – so they can still get their fix of the brand on those airlines! Secondly, there’s no reason to suggest that Branson won’t revive the brand by licensing it to another airline. So will 2019 mark the end of this popular airline? We’ll have to wait and see.

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