Correction: In an earlier version of this article, the Empire erroneously stated that once the merger with Virgin America is complete that the Virgin insignia scrolled across plane tails will be replaced with Alaska’s signature Eskimo and that the airlines will be dropping the Virgin name on most everything. No decision has been made yet as to how to treat the Virgin America brand as it relates to aircraft paint jobs where it currently exists. The Empire regrets the error, which has been corrected in the below article.
In early April, Alaska Airlines announced that it was buying Virgin America, a move the airline said would make it more competitive against bigger carriers, like Delta and American. On Thursday afternoon, an Alaska Airlines vice president told the Juneau Chamber of Commerce that the merger shouldn’t negatively impact operations here in the airline’s home state.
“Will we lose sight of our roots? You need to be the judge and tell us how we’re doing in a year or two,” Joe Sprague, the airline’s senior vice president in charge of communications, said during the talk at the Juneau International Airport. “I can tell you our intention is not to take our eye off the ball here in Alaska.”
Alaska Airlines, which was founded 84 years ago in Anchorage, is waiting for the U.S. Department of Justice to approve the company’s $2.6 billion merger with Virgin America. Sprague says his airline should have the DOJ’s stamp of approval some time this fall.
Currently, Alaska Airlines — the country’s sixth largest carrier — controls about 4 percent of the nation’s domestic capacity, Sprague said. Recognizing that growth through consolidation was the way of the industry, Alaska decided to merge with the 9-year-old, California-based airline to hold its seat at the big kids table.
“We need to get a little bigger, a little faster than we could with organic growth,” Sprague told the chamber.
Even with the merger, Alaska will only control about 7 percent of the nation’s domestic capacity. It will, however, boost its “base of strength” on the West Coast, Sprague said. The merger will only add a couple new destinations to Alaska’s flight map, but it will add several new routes.
The airline won’t have to run quite as many flights through Seattle, the airline’s current corporate headquarters. Once the merger is complete, Alaska will be able to make use of Virgin’s strong presence in California, offering more flights directly out to Los Angeles and San Francisco, according to Sprague.
Alaska Airlines isn’t only looking to build its presence in the Golden State though. Sprague said the airline also plans to invest nearly $100 million in its Alaska operations during the next three years. It will be retiring and replacing roughly two dozen older Boeing 737 jets.
“When the first 737 flew into Juneau, it was like the space shuttle had landed; it was so modern,” Sprague said jokingly. “Now, it’s still like the space shuttle. It needs to be retired.”
About $30 million of the airline’s investment in Alaska will go to terminal upgrades. Alaska Airlines serves 19 communities in the state. It owns terminals in 11 of those communities, a number Sprague said no airline matches in any state. And all of those terminals will see “at least some degree of upgrade,” he added.
Alaska Airlines hasn’t yet decided what it will do with the Virgin America brand. Whether it will repaint Virgin planes to bear the Alaska brand remains to be determined, but Sprague assured chamber members that they will continue to see the airline’s signature Eskimo insignia on the tails of Alaska planes flying into and out of Juneau.
Sprague also announced Thursday that Alaska Airlines will not be transitioning from a miles-based rewards program to a points-based alternative, in which points are awarded based on the cost of plane tickets rather than the distance of the trip.
Alaska Airlines currently employs about 1,800 hundred people in its Alaska region, based in Anchorage.
• Contact reporter Sam DeGrave at 523-2279 or at sam.degrave@juneauempire.com.
