Fasten your seat belts; there may be turbulence ahead when Alaska Airlines and Virgin America combine two divergent company cultures. A merger between the two airlines was announced on April 4, 2016. Virgin America is described as innovative and hip, while Alaska Airlines is a bit more under the radar with a dependable brand image. The airlines' origins couldn't be more different. Alaska Airlines' roots go back to 1932 when a depression-era fur trader began offering flight service from Anchorage in a tiny three-seat plane. Relative newcomer Virgin America was founded in 2007 by rock-and-roll billionaire Richard Branson to "make flying fun again."
While both air carriers have loyal patrons, passionate Virgin America fans are expressing dismay about the forthcoming merger on social media. One FAQ on the Alaska Air website addresses the hot button of Virgin America's "fly" safety video – but fails to answer if Alaska will create its own choreographed safety dance. Even Virgin Group founder Richard Branson admitted sadness that his U.S. airline is merging with another carrier.
Virgin America has prided itself on the passenger experience. Virgin's Airbus fleet boasts mood lighting, electrical outlets in the leather seats with seatback touch screens that allow you to stream Netflix or even send a drink to another passenger. Contrast that with Alaska Airlines' barebones Boeing jets with an old-fashioned safety card and magazine in the earth-toned seat back. Alaska's only "cool" factor may be the Starbucks coffee service. While Alaska Airlines lacks VA's flashy amenities, the Seattle-based company is well-regarded for reliability, exemplified by its 20-minute bag guarantee.
What the airlines have in common is a history of customer satisfaction. In the Wall Street Journal's Middle Seat scorecard of the largest U.S. airlines, Alaska has been ranked #1 or #2 for the past six years. The carrier has also rated highest in the J.D. Power Airline Satisfaction Study eight years in a row. Virgin America has been ranked the #1 U.S. airline in the 2012-2015 Airline Quality Rating report, and has been named Best Domestic Airline by both Travel + Leisure, and Condé Nast Traveler from 2008-2015.
Once combined, Alaska will become the fifth largest U.S. airline, ousting JetBlue, which lost out on the bidding for Virgin America. Some argued that JetBlue was a better fit culturally, and could have greatly expanded east-coast routes. The Alaska-Virgin union will instead create a west-coast low-fare powerhouse.
Management consultants Hay Group claim 91% of mergers and acquisitions fail due to cultural differences. Notable examples of oil-and-water mergers include the Nextel/Sprint merger (casual khaki culture meets buttoned-up bureaucracy), AOL/Time Warner (unruly internet upstarts versus conservative media fiefdoms), and Daimler/Chrysler (no-nonsense Germans contrasted with free-wheeling Americans). While culture clashes were certainly not the only factor in the downfall of these seemingly mighty alliances, they certainly played a significant role.
The Alaska Airlines-Virgin America deal won't even close until January 2017. The newly created flyingbettertogether.com website assures passengers that Virgin America's premium inflight experience won't change – for now. Can Virgin can convince Alaska to up its game? Flyers will have to check in Q1 of 2018 to see if they are greeted with ambient lighting, contemporary tunes, and fresh flowers.
Readers, do you think Alaska Airlines and Virgin America will be able to merge their dissimilar company cultures? Comment and let us know!