Virgin America
Virgin America Inc. was a low-cost airline headquartered in the San Francisco Bay Area city of Burlingame, California. It primarily focused on operating low-fare, higher-quality service between cities on the West Coast of the United States and other major metropolitan areas. It operated both domestic and international flights, with hubs in San Francisco and Los Angeles as well as smaller focus city operations at Love Field in Dallas, Texas, and New York / JFK.
Originally established in 2004, the airline began operations in 2007 as an independent airline company using branding licensed from the United Kingdom–based Virgin Group, which also controls the brand of the Virgin Atlantic and Virgin Australia airlines. The Alaska Air Group acquired Virgin America in April 2016, at a cost of approximately $4 billion and continued to operate Virgin America under its own name and brand until the airline was fully merged into Alaska Airlines on April 24, 2018.
History
Founding (2004–2007)
In early 2004, Virgin Group announced its intention to found a United States–based, low-fare airline called "Virgin USA". At the time, Virgin USA expected flights to begin by mid 2005. After considering several key areas, the San Francisco Bay Area was chosen as the location of its flight operations center and later as its corporate headquarters. The airline changed its name from "Virgin USA" to "Virgin America" and due to the difficulty in finding U.S. investors willing to gamble on a new airline in an already congested industry, the launch date was pushed back from mid 2005 to early 2006.Virgin America secured U.S. investors Black Canyon Capital and Cyrus Capital Partners in late 2005. Once the new owners were on board, Virgin's General Counsel submitted the required U.S. Department of Transportation certificate application on December 9, 2005. Unfortunately, despite significant public support for the new California-based airline, the approval process was mired in a debate between the supportive city and state representatives from California and New York and the opposing national aviation labor union, Air Line Pilots Association, as well as a potential competitor Continental Airlines. The review of Virgin America's application was prolonged due to this opposition, which claimed Virgin America, a subsidiary of the United Kingdom–based Virgin Group, would not be under U.S. ownership or control. The application was initially denied by the Department of Transportation on December 27, 2006.
In order to achieve the necessary approval, Virgin America's General Counsel David Pflieger and CEO Fred Reid filed a revised application that proposed a restructuring of the airline in January 2007; voting shares would be held by a Department of Transportation–approved trust and only two Virgin Group directors would be on the eight-person board. Additionally, Virgin America was open to removing Richard Branson from the airline's board of directors and possibly removing the "Virgin" brand from the title altogether. Virgin America was tentatively cleared to fly by the U.S. Department of Transportation on March 20, 2007, on the condition that the airline would alter its business structure, including the limitation of foreign ownership shares to 25% and the replacement of Fred Reid. The airline protested the stipulation concerning Reid's removal to the federal regulators, arguing that the other stipulations ensured that the business would not be ruled by foreign interests. The Department of Transportation's final agreement allowed Reid to remain involved with Virgin America until February 2008, after which he was required to leave the company.
Virgin Group operations (2007–2016)
Virgin America began selling tickets in July 2007. On August 8, 2007, the airline made its inaugural New York and Los Angeles to San Francisco flights — the aircraft was named "Air Colbert", after comedian Stephen Colbert. In December 2007, C. David Cush replaced Reid as CEO of the airline. From the beginning of operations, Virgin America reported losses, beginning with $270 million in its first month, until the third quarter of 2010, when it achieved its first profit of $7.5 million.On May 21, 2009, Virgin America became the first U.S. airline to offer Wi-Fi access on every flight, via Gogo Inflight Internet. Between November 10, 2009, and January 15, 2010, the airline offered free WiFi with a subsidy from Google. On December 17, 2014, Virgin America announced that it would offer faster fleet-wide ATG-4 in-flight WiFi service from Gogo, with speeds three times faster than the first generation system.
In March 2010, Virgin America announced its intention to start flying to Toronto from Los Angeles and San Francisco, making it the airline's first international destination. Following the Department of Transportation's approval of Virgin America's proposal to fly to Canada, international service began with flights to Toronto Pearson International Airport on June 29, 2010. However, due to high operating costs, response from competitors, slower growth than anticipated, and higher demand for Dallas/Fort Worth, Virgin America terminated Toronto service on April 6, 2011. Virgin America began its service to Dallas/Fort Worth International Airport in December 2010, and continued until after the repeal of the Wright Amendment in October 2014, when the airline leased two gates and established a focus city at Dallas Love Field and enhanced the number of connecting destinations. As a result, Virgin America transported almost 31,000 passengers through Dallas Love Field in the first month, achieving 3.58% market share at Dallas Love Field.
Virgin America announced in January 2011 a firm order for sixty new Airbus A320 aircraft, including thirty new Airbus A320neos, that would be delivered starting in 2016, as a formal expansion of an initial commitment made by Richard Branson at the Farnborough Airshow in July 2010, though in November 2012 the airline deferred delivery of the aircraft to 2020. In April 2011, Virgin America's hub at San Francisco International Airport relocated to the newly remodeled Terminal 2, sharing the gates with American Airlines. In late October 2011, the airline migrated to Sabre's global distribution system that handles reservations, frequent-flier accounts, flight operations data and crew scheduling. Difficulties with the changeover sparked widespread customer complaints, due to early technical malfunctions surrounding the program. On December 12, 2012, Virgin America opened their first airport lounge, the Virgin America Loft, at Los Angeles International Airport.
File:Frontiers of Flight Museum December 2015 105.jpg|thumb|The Virgin America exhibit at the Frontiers of Flight Museum at Dallas Love Field
Alaska Airlines acquisition (2016–2018)
Virgin America had its first public offering at the NASDAQ stock exchange on November 14, 2014, selling 13.3 million shares to raise $307 million for the company.A number of airlines interested in a takeover of Virgin America approached the airline in late 2015, prompting Virgin America to correspond with an undisclosed financial adviser about how and if to proceed with a sale. Alaska Air Group and JetBlue were the two most interested companies to make offers to purchase the airline from Virgin Group. In December 2015, Alaska was interested at $44.75 per share, before JetBlue manifested its interest in February 2016. A bidding war ensued culminating on March 31 and April 1 at $57 per share, % higher than the day's closure at $38.9. On April 4, 2016, Alaska Air Group announced that it had agreed to buy Virgin America for $2.6 billion. Including debt and aircraft leases, the transaction was worth approximately $4 billion. Had the merger agreement been terminated by Virgin America, they would have been contractually obligated to pay Alaska Air Group a termination fee equal to $78.5 million.
Virgin America's founder Richard Branson expressed disappointment with the merger between Alaska Airlines and the airline he founded. In July 2016, Virgin America's shareholders approved the merger, leaving the approval by the United States Department of Justice as the only foreseeable hurdle. In September 2016, a lawsuit was filed against Alaska Airlines by consumers to block the merger between the two carriers, which the Alaska Air Group settled in court in December 2016. Subsequently, the Department of Justice approved the acquisition, which was completed on December 14. Following the acquisition, the former chief financial officer of Alaska Airlines, Peter Hunt, became the president of Virgin America, while the former chief operating officer and president of Alaska Airlines, Ben Minicucci, became the chief executive officer.
Virgin America became the launch customer for the Airbus A321neo, with the airline placing a firm order for 10 aircraft through leasing company GE Capital Aviation Services. The first A321neo was delivered in Hamburg to Virgin America and entered service on May 31, 2017; a total of five A321neos were delivered to Virgin in 2017 and five in 2018. In early February 2017, Alaska Air Group said it was working with GE on an arrangement where it would not take delivery of all 10 ordered jets, in favor of keeping a predominantly Boeing fleet. A presentation given by Alaska Airlines' chief financial officer in March 2017 indicated that Alaska would take delivery of all 10 leased A321neos, and would absorb and operate Virgin America's existing A319 and A320 fleet through at least 2024.
As part of the merger, some of Virgin's amenities would be integrated into Alaska's product. As Alaska Group was licensing the Virgin brand from Virgin Group, Branson indicated a willingness to relaunch the airline after the Virgin America brand was retired.
Virgin America made its final revenue flight under its callsign "Redwood" on January 10, 2018. The next day, on January 11, 2018, the Federal Aviation Administration issued a single operating certificate for a combined Alaska Airlines and Virgin America.
Virgin America flights continued to operate using Virgin America aircraft, crew, and brand name until April 25, 2018, when the airlines merged into the same passenger service system. The final Virgin America revenue departure was Flight 1948 at 9:32 PM, traveling from the airline's San Francisco headquarters to its other hub in Los Angeles, while the true final Virgin America departure was an employee charter operating as Flight 1947 from Los Angeles to San Francisco, which departed at 9:35 PM and operated under Virgin America's original "Redwood" callsign. Overnight, the customer-facing portions of the company were converted to use the Alaska Airlines brand.
From April 25, 2018, passengers could only see the Alaska Airlines brand online and in airports, and virginamerica.com would redirect to alaskaair.com. Prior to the brand cutover, livery repainting of Virgin America's Airbus aircraft began in January 2018. Additionally, the interiors of the Airbus aircraft underwent refitting with seats similar to those in Alaska's Boeing aircraft from September 2018, in another project expected to take several months to complete, with the first aircraft refit and unveiled in early 2019. The last plane wearing the Virgin America livery, the one that operated Flight 1948, was repainted in Alaska Airlines livery on June 2, 2019. Following the completion of the repainting of Virgin America's aircraft, virginamerica.com instead redirected to Virgin Group's website virgin.com rather than to alaskaair.com, and Virgin America's social media profiles, such as its Facebook, Twitter and YouTube were subsequently either merged with those of Alaska Airlines, had their accounts closed, or otherwise had their content largely removed.