Alaska Airlines is contemplating keeping the Virgin America brand and running it as a different product within the same company.
Alaska Airlines announced in April that it had purchased Virgin America for US$2.6 billion. Despite initial reports suggesting that the Virgin brand would cease to exist after the buyout, it appears that the airline’s strong brand equity may allow it to continue running under its existing name.
As reported by Associated Press, Alaska Airlines’ chief executive Brand Tilden was quoted as saying: “We are looking [into the possibility of Virgin America retaining its name] because we do believe in the power of its brand and we don’t want to lose all that loyalty and revenue that exists today.”
Tilden conceded that past mergers in the US have led to the dissolution of the acquired airline, most recently seen in American Airlines’ purchase of US Airways, when the latter’s brand was discontinued in 2015.
However, he also pointed out that European carriers have found success in operating multiple brands, such as the Lufthansa Group, which consists of not only Lufthansa but also Swiss and Austrian Airlines. IAG is yet another example with airlines such as British Airways, Iberia and Aer Lingus under its portfolio.
Alaska Airlines expects to take full control of Virgin Atlantic by late summer after it receives regulatory approval for the merger.