Virgin America announced (17-Jan-2011) a firm order for 60 new Airbus A320 aircraft to be delivered 2013 to 2016, including 30 of the A320neo – the first commercial order for the new eco-efficient engine option. This formalises and expands an initial commitment made at the Farnborough International Airshow in Jul-2010. With this order and growth from other sources, Virgin America's fleet will more than triple, from 34 to 111 aircraft by 2019. It is estimated that the A320neo's fuel efficiency will yield an average annual savings of USD1.1 million per aircraft. [more]
Virgin America places Airbus' 10,000th order: signs for 60 new aircraft
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Alaska Air Group and Virgin: Running two brands is a growing trend. Working them is the hard bit
One of the most discussed aspects of the pending merger between Alaska Air Group and Virgin America is how Alaska would navigate the sensitivities of dissolving the Virgin America brand, given the fierce brand loyalty that Virgin America engenders among higher-yielding passengers. Now it appears that Alaska is giving serious consideration to retaining the Virgin America brand.
Although sustaining two brands post-merger is rare in the US industry, the combination of Alaska and Virgin America is unique in many aspects – most notable is that both brands generate strong positive sentiment among customers. That has not been the case for some US airline mergers, where in some cases a less popular or less prominent brand was retired.
Despite the complexities inherent in running separate brands, there are valid business reasons for Alaska to seriously evaluate the pros and cons of adopting that strategy. One important factor is preserving the levels of revenue that made the deal attractive in the first place.
Alaska, jetBlue and Southwest cost projections; good in the short term but long term challenges loom
Just as the large three global US airlines – American, Delta and United – work to contain their unit costs, their rivals Alaska, jetBlue and Southwest are committed to keeping their respective unit costs in line as the current revenue environment in the US remains weak.
The latter three airlines face different cost dynamics in the future. Alaska is attempting to embark on a merger with Virgin America, which will inevitably create some cost pressure as the full integration gets under way. Southwest is in the middle of complex pilot and flight attendant negotiations, which makes predicting its cost performance in the near- to mid-term difficult. At some point jetBlue will also conclude a new pilot contract that will affect its cost structure.
Cost performance results for Alaska, jetBlue and Southwest for 2Q2016 and the full year look reasonably favourable, although Alaska has refined its 2016 targets slightly, driven in part by increases in performance-based pay. But its costs should remain competitive compared with its peers, and solidly lower than those of the larger network carriers.