Virgin America Sale

“If you want to be a Millionaire, start with a billion dollars and launch a new airline” – Richard Branson

Richard Branson founded Virgin America back in 2004 and commenced operations in 2007. The airline was unique, unlike anything else out there at the time. Richard Branson had a vision for what air travel should be like and challenged the convention of legacy carriers. Everything about Virgin was slightly different and fun. Virgin America’s website looks like something you would expect from a tech startup rather than an airline. The lounges at JFK, IAD, LAX, and SFO were more like nightclubs than airline lounges. Virgin was succeeding in so many ways.

The airline was on the cutting edge for showing consumers what air travel could be. The airline was a pioneer in bringing wifi to all of its planes. Today, there are several airlines that still do not offer in-flight wifi. The airline also featured touch screen seatback entertainment, another perk that even today is not offered by all airlines. The airline also offered the best customer service in the industry. Overall, Virgin was a huge success and many will be sad to see it go in the coming years.

I can only speculate as to why Virgin decided to sell, but I believe company’s management saw this as the opportune time to sell. Airline profits are at record highs due to decreased oil prices and increased consumer demand. I imagine the company saw this point in time as an opportunity to exit while earning the highest possible price per share. The sale is interesting because it seems to be against the wishes of founder Richard Branson.

Today, Branson published his opinion on the merger with Alaska Airlines. He notes that all of the airlines he has founded, Virgin Atlantic, Virgin Australia, and Virgin America have been founded out of frustration with the existing airline options. He notes that as airlines focus on the bottom-line customers suffer. Anyone that has ever flown Virgin America could easily tell that the focus was on the consumer and the best possible experience. In his post, Branson explains that it was not his choice to sell and if it were his decision he would not have sold the airline, but he was unable to stop the sale due to his limited ownership of the company.

I understand Branson’s frustration with the upcoming sale of Virgin America, he was able to build something truly unique. The airline played a part in changing domestic air travel forever, but sadly his dream seems to be coming to an end. Virgin management is meant to act in the best interest of the shareholders and it was their decision to sell the airline at what they must believe to be the best possible time and price. It is sad to see another great company fall to the demands of the shareholders, but hopefully through the merger the new Alaska Airlines will become an even better airline by adopting some of the Virgin experience.

Safe Travels!