Tuesday, October 4, 2016

Alaska Airlines rival JetBlue is making 'generous' offers to poach Virgin America flyers

Alaska Air Group has a hard fight ahead with rival JetBlue Airways Corp., which is making moves to poach Virgin America customers ahead of the California airline's purchase by Alaska.

Even before Alaska Airlines' $2.6 billion takeover of Virgin is approved by the Department of Justice, New York-based JetBlue is actively luring Virgin America business travelers with generous matching mileage points offers, said Steve Danishek, president of business travel agency TMA Travel in Seattle.

"JetBlue has a pile of cash and it's going to be a problem," Danishek said. "JetBlue has a better business class so they (Alaska) have to be ready."

Danishek said coveted business travelers are watching the takeover closely, especially how Seattle-based Alaska will integrate Burlingame, California-based Virgin America's Elevate frequent flyer program with its own Alaska Airlines Mileage Plan.

"The most important thing for the business traveler is that your status is protected. Technically, they should be able to come across mile for mile, but reward redemption levels are the key factor," Danishek said.

On that subject, though, Alaska has been silent. Virgin America told customers that program combinations will be "equitably mapped over," but offers no details on how redemptions will work.

Alaska Airlines acknowledged "a lot of interest" in how the mileage and rewards plans will be integrated, but declined to discuss specifics.

"We will have more to share on this topic after we receive DOJ approval and then close the transaction," Alaska spokeswoman Bobbie Egan said.

JetBlue, which was among airlines interested in acquiring Virgin America but lost a bidding war with Alaska, declined to comment for this story. But the airline is already offering to take Virgin America Elevate mileage points and exchange them for newly minted JetBlue mileage.

Alaska "will have to put a plug that hole," Danishek said. "They'll have to offer double and triple miles and lower redemption levels to ensure these flyers stay on Virgin America."

Virgin is trying to reassure customers, telling them they will continue to accrue Elevate points and eventually be able to use their status and points to access to Alaska's larger flight network, which includes 114 destinations across North America.

JetBlue also has unveiled new transcontinental routes between Los Angeles and Orlando and new flights from Long Beach to compete with Virgin America in the lucrative California market. Most of Virgin's flights operate from Los Angeles and San Francisco, and the airline says its success depends on those markets.

In July, JetBlue announced that it was moving to "organically strengthen" its presence on a national scale," calling it a post-Alaska takeover of Virgin response to help West Coast travelers facing "reduced options and less competition."

(Andrew McIntosh - Puget Sound Business Journal)

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