Branson Coy About Return to U.S. Airline Market After Dispute With Alaska Air

Credit: skift.com

Virgin Atlantic

Billionaire Richard Branson, who founded Virgin Atlantic and invested in Virgin America, signaled he may jump back into the U.S. airline business. Virgin Atlantic



Skift Take: If Branson opts to return to the U.S. airline market now that Virgin America is in the hands of Alaska Air, he will have to deal with some of the same roadblocks he did the last time -- being barred from majority ownership.

— Dennis Schaal

Billionaire Richard Branson signaled he may jump back into the U.S. airline business after tussling with Alaska Air Group Inc. over how long the carrier must pay royalties on his Virgin America brand.


Alaska has to keep paying “unless we decide to start another airline. So, we’ll see what happens,” Branson said in an interview Thursday with Bloomberg TV. When asked if he would create a new carrier, he said, “watch this space.”


The serial entrepreneur’s comments hint at a return to the U.S. airline industry following Virgin America’s $2.6 billion sale to Alaska in December. Branson maintains he should be compensated for the brand through 2040. Alaska, which plans to retire the Virgin America name in 2019, has said it doesn’t need to pay for a brand it isn’t using.


Virgin America began service in 2007 and over the years it built a following of customers with its style, music and purple lighting on a fleet of Airbus SE A320 family jets.

Alaska, which flies Boeing Co. 737 planes, has said it will abandon the purple lighting in favor of blue.


Virgin America won a string of airline awards from travel magazines, and built a network of routes that crossed the U.S. That made it an attractive takeover target for Seattle-based Alaska, which was seeking a bigger piece of the California market and the lucrative transcontinental business. Alaska beat out JetBlue Airways Corp. to buy Virgin America.


Alaska didn’t respond to a request for comment Thursday. Other Branson-backed airlines include Virgin Atlantic Airways Ltd. and Virgin Australia Holdings Ltd.


 


©2017 Bloomberg L.P.


This article was written by Cory Johnson and Michael Sasso from Bloomberg and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to legal@newscred.com.



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