Charting a Route to Success in Technology Mergers

Many of us travel routinely for work or leisure. We think little of the tasks required — booking tickets, checking bags, earning or redeeming frequent-flyer miles — but modern air travel is a tremendous achievement that few take the time to consider or appreciate.

In 2016, Alaska Airlines acquired Virgin America, creating a strong competitor to the four largest U.S. carriers. Merging the two airlines into a single company required a radical shift — one that empowered employees to take initiative and make decisions. This shift transformed Alaska Airlines’ culture, eliminating bottlenecks and accelerating the merger.

This experience benefited the company during the height of the pandemic, when it joined Oneworld Alliance, a program that services international frequent flyers for its 14 member airlines. To become a Oneworld member, Alaska Airlines needed to rework its fare classes, mileage tiers, and loyalty program — all without any of its customers noticing.

I spoke with Alaska Airlines’ Charu Jain, senior vice president of merchandising and innovation, and Vikram Baskaran, vice president of information technology services, about the merger and how their organization seized opportunities to reduce friction for employees and customers.

MIT Sloan Management Review: Any integration, like Alaska Airlines’ merger with Virgin America, is a big technology lift. And when you take into consideration all of the customers who needed to enjoy a seamless experience while this was happening — that’s pretty daunting. How did you approach it?

Vikram Baskaran: We looked at Virgin from a distance, and we saw that the company had a spotless guest experience and it was, of course, a startup initially. Alaska Airlines is a 75-year-old company. So these two companies were completely different as far as technology stacks go. It was interesting to compare the two ecosystems — Virgin, which was more commercially focused, and Alaska, which was more operations focused — and think about how to scale these systems forward. Both Charu and I also worked for United Airlines when United merged with Continental Airlines, so there were also certainly lessons learned from previous experience.

Charu Jain: Right. I believe Alaska was actually my third airline merger, and I joined the company right around when the merger was announced, so I knew what I was getting into.