Alaska Airlines, Branson clash over licensing fees

Alaska Airlines could be headed toward a showdown with Richard Branson over millions of dollars in licensing fees. Alaska took control of Virgin America last year. Branson, the British billionaire who helped create Virgin America, told reporters in Seattle this week that Alaska must pay royalties for the Virgin name under a licensing deal that runs until 2040. But Alaska Airlines has a different opinion because it plans to drop the Virgin brand, probably in 2019. Alaska's general counsel said Wednesday that Branson was correct only about the length of the contract. "What he didn't mention is there are lots of ways out of the contract," Kyle Levine said Wednesday. "No, we do not need to keep paying for a brand that we are not using." In a written statement, Branson's UK-based Virgin Group said the licensing agreement with Alaska has "clear obligations," including a royalty payment, and that Alaska has said Virgin America will honor its obligations. Virgin Airlines paid $7.7m in licensing fees to a Branson-controlled company in its last full year before the Alaska takeover. But that was before a 40% rate hike that likely pushed the fee to more than $10m. Branson has grumbled that he believed Alaska's leaders would value the Virgin brand but have instead ripped the heart out of it.<br/>