Alaska Air, Virgin America Plan Merger

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Key Takeaways:

  • Alaska Air has agreed to acquire San Francisco-based Virgin America for $2.6 billion, which will create the No. 5 U.S. airline by traffic.
  • The merger will expand the combined airline's network, offering over 1,200 daily departures across North and Central America by leveraging Alaska's Pacific Northwest base and Virgin's California hubs.
  • While both airlines have high customer satisfaction ratings, there is concern that Virgin America passengers may be "let down" by Alaska Airlines' less opulent plane interiors.
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Alaska Air, based in Seattle, has agreed to acquire San Francisco-based Virgin America for $2.6 billion, the companies announced this week. “With Alaska Airlines’ strong foundation in the Pacific Northwest, and Virgin America’s California hubs … [the combined airline will offer] more than 1,200 daily departures to destinations across North and Central America,” Alaska Airlines said on its blog. Both airlines have scored high with customers — Alaska Airlines ranked number one in The Wall Street Journal’s annual airline scorecard for the last three years, and Virgin has ranked second for the last two.

According to The Wall Street Journal, the new airline might not please all travelers. “Passengers used to the opulent interiors of Virgin America Inc. planes with their recessed mood lighting and white leather seats up front might feel a bit let down to wind up on a less lavish Alaska Airlines plane,” the Journal wrote. Virgin America launched just nine years ago, while Alaska Airlines has been flying for 84 years. The deal still must be approved by shareholders and regulators before it’s finalized. The merger will create the No. 5 U.S. airline by traffic.

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