Alaska Air, Virgin America Plan Merger

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Key Takeaways:

  • Alaska Air is acquiring Virgin America for $2.6 billion, a merger that will create the fifth-largest U.S. airline by traffic.
  • The combined airline will offer over 1,200 daily departures across North and Central America, leveraging their respective Pacific Northwest and California strengths.
  • While both airlines have high customer satisfaction, Virgin America passengers may be disappointed by the loss of their distinctive opulent interiors.
  • The deal still requires approval from shareholders and regulators before it can be finalized.
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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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