Bloomberg News reported Wednesday morning that Virgin America Airlines could be for sale. But there was no hint of who the potential buyer or buyers might be.
Citing unidentified sources, Bloomberg said Virgin “is working with a financial adviser after receiving takeover interest,” although it added that “no decision has been made, and Virgin America may choose not to pursue a sale.” Sale of Virgin shares was temporarily stopped after they jumped as much as 12 percent in morning trading.
This morning, a Virgin America spokesperson told TravelSkills, “As a public company, we have a policy of not commenting on any market or media speculation concerning mergers or acquisitions involving Virgin America.”
Sir Richard Branson’s U.K.-based Virgin Group owns a 25 percent stake in Virgin America, as it has since the airline started. By law, the other 75 percent must be held by U.S. investors. In the fall of 2014, Virgin went public with an initial offering of stock that raised more than $300 million.
There was some speculation on CNBC that Delta might be interested in acquiring part or all of Virgin America, based on its existing 49 percent equity stake in Virgin Atlantic and its transpacific joint venture with Virgin Australia. Virgin America also has partnerships with the other Virgin carriers. Delta has been active in buying equity stakes in other airlines in recent years as well, including Brazil’s GOL, Aeromexico, and China Eastern.
There’s also the possibility that Virgin America could be acquired by non-airline investors.
At TravelSkills we’ve often thought a merger of Virgin America and JetBlue would make sense. Their route maps don’t overlap too much– JetBlue is primarily an east coast carrier and Virgin is big out west, and now in Hawaii. JetBlue has a nice foothold in the huge New York City market. Virgin is adored in San Francisco and Los Angeles. JetBlue boasts the modern, convenient airport terminal (T5) at JFK. Virgin has the state of the art T2 at SFO. The two carriers could share the mod Virgin Loft at LAX since they both operate out of Terminal 3 there. Both carriers fly Airbus narrowbody jets.
Related: 6 things about JetBlue
Virgin America will mark its 10th birthday this summer. The airline struggled during its first several years, but finally started to turn a profit in 2013. Since then, its fortunes have improved dramatically as the price of oil declined; its net profit number jumped from $10 million in 2013 to $60 million in 2014 and to $340 million last year.
Do you think Virgin is going to sell or merge? Thoughts below, please!
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