Virgin America touches down in Palm Springs on a cold winter day (Photo: Chris McGinnis)
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.
A JetBlue A321 parked at SFO this week- here to celebrate launch on Mint service on SFO-BOS (Photo: Chris McGinnis)
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!
NOTE: Be sure to click here to see all recent TravelSkills posts about: Should I tip my Uber driver? + Boeing 747 nearing its end? + Bargain hunters travel guide for 2016 + World’s best airline lounge? + Fares to Europe tumble
Do you follow us on Twitter? It’s a great way to keep up with the latest news!
Please join the 125,000+ people who read TravelSkills every month! Sign up here for one email-per-day updates!
Breaks my heart to think about it
Want to see Virgin destroyed? Let Delta take it over!!
Enough to make a person upchuck their meal!
OMG! Good catch. We updated the page.
Best typo ever ” In the fall of 2014, Virgin went pubic “. My life is forever changed.
Ugh, I sure hope they don’t get bought (although combining the Jetblue and Virgin route maps would be great, and I like both of their products). It’s so nice having a decent carrier operating out of my home airport.
The only airline that would not complete destroy the feel of VX is Jet Blue but clearly Jet Blue is not Virgin America. I don’t feel like Jet Blue management has much respect for its customers. I would not be surprised if VX is for sale. Both the “in flight team members” and pilots voted to unionized last year. Of the three major carriers I would only think of using Delta and only if there are not alternatives, VX, Southwest (only okay for flights under 2 hours), Jet Blue, a foreign carrier. Jet Blue is fine to fly on but the west coast seems to be an after thought when it comes to schedule and frequencies.
I think you can forget about UA. Firstly, there is way too much overlap in their route network, it would never get government approval. Secondly, UA’s merger with Continental was an unmitigated disaster that is still not finished; I doubt they’d try another one.
Oh no… this is not good. I enjoy flying VX and I consider it to be my primary carrier of choice (e.g. I don’t need to fly the big three carriers anymore).
If VX is swallowed up by one of the big three, whatever unique character this airline has spent a decade to develop could be lost. Could be.
I’m sure there’s a possibility that being sold might not affect anything on a day-to-day basis for VX, but I can’t see anything positive happening if Delta or UA acquires them.
Just my opinion.
JetBlue is basically a one trick pony. Its major successes come from NYC/Northeast to Florida. The rest is far secondary and greatly expanding that secondary just brings more secondary. Virgin passenger experience is better, since the airline was designed for the more upscale passenger. Basically the only thing B6 and VX have in common is the aircraft fleet.