Alaska Airlines & Virgin America’s deal: Still delayed. We’re fatigued (Image: Alaska Airlines)
Here we are in December, and there’s still no final word on the long-awaited, much anticipated acquistion of Virgin America by Alaska Airlines. The deadline for the deal keeps getting pushed back…and today, we’ve learned of yet another delay. And another deadline…
Sources close to the dealmaking told TravelSkills a final decision by the Department of Justice (DOJ) is now expected by the “end of the year.” The takeover was initially announced last April with a goal of closing in the fourth quarter of this year. As the fourth quarter approached, a deadline of September 30 was set for the Department of Justice to give its okay to the deal… or seek to block it.
Then a new deadline of October 17 was set for the the DOJ decision. That date passed, and on October 20, Alaska Air CEO Brad Tilden said in an earnings call that, “there is a process at play” and “we’re not quite there yet.” Then the deal was hit by an antitrust lawsuit in San Francisco.
In early November, an image of a purported Virgin America – Alaska Airlines 737 with a new livery made the rounds, which has us all thinking a deal was imminent. But no. Then in mid-November, Virgin America lawyers said in a filing Northern District Court of California that “Alaska believes that Department of Justice review will likely be completed by the end of November.”
That blue tail could be the look of the future for Alaska Airlines (Photo: Brandon Farris)
So here we are in December and there’s still no DOJ decision. Virgin America and Alaska are still operating as two separate entities. Employees and members of both airline frequent flyer programs are waiting and wondering about the future. Fatigue about the whole affair is setting in…
What’s next? Well, insiders have told us this is how it will go down: The DOJ should complete its review by the end of December and issue a press release on the decision. Alaska Airlines will then respond to that decision (likely with a press release of its own). Once all parties are in agreement over the terms of the take over, the next step is for Alaska Air to take care of that pesky antitrust lawsuit in San Francisco opposing the merger. And then, after all that, we’ll see the deal go down.
So there you have it. Another deadline for a DOJ decision is now set for December 31. Will it happen? Who knows. But it’s a bit strange that a DOJ decision keeps getting pushed back, despite Alaska Airlines’ claims that progress is being made.
What do you think? Is this a done deal, or is it in jeopardy? Please leave your comments below.
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If Alaska Virgin Airways happens, and renamed “AVA” with the new livery of Alaska, and the red letters of AVA on the fuselage, it could turn out to be the next TWA………..so-to-speak. Ha !
How about bringing about some nostalgia, and combining onboard services with “Ambassador Service”. TWA had it right.
Reading in between the lines, her comment probably means that Justice is forcing Alaska to surrender gates at airports where it already has a strong presence, (i.e. Seattle, Los Angeles, San Diego…)
While those kinds of conditions are common, what’s probably unprecedented is the number of carriers that are affected. Each of Alaska’s hubs and focus cities is dominated by a *different* carrier. Delta wins if Seattle is where the most gates are relinquished, for example, but Southwest is the beneficiary if it’s San Diego…etc.
And don’t forget, Alaska’s and Virgin’s shareholders will only approve a deal that is favorable to them as well…
And then add how closely divided the industry is about the deal to begin with…(Delta and Jet Blue vehemently opposed…American and Southwest strongly in favor…and United somewhere in the middle.) This is going to make for a fascinating case study someday.
While checking in for a flight in SeaTac today, an employee said the issue was code-shares because AS+VX combined with the DL and AA deal would give AS the ability to tie up over 50% of the market in several cities on the west coast. Of course this is from a front line employee…so while she may work in the “boardroom” I don’t think she is privy to the real discussions that go on in the AS’ exec boardroom. Her take, was that Alaska wants to get rid of the Delta alliance but, of course, Delta isn’t going along. I pass along for what its worth.
That’s rarely been the case with other mergers — I have received status updates in the past, either directly from the acquiring company or under the letterhead of the company being acquired (but usually dictated/written by the acquiring authority). In this case, it’s been nothing but disturbing silence.
This is all politics anyone that has been around DC should see that “tree” for the forest. It will go through but the current administration being what is always has been “obstructionist” when it comes to corporate American is their lash $@%$@@%$# They know that after January it’s a new day. Let’s not also forget the CEO of Virgin US was a huge and early Trump supporter.
I for one ( a long time high mileage FF) welcome the merger. AS is getting lone in the tooth, service is in a decline ( cabin)
Just saying
Well to be fair, I would not expect Alaska to reach out to Virgin America flyers until the deal is done. As it stands now they are still two separate and competing airlines.
You and me both! ❤️✈️
Well if I see you in SF we can talk! It’s true. We as employees shouldn’t be live our concerns to our guests. Our goal is to make your day flying great. Not be a downer and talk politics. I love our guests at VX. I believe should it go through you will be status matched. They would be crazy not to take care of you and other premium travelers. I love all of your input it sounds as though you are a well traveled person! I’m hoping for the best as we all are. Change is never easy! I just love my little airline that could ❤️✈️
Thanks, Lora, for the feedback — obviously I haven’t spoken with you! ;^) Part of the enthusiasm I’ve heard, as you and I have both intimated, is of the “well, what would you expect them to say to a customer?” variety. But as an Elevate member since 8/10/2007 — the third day Virgin America’s Elevate program was open for sign-ups — I have something of a vested and highly personal interest in this — as do thousands of other loyal VX passengers, I’m sure. And, now that I think about it more carefully, as the merger has dragged on, the more recent comments I’m received do lean more towards the “wait and see” variety.
It’s Alaska that has shocked and disappointed me in all this — for example, talking to a number of Alaska’s employees (in various positions) and seeing the near-total lack of knowledge re: VX and lack of any sort of understanding about why/what made VX’s customers were so loyal. And as I alluded to above, I tried to get Alaska to match my Gold status but, to date, to no avail. I would have liked to try Alaska (I don’t think I flown them since 1998?), but haven’t yet — and won’t unless and until they match the status. Why should I, when VX treats me so well?
VX has, for me, made flying “fun” again, like it was in my youth when I’d fly PanAm jets to Europe or Hawai’i (I’m old enough that I still remember flying on 4-engine propeller places like a DC-6), and I’ll admit I was saddened when the news of the merger first broke. This was replaced by optimism, and then resignation . . .
Lora, I hope that — whatever the result of all this is — that things work out for you and the rest of the VX employees . . . as well as for us VX passengers.
I work for VX and I can say we are not all excited about the possibility of this merger. But you are correct that AS has tried to be very welcoming. As they should to future employees potentially! VX guests are very nervous/curious/anxious for a cutover and they openly ask us and we only can tell them we have to wait and see…..
Well, JetBlue was — of course — originally in the bidding, and it’s a merger than made far more sense *to me* (as a consumer). After all, it would have made from a stronger *national* carrier, let alone — from a logistics point-of-view — both fleets are exclusively Airbus.
But that aside, every Virgin employee I’ve ever spoken to — and I’ve asked over 2 dozen — have said they’re a) enthusiastic about the merger, and that b) Alaska has treated them very well so far. Now, the cynic in me asks, “What would you expect them to say?” but the replies and at-length conversations I’ve had puts my cynicism to rest . . . only to have it flare up again with these delays.
The one disappointment for me so far is how Alaska has treated Virgin America’s customers: they haven’t. It’s been stone-cold silence. No reaching out. No emails with updates on the merger. No nothing! (They haven’t even matched my status on Virgin despite submitted the requested documentation three times!)
Which begs mention of the possibility that JetBlue might jump into the mix…. hmmm
No news here-move along.
Alaska and Virgin are separately too small to compete head to head with the majors.
The DoJ’s Anti-trust Division should scupper the merger. More choice is better and Virgin America was not a big player at that, is a unique and good airline (well, it’s gone downhill since the merger announcement, but that was to be expected as no new investment and personnel bolt for the exits). The U.S. has seen a ruthless consolidation in the past 5 years, and enough is enough. The last thing any company in a free market system wants is competition. The more mergers the closer to the one airline for all will become reality. Welcome to the USSR and Aeroflot.