Alaska Air’s takeover of Virgin America is ready for take off. (Image: Alaska Airlines)
At long last, the Department of Justice has approved Alaska Airlines’ acquisition of Virgin America. In order to get the deal done, all Alaska has to do is unload 45 code share routes with American Airlines- and deal with a pesky lawsuit. UPDATE: Dec 7> Alaska announced that is has settled this lawsuit, but did not disclose terms
Interestingly enough, Alaska’s partnership with frenemy Delta Air Lines will likely remain intact. And Alaska won’t have to give up any gates at SFO or LAX as had been speculated.
A press release from Alaska states: “Alaska did agree to implement limited changes to its codeshare agreement with American Airlines. The majority of Alaska and American codeshare flights will remain intact. The DOJ did not require changes to any other agreements between Alaska and American, including interline or reciprocal loyalty agreements, or any of Alaska’s other airline partnerships.”
Graphic touting the strengths of the combined carriers from Alaska Air’s SEC filing
Read: Alaska Airlines SEC filing regarding the deal.
What’s next? Now that the DOJ has concluded its review and all parties seem to be in agreement over terms of the takeover, the next step is for Alaska Air to take care of that pesky antitrust lawsuit in San Francisco opposing the merger. [UPDATE: Dec 7> Alaska announced that is has settled this lawsuit, but did not disclose terms] A group of 41 fliers and travel agents is suing Alaska Airlines, saying that the takeover of Virgin will lessen competition resulting in higher fares and fees. A US district judge in San Francisco has said that a trial would take place soon after the DOJ decision- so stay tuned for more on that…
In regard to the lawsuit, Alaska Air says that, “Lawsuits of this kind are not uncommon with mergers. The company believes the plaintiffs’ claims are without merit and plans to defend its acquisition of Virgin America accordingly.”
Virgin’s “business as usual ” notification on its website
Right now, it’s still business as usual for both carriers until the deal officially closes- and no changes to inflight experience for 12 months. For example, Virgin is currently offering a great deal for those interesting in first class tickets home for the holidays. Flyers should not expect to see or hear many details until the civil lawsuit is out of the way- and that could happen in a matter of weeks. UPDATE: Dec 7> Alaska announced that is has settled this lawsuit, but did not disclose terms
What will happen to the Virgin America brand? Bloomberg reports, “The company will retain the Alaska Air name, brand and Seattle headquarters. It will explore how the Virgin America brand, which grew out of U.K. billionaire Richard Branson’s business empire and has strong customer loyalty, might be used in the combined airline, Alaska Air has said.”
So what do you think? Are you ready for the deal to be done, or should it be blocked for competitive reasons? It remains to be seen what Alaska plans to do with the Virgin America brand. Thoughts?
The combined networks of Alaska Air and Virgin America (CLICK for clearer image, more info)
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This merger is another loss for consumers. There will be years of integration pains and will result and an overall worse product with higher fares. No airline merger has provided increased competition and better service. None. I’ve been flying Virgin a lot, enough to maintain Gold status, but will probably shift my flying over to United who has far better flight options out of SFO and avoid the disaster of a merger run by amateurs.
Unless Alaska begins offering the same amenities as VX, including the seating and cabin classes, loyal VX flyers like me are gonna look elsewhere. Jet Blue recently began a new premiere service on their transcon flights–that could be a good opportunity for them to gain VX flyers should Alaska not deliver.
So what are the “limited changes” that will be made to the codeshare agreement? Will AA Admirals cardholders still have access to Alaska lounges in cities where there’s no Admirals Club?
I agree Jet blue is decent. But if you live/work on West Coast, Alaska is a very good option. Southwest I still won’t fly as a business traveler. And from coast to coast it takes too long.
I would rather have seen JetBlue take it, unless Alaska decides to keep the brand intact. I have no interest in flying the Alaska product. Generally now if I can’t take Virgin, I use Southwest.
Virgin is a great airline. Alaska
is better than the other big american carriers, so I am glad they bought them versus another airline.
A bummer that Virgin even had to be bought out. That was my favorite airline. I wish it could have remained separate.