Alaska Air-Virgin America Merger Set for Takeoff

By Jesse Sokolow on 6 December 2016
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IMG_4341The U.S. Department of Justice approved Alaska Air Group’s acquisition of Virgin America on Tuesday, but put several conditions in place that require Alaska to prune its partnership with American Airlines.

The $2.6 billion merger, first announced in April, would create the nation’s fifth-largest airline by traffic, eclipsing JetBlue Airways, which attempted to outbid Alaska for Virgin America.

Even in the number five slot, the combined carrier will still be far smaller than the four largest airlines in the United States, namely American Airlines, Delta Air Lines, United Airlines, and Southwest Airlines, which control some 80% of the market.

“We couldn’t be more excited about receiving DOJ clearance for our merger with Virgin America,” said Brad Tilden, Alaska’s CEO.

In order to proceed, Alaska agreed to reduce the number of codeshares with American, although the majority will remain in place. The DOJ did not require any other changes to any other agreements between the two carriers or with any other Alaska partner.

The merger, Alaska said in a statement, is likely to close “in the very near future.”

(Photo: Accura Media Group)

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