Alaska Airlines Confirms Deal to Acquire Virgin America
Alaska Airlines just confirmed its plans to acquire Virgin America in a post on... Instagram.
According to a CNBC report, Alaska will purchase Virgin for $57 per share in a deal that's valued at roughly $4 billion in total, including debt, beating the top offer of bidding war partner JetBlue. That's a HUGE jump over Virgin America's public valuation of $1.48 billion as of Friday, based on its share price of $38.90. Shares are Virgin are up nearly 35% in pre-market trading, to $52.25 per share. That's still shy of Alaska's purchase price, so the stock may continue to climb throughout the morning.
The all-cash deal, which was apparently signed Friday night following a bidding war that may have put Marriott/Anbang/Starwood to shame, was expected to be announced today. According to a WSJ article, JetBlue backed off once the bidding jumped too high.
Once combined, Alaska and Virgin will make up the country's fifth most popular airline by traffic, unseating JetBlue, which currently ranks #5. Alaska would also get hubs at two key West Coast airports — Los Angeles (LAX) and San Francisco (SFO) — and a fleet of Airbus A320s (which may ultimately present a challenge for Alaska, which currently operates only Boeing 737 aircraft).
As for consumers, passengers will have fewer airline options following the merger, of course, but there's no question that Virgin's fleet represents an upgrade for Alaska flyers, with its high-tech cabins, comfier seats and superior catering options. Alaska, meanwhile, offers an arguably more comprehensive frequent-flyer program, giving current Virgin elites an opportunity to earn and redeem miles on a variety of US-based and international carriers.
What do you think of an Alaska/Virgin America merger?
H/T: CNBC
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| 2X miles | 2 miles per dollar on every purchase |
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Earn 200K miles when you spend $30K in the first 3 months, and an additional 200K miles when you spend $150K in the first 6 monthsLIMITED-TIME OFFER: Earn up to 400K bonus milesAnnual Fee
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Why We Chose It
The Capital One Venture X Business Card has all the Capital One Venture X Rewards Credit Card has to offer and more. It offers an incredible welcome bonus and requires an equally impressive spend to qualify. In addition, the card comes with premium travel perks like annual travel credit. (Partner offer)Pros
- The Capital One Venture X business card has a very lucrative welcome offer.
- In addition, the card comes with many premium travel perks such as an annual $300 credit for bookings through Capital One Business Travel.
- Business owners are also able to add employee cards for free.
Cons
- The card requires significant spending to earn the welcome offer.
- Another drawback is that the annual travel credit can only be used on bookings made through Capital One Business Travel.
- LIMITED-TIME OFFER: Earn up to 400K bonus miles: 200K miles when you spend $30K in the first 3 months, and an additional 200k miles when you spend $150k in the first 6 months
- Earn unlimited 2X miles on every purchase, everywhere—with no limits or category restrictions
- Earn 10X miles on hotels and rental cars and 5X miles on flights and vacation rentals booked through Capital One Business Travel
- With no preset spending limit, enjoy big purchasing power that adapts so you can spend more and earn more rewards
- Empower your teams to make business purchases while earning rewards on their transactions, with free employee and virtual cards. Plus, automatically sync your transaction data with your accounting software and pay your vendors with ease
- Redeem your miles on flights, hotels and more. Plus, transfer your miles to any of the 15+ travel loyalty programs
- Every year, you'll get 10,000 bonus miles after your account anniversary date. Plus, receive an annual $300 credit for bookings made through Capital One Business Travel
- Receive up to a $120 credit for Global Entry or TSA PreCheck®. Enjoy access to 1,300+ airport lounges worldwide, including Capital One Lounge locations and Priority Pass™ lounges, after enrollment
- Enjoy a $100 experience credit and other premium benefits with every hotel and vacation rental booked from the Premier Collection
- This is a pay-in-full card, so your balance is due in full every month