The Virgin America and Alaska Airlines Merger Could Close Soon
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Update 9/26/16: Following a discussion with the Justice Department, Alaska has confirmed that it won’t merge with Virgin America prior to October 17, 2016.
On the heels of the huge Marriott-Starwood news from earlier, it seems that the theme for today is mergers. In April, Alaska Airlines made news when it announced its deal to acquire Virgin America. Just a few months later now and it looks like the merger is on track to close around the same time the airline was expecting. On the legal front, it’s definitely been making progress, and we could see it close as soon as next week.
The US Justice Department effectively has until September 30 to either allow the deal to finalize or to block it. The merger, which is worth $2.6 billion, is in its final stages, and officials from the airlines met with the chief of the Justice Department’s antitrust division to address concerns that the merger could hurt competition. It’s unclear if the parties involved discussed extending the deadline, however, if the DoJ doesn’t seek to block the merger or approve it by September 30, the merger could be finalized as soon as next week.
If the merger is to close, the largest four airlines (United, Delta, American and Alaska) will control 80% of the US market. However, Alaska says that the Virgin America acquisition wouldn’t hurt competition, as the carrier’s just expanding its existing route network that’s primarily on the West Coast with the addition of more frequencies at several large airports on the East Coast, such as New York (JFK and LGA) and Washington, D.C. (DCA).
While the merger seems to be on track for its fourth-quarter closing timeline, there still isn’t much known about the future of the two programs aside from the fact that Alaska has said it might keep the Virgin America brand — good news for loyal Virgin America flyers.
What do you think of the Alaska-Virgin America merger?