Alaska Air Finalizes Acquisition of Virgin America

December 14, 2016 Smart Meetings

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Alaska Air Group has now completed its acquisition of Virgin America. The merger was first announced in April, then approved by Virgin America shareholders in July. In the coming year, the two airlines will need to secure a Federal Aviation Administration certification in order to operate as a single carrier. Regional carrier Horizon Air, also owned by Alaska Air, will continue to operate with its own certificate.

The acquisition was a coup for Alaska, which had to overcome a fierce bidding war with JetBlue in April. Alaska purchased Virgin for $57 a share, for a total equity value of $2.6 billion.

The combined airline boasts a greatly expanded network with close to 1,200 daily flights to 118 destinations in the United States, Mexico, Canada, Costa Rica and Cuba, although Americans’ access to Cuba may be in jeopardy during the incoming Trump presidency. During his campaign, President-elect Donald Trump vowed to reverse thawing relations between the two countries.

Although the two airlines will operate as one, they will remain two distinct brands. To celebrate the merger, Alaska has debuted a special co-branded Boeing 737 that combines Virgin’s colors of red and purple with Alaska’s blue. In the coming year, Alaska plans to do market research and make a decision on the future of the Virgin America brand.

Currently, both airlines’ loyalty programs will remain intact, though there will be some overlap. From Dec. 19, Virgin America Elevate members and Alaska Airlines Mileage Plan members can earn rewards on both airlines’ flights, and elite members will receive priority check-in and boarding privileges on both airlines. Travelers will also be able to purchase tickets for Virgin America flights on Alaska’s website.

“Alaska Airlines and Virgin America are different airlines, but we believe different works—and we’re confident fliers will agree,” said Brad Tilden, CEO of Alaska Air Group. “Together, we’ll offer more flights, with low fares, more rewards and more for customers to love, as we continue to offer a distinctive travel experience. The two airlines may look different, but our core customer and employee focus is very much the same.”

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