After some weeks of speculation, Alaska Airlines airlines announced this morning (Monday, April 4) that it is buying Virgin America, to produce an airline that will take the #5 spot away from JetBlue, another bidder for Virgin.
Alaska’s CEO Brad Tilden told CNBC “We will be the airline of the West Coast,” with hubs in Seattle, SF, LA, Anchorage and Portland. Virgin also has routes between the West Coast and New York and Chicago. Alaska’s routes include a number of non-West Coast routes, mainly feeding Midwest and East Coast traffic to the West, or West Coast traffic to Florida.
For loyalty plan members, questions remain. Virgin America’s plan, called Elevate, will transition its members into Alaska’s MileagePlan program, but details of how points will be evaluated and moved have not been released. Neither airline is a member of one of the big alliances, although Alaska has had codeshares and points exchanges with numbers of alliance members.
Alaska is paying $57 a share for Virgin, a significant “premium” over the recent market price of $38.50. Alaska’s headquarters will remain in Seattle. Alaska said it intends to apply for a “single operating certificate” from the FAA, which would allow it to operate as a single airline, but did not say whether it would eliminate the Virgin brand. Under an SOC, all codes would be combined, but a name change on the planes would not be mandatory.
Photo provided by Alaska Airlines
