December 14, 2016
Alaska Air & Virgin America Finalize Merger, become Fifth Largest US Airline

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Straight to the Point

Alaska Air has completed its acquisition of Virgin America and will become the fifth largest U.S. airline by annual passenger volume.


Overview

Back in April, Alaska Air announced that it would be acquiring Virgin America. Since then we haven’t gotten many updates as the two airlines have been working to get all the regulatory approvals. One interesting point  is that Virgin America’s founder, Richard Branson, came out against the deal when it was first announced. Well, as per a news release today, the merger has officially been finalized.


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What You Need to Know

  • Alaska Air will become the fifth largest U.S. Airline.
  • The combined route network will have 1,200 daily departures to 118 destinations.
  • The combined airline will have a huge network on the West Coast, offering more nonstop destinations from the West Coast than any other airline.
  • Starting Dec. 19, Virgin America Elevate members and Alaska Mileage Plan members can earn rewards across both airlines. Elite members will receive priority boarding and check-in on both airlines’ flights.
  • Starting January 9, Virgin America Elevate members will be status matched to Alaska Mileage Plan.
  • There’s no announcement yet about a merger of the two rewards programs. Alaska has just said: “Beginning January 9, Virgin America Elevate members will be invited by Alaska Airlines to activate new Mileage Plan accounts.”
  • Starting Dec. 19, customers can purchase Virgin America tickets on AlaskaAir.com.
  • Virgin American will continue to fly as a separate brand with no immediate changes to its onboard service. Alaska will be conducting market research to determine what’s the best path forward in terms of whether or not to merge the two brands.
  • If you need a refresher on Alaska Air’s rewards program, checkout my overview here.

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Combined Route Network


Final Thoughts

It’s great that Alaska is releasing all these details and offering reciprocal benefits quickly. Generally, I’m not a fan of airline mergers as it reduces competition and can lead to higher prices for consumers. However, in this case there might not be a whole lot of negative changes. Consider that as of 2015, Alaska and Virgin America flew a combined 39 million passengers compared to 140-200 million each for the four largest US airlines. That won’t give the new Alaska a whole lot of leverage in terms of raising prices but will give it a stronger ability to compete against the larger airlines.

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