Alaska Air Group has closed its acquisition of Virgin America, just days after the deal was cleared by the Antitrust Division of the US Department of Justice (DOJ).
The definitive merger agreement was signed in April and approved by Virgin America shareholders in July. The DOJ gave the deal the green light on December 6 on condition that Alaska Airlines implements “limited” changes to its codeshare agreement with American Airlines. Alaska Air Group, the parent company of Alaska Airlines, was not required to divest any assets. The deal was closed on December 14.
“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.”
Over the next year Alaska Airlines and Virgin America will work together to secure Federal Aviation Administration (FAA) certification to allow the two
airlines to operate as a single carrier. No decisions have been taken regarding the future of the Virgin America brand. Alaska says it will continue to operate the Virgin America fleet with the current product and name “for a period of time” to allow it to undertake extensive customer research “to understand what fliers value the most”. One decision Alaska, an all-Boeing 737 operator, faces is whether to keep Virgin America’s all-Airbus A320 Family fleet.
“We appreciate there is great interest in the future of the Virgin America brand among customers and employees alike,” said Tilden. “This is a big decision and one that deserves months of thoughtful and thorough analysis.”
Tilden will lead the combined company while Ben Minicucci becomes CEO of Virgin America in addition to his responsibilities as COO and President of Alaska Airlines. Peter Hunt, previously Virgin America Senior VP and CFO, will now serve as president of the subsidiary. The company say Minicucci and Hunt’s positions are effective immediately and remain in force until a single operating certificate has been obtained from the FAA, expected in early 2018.
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