Flyers Sue to Prevent Alaska Airlines-Virgin America Merger

Lawsuit alleges merger would “poses a substantial threat” to flyers across the country.

A group of 42 flyers are attempting to block the proposed merger of Alaska Airlines and Virgin America, claiming that such a merger would reduce consumer choice and cut American jobs. The lawsuit, Grace, et al v. Alaska Air Group, Inc. et al, was filed in U.S. District Court in San Francisco on September 8 by attorney Joe Alioto, on behalf of the flyers.

In April, Alaska Air Group, the parent company of Alaska Airlines, announced their planned purchase of Virgin America for around $4 billion. However, the 78-page lawsuit alleges that the potential merger would violate the Clayton Antitrust Act by reducing consumer choice in the aviation marketplace. Attorneys point to increasing airline fees and a reduction of service across markets.

“The proposed elimination of Virgin America by Alaska Airlines poses a substantial threat to the Plaintiffs, and to the public at large,” attorneys for the flyers allege. “In that the proposed elimination will only serve, as the Supreme Court warned, to ‘reduce available consumer choice while providing no increase in industry capacity, jobs or output,’ and may lessen competition in each of those product and geographical markets designated by Alaska.”

In addition, the attorneys accuse the executives of America’s “Big Four” airlines – all three legacy carriers and Southwest Airlines – of colluding to set prices on commercial airfare. The lawsuit accuses the major airlines of monopolistic practices, adding “abusive and discriminatory charges and fees against a helpless public” and manipulation of supply and demand.

The lawsuit is Alioto’s second attempt to stop a major airline merger. In 2014, the Dallas Morning News reported Alioto took both American Airlines and US Airways to court to bring down their merger.

In a statement, a spokesperson for Alaska Airlines dismissed concerns about the lawsuit and said that the airline is continuing to work toward closing the deal by the end of September.

“We’re making good progress toward fulfilling the DOJ’s second request for information,” Alaska Airlines spokesperson Ann Zaninovich told the Las Vegas Sun. “We fully expected various litigation following our April 4th announcement and are not surprised by this particular firm, who has a history of making these types of filings.”

Grace, et al v. Alaska Air Group, Inc. et al (Full Text)

[Photo: Virgin America]