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Virgin America Stock Skyrockets After Takeover Offers From JetBlue, Alaska Air

Virgin America’s shares have risen over 10 percent following reports that JetBlue and Alaska Airlines are interested buyers. Virgin America has apparently put itself up for sale and has drawn interest from the two aforementioned companies.

Sources close to the matter who wish not to be identified say that discussions between Virgin America and the two carriers are ongoing, but that “a deal could be announced as soon as next week.” However, there is also the possibility that the company will pursue other options or even remain independent.

Following a Bloomberg report last week that Virgin America was considering putting itself up for sale, the company’s stock has soared to record highs. According to reports, Virgin America shares jumped as much as 15 percent, and closed up 10 percent at $37.70 Monday. JetBlue gained 2.7 percent to $20.79, while Alaska increased 1.1 percent to $81.49.

Helane Becker, a Cowen & Co. analyst, commented the move. “If [Virgin America] were to sell itself, JetBlue would make the most sense from an aircraft, network and product offering perspective,” she said in a report this Monday.

Virgin America flies to destinations all over the U.S. and Mexico. If JetBlue were to acquire Virgin America, they would gain a larger presence on the West Coast, including in Los Angeles and San Francisco. A larger reach in the western part of the country would complement JetBlue’s major presence in New York and network along the U.S. East Coast and in the Caribbean.

On the other hand, if Alaska Airlines were to buy Virgin America, they could expand their routes to Mexico and eliminate a West Coast rival.

Neither Alaska Airlines nor JetBlue would comment on the speculation. Virgin America could not be reached for further comment on the matter.

[Photo: Virgin America]

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3 Comments
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edgewood49 March 30, 2016

I agree with you on JB while I am a high mileage FF with AS, do think though that Virgins service of late is that much higher than AS hey AS is making money and has the most loyal following in the industry. Here is the issue if JB prevails and most likely will then what does AS do? They will be in the position forcing them to look around at possibly acquiring another smaller carrier to counter this one

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OVERSIER March 30, 2016

It makes since for JetBlue as their fleets are compatible . Alaska service level is much lower than that of Virgin, fleet is all Boeing so I don't se this happening . JB is a perfect match .

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edgewood49 March 29, 2016

I'm all in on AS buying. They can sell the AB's to DL !