warreng24

http://splash.alaskasworld.com/Newsr...404_025411.asp

I wonder what happens to the "Proudly all Boeing" on the noses of the 737's?

sfozrhfco

Wow, $2.6 billion is the deal. AS management just got seriously played by B6. Paying double what the company was worth just a few weeks ago is verging on insanity. Good luck to AS in keeping the VX customer base. They will need it.

77W_12A

I was reading TPG and he's saying the deal is roughly $4 billion dollars.

http://thepointsguy.com/2016/04/alas...irgin-america/

sfozrhfco

$2.6 billion for the stock buy out and taking on $1.4 billion of VX debt.

77W_12A

Yeah, I just read that part. Too early in the morning.

channa

Who said they're going to keep that route?

If it doesn't make financial sense, and they have a codeshare deal with AA, maybe it's worth eliminating and using those planes elsewhere.


Letting B6 buy the airline and turn into a more formidable competitor would have been insanity. This deal is certainly expensive, but it's strategically brilliant.

david55

I know a lot of people that fly SEA-SFO and stopped using AS several years ago going exclusively with Virgin because of how nice it was, even in coach, and easy to get upgrades to what was a far superior FC.

I am sure they are very unhappy at this news.

sfozrhfco

Exactly. That is how Virgin has thrived in the Bay Area. Going to the AS product makes UA which many people dislike look much more attractive and AS adds nothing except for a few extra non stop frequencies to PDX/SEA/PSP/SLC--all of which already had service with VX except for SLC-- and those flights on AS are not exactly at convenient times for most people.

3Cforme

If maintaining the VX product and network were the best strategy for investors going forward VX wouldn't be selling itself. The VX business/service model has failed. If it hadn't been for earlier debt-for-equity swaps, for UA's repeated shooting itself in the foot, and for the massive decline in fuel prices, it would have failed spectacularly.

BearX220

That is correct. This was a buy-or-die moment for AS. It's a $4bn life insurance policy.

gobeavs8

Nope, Alaska getting rid of the 23rd largest metro area hub where you are the largest player by far to compete in highly contested areas in California would be literal company suicide.

Long Train Runnin

That article makes sense to me. Sure it's a couple years away. but as an AA flyer out of EWR it would be nice to add non stops to SFO, and LAX out of rinky dink terminal A.

dgreen12

Complementary, Alaska.

BearX220

I think that's incorrect.

VX would likely be dead by now were it not for two strokes of luck: the fuel price collapse and UA's post-merger meltdown, which drove numerous SFO customers to VX. Before those events VX always lost mountains of money and the next oil shock / recession / etc. would probably have finished them. As for AS, its odds of survival as is would have been much diminished by a large bicoastal B6+VX tieup.

dave1013

From email just received:

Creating the Premier West Coast Airline.

Good morning, dave1013. As one of our most valued customers, we wanted to be the first to share with you some exciting news that Alaska Airlines is acquiring Virgin America, combining two leading airlines both known for low fares and award-winning customer service. With complimentary West Coast-based networks, operational excellence and a strong commitment to innovation, the joining of Virgin America and Alaska will expand our existing California footprint and grow our transcontinental network, giving you more travel options with 1,200 daily departures nationwide.

We'll keep you updated on the timing and plan for integrating our two airlines.

Thank you for continuing to fly Alaska. We look forward to serving you on your next flight.