Alaska Acquisition - DOJ deadline extended

Old Sep 23, 16, 1:14 pm
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Alaska Acquisition - DOJ deadline extended

I'm hoping that the DOJ recognizes that there is nothing in this merger that benefits the consumer. Glad this is getting the scrutiny this terrible acquisition deserves.

Justice Department Gets More Time to Study Alaska Air, Virgin America Merger

http://www.wsj.com/articles/justice-...ger-1474654495
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Old Sep 23, 16, 2:18 pm
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VX's flight attendants also rejected their contract offer this week too. AS will have to move VX's staff up closer to AS employee wages which will likely increase their costs sooner than expected. We will have to wait and see if they have to give up any gates at LAX/SFO and what they will end up doing with DAL.
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Old Sep 23, 16, 2:19 pm
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What are your concerns about this merger?

Thank you..
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Old Sep 23, 16, 2:21 pm
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Here is a link to Bloomberg's article on the same subject. It is an open link.

http://www.bloomberg.com/news/articl...re-review-time

Like it or not, I would guess approval after some blustering. The airline mergers always seem to take a while.
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Old Sep 23, 16, 4:16 pm
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Originally Posted by bo1953 View Post
What are your concerns about this merger?

Thank you..
It is not a merger and personal concerns don't really matter much when it comes to approving an acquisition. Alaska is buying out Virgin not merging with it.

There are issues with the gates at DAL which will be a mess for a while. AS's overall labor costs will definitely go up as VX's payscale is quite a bit lower now and employees will not be happy if they are absorbed into the new company and are paid less. They may have to give up gate space at SFO or LAX where demand outstrips supply. Don't think anybody really cares about SEA/PDX. VX does not really add much to what AS already has there.
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Old Sep 23, 16, 4:37 pm
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Originally Posted by sfozrhfco View Post
It is not a merger and personal concerns don't really matter much when it comes to approving an acquisition. Alaska is buying out Virgin not merging with it.
I agree with your excellent points. But wasn't there a concern that VX was not entirely healthy financially, and that airline was put up for sale as a result?

How fast would JetBlue enter the picture should the AS-VX plan fall through?

(Edit: What am I saying? If the DOJ doesn't approve AS-VX, why would they approve B6-VX?)

Last edited by StirredNotShaken; Sep 23, 16 at 4:38 pm Reason: I should wait a second before clicking Submit...
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Old Sep 23, 16, 6:02 pm
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Originally Posted by StirredNotShaken View Post
I agree with your excellent points. But wasn't there a concern that VX was not entirely healthy financially, and that airline was put up for sale as a result?

How fast would JetBlue enter the picture should the AS-VX plan fall through?

(Edit: What am I saying? If the DOJ doesn't approve AS-VX, why would they approve B6-VX?)
B6 has more overlap re: the NYC markets. It would be slightly worse in the antitrust dept.
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Old Sep 23, 16, 7:18 pm
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Virgin gets 40% of its revenue from transcons. At the same time Jetblue dropped the average fare for premium seats by 1/2 since the introduction of Mint. The massive reduction in oil prices has improved VX's financial position but they are still quite vulnerable. Paying much higher salaries and still bringing in the same revenue will not be great for AS. AS's desperation gives a big windfall to VA share holders but I would contend that AS still has a lot of headaches ahead. They won't be dominant in either SFO or LAX and don't have the same fan base as they have in the PNW. We will see how much of a drag it ends up being on AS.
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Old Sep 23, 16, 7:36 pm
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Not sure why people think it means anything that the parties gave DOJ more time to review the proposed deal. Of course they did, it's always better than a lawsuit.

But, anybody who thinks that this deal is a merger cannot possibly have read even the topline deal terms which are fully public.

With some minor tweaks, this acquisition will be approved, just like the other deals.
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Old Sep 23, 16, 10:57 pm
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Lest we forget, AA/US took 10 months for DOJ to approve, and WN/FL took 7 months.

AS/VX was announced in early April, meaning we haven't even hit the six month mark. AAG and VX have jointly announced they're giving DOJ extra time to review the deal, which is still expected to close in early Q4.

The only people who believe this deal will fall through are those who are actually hoping for that to occur.
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