After days of speculations, Alaska confirms its plan to acquire Virgin America in a deal valued at approximately $2.6 billion. The merger is set to make Alaska Air as the biggest carrier on the West Coast and the fifth largest in the US based on the market share.
The New York Times reported the deal is expected to control 5.5% of all domestic passengers, beating JetBlue that currently holds 4.2%. It is reported that Jetblue had shown interest to buy Virgin America, but a huge bid placed by Alaska Air pushed the company out of the deal.
The combined Alaska Airlines and Virgin America will operate approximately some 1,200 flights per day from hubs in Seattle, San Francisco, Los Angeles, Anchorage and Portland, Ore. By comparison, American Airlines Group, the world's largest carrier, has about 3,400 daily flights.
Currently, Alaska Air has more than 200 aircraft, and most of the company's fleet is comprised of Boeing 737s. For Virgin America, it only owns about 60 aircraft.
Some customers ask what will happen to the frequent flyer programs of both companies. Alaska's Mileage Plan has great partnerships with international carriers like British Airways, Air France/KLM, Emirates, Korean Air, Cathay Pacific, Qantas and LAN. On the other hand, Virgin America's Elevate program has only five partners.
"We are still determining how we will combine the programs," Ann Zaninovich, Alaska Airlines spokesperson, told in Forbes. The deal is said to happen in the first quarter of 2017. For now, the two programs will continue to operate separately.
So, how will customers react to deal? Industry experts say only time will tell. If Alaska Air decided to continue the excellent customer service of Virgin Airlines, the deal should be just fine. It is also worth mentioning that Alaska Air is outstanding when it comes to flight punctuality and customer service.
Virgin Airline is known for its entertainment systems, trendy mood lightning, delicious meals and friendly crews. For Alaska Air, they might be affordable but it is not known for being trendy to young passengers.
It is expected the merger deal between these two airline firms would bring better flight programs. The two are known for being leaders in customer service programs, and the Alaska Air needs the Virgin's trendy reputation to become the choice of next-generation travelers.
