Alaska Completes Virgin America Acquisition

Alaska Air Group has closed its acquisition of Virgin America and is beginning the consolidation process. Next year, Alaska and Virgin America will pursue a single operating certificate from the U.S. Federal Aviation Administration, and they expect to obtain it by early 2018. Alaska has not, however, decided whether to operate Virgin America as its own brand and is conducting "extensive customer research" to inform that decision, according to the company. Alaska CEO Brad Tilden said that decision will come early next year and Virgin America flights will undergo no changes in the meantime. "Alaska Airlines and Virgin America are different airlines, but we believe different works—and we're confident fliers will agree," Tilden said. "This is a big decision and one that deserves months of thoughtful and thorough analysis."

As of Dec. 19, Alaska will sell Virgin America tickets on its website, though Virgin America's website will continue to operate for the time being. The carriers also will begin frequent-flier reciprocity at that point, and early next year, Alaska will begin inviting Virgin America Elevate members to activate Alaska Airlines Mileage Plan accounts.

Alaska will maintain its headquarters in Seattle and has enacted a leadership plan it announced earlier this year. Alaska president and COO Ben Minicucci now leads the Virgin America subsidiary as CEO. Peter Hunt, who had been Virgin America senior vice president and CFO, will serve as president of the Virgin America subsidiary and report to Minicucci until the carriers get a single operating certificate. David Cush, who had been Virgin America president and CEO, was not mentioned in Alaska's announcement of the acquisition.

The closing came a week after Alaska secured antitrust clearance from the U.S. Department of Justice, with the stipulation that Alaska give up some of its codeshares with American Airlines.

The combination of the two carriers pushes Alaska past JetBlue to become the fifth-largest U.S. carrier, with more than $7 billion in annual revenue and about 1,200 flights daily to 118 destinations, according to Alaska. From California airports alone, Alaska now has 289 flights to 52 destinations.

Alaska also announced it will begin new routes from its freshly acquired San Francisco hub next summer: one daily flight to Orlando, two daily flights to Minneapolis and four daily flights to Orange County, Calif.