This morning, Alaska Air Group officially announced its $2.6 billion deal — or $57 per share — to acquire San Francisco-based Virgin America, bolstering its West Coast presence.
It was an announcement that came after a bidding war with Jet Blue, and appears to be in response to Delta Airlines’ increasing encroachment in the West Coast market.
“With our expanded network and strong presence in California, we'll offer customers more attractive flight options for nonstop travel,” said Brad Tilden, chairman and CEO of Alaska Air Group. “We look forward to bringing together two incredible groups of employees to build on the successes they have achieved as standalone companies to make us an even stronger competitor nationally.”
Virgin will bring to the table its fleet of 60 Airbus A319 and A320 aircraft, creating a total of 280 aircraft and 1,200 daily departures, with several hubs from California to Alaska. Together, annual revenues are projected to be more than $7 billion.
The two airlines expect to complete the merger no later than Jan. 1, 2017. The combined companies will be based out of Seattle and helmed by Tilden. And over the next few months, the companies will consider what they will do with the Virgin America brand and how it “could continue to serve a role in driving customer acquisition and loyalty.”
The merger was approved unanimously by both boards of directors.