Alaska Airlines have announced that they will purchase Virgin America for more than $2 billion, beating JetBlue's bid. This is its only acquisition since the late 80s with the purchase of Horizon Air and Jet America.
Despite this, the merger will most likely not end up perfectly. Alaska Airlines operates (excluding Horizon) an all Boeing 737 fleet while Virgin America operates only Airbus A319s and A320s, all of which are leased. On top of that, its office space and equipment are leased, and the Virgin brand owns the name. What's left? A small frequent flier program, gates, and slots.
Last year Vigin America recorded a record-setting profit of $201.5 million. Even then, it will take Alaska over a decade to break even, excluding other investments...
Despite this, the merger will most likely not end up perfectly. Alaska Airlines operates (excluding Horizon) an all Boeing 737 fleet while Virgin America operates only Airbus A319s and A320s, all of which are leased. On top of that, its office space and equipment are leased, and the Virgin brand owns the name. What's left? A small frequent flier program, gates, and slots.
Last year Vigin America recorded a record-setting profit of $201.5 million. Even then, it will take Alaska over a decade to break even, excluding other investments...
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