Alaska Airlines is buying Virgin America for $2.6 billion.
That’s quite the evolution for what began as an Alaska-based flyer taking folks to and from Anchorage on a three-seater plane in the 1930s.
To us in the Northwest, Alaska Airlines is as common as any other carrier. However, many folks outside our region aren’t familiar with the airline even though it flies to more than 100 destinations in the U.S. and abroad.
Delta Airlines has come into Alaska Airlines territory strongly in recent years, creating a bit of a turf battle at SeaTac.
This move solidifies Alaska Airlines as a major contender, expanding its reach for travel in the West and giving its loyal customers more options.
The merger, if approved by government regulators this fall, would make Alaska the fifth largest airline in the United States, bumping its competitor Jet Blue from that spot.
Alaska has worked hard on its finances and now has an investment-grade credit rating — a rarity in the industry — and $1.3 billion in cash in the bank.
CEO Brad Tilden said the airline felt it had done well and was looking for a way to grow, with the goal to be the premier airline on the West Coast.
Tilden, who was recently the featured speaker at the Tri-City Regional Chamber of Commerce’s monthly luncheon, acknowledged the importance of the Tri-City market.
Alaska is looking for additional growth opportunities here and Tilden gave nods to the Pacific National Northwest Laboratory, the wine industry and the strength of our regional economy.
While what impact the merger would have for us here remains to be seen, the deal gives Alaska a stronger foothold in coveted California markets.
Even with the airline’s accomplishments, as a smaller carrier Alaska struggled to gain slots at airports in San Francisco and Los Angeles, places where Virgin America has a stronger presence.
That should mean better connections and access for us down the road. And we can dream of direct flights from Pasco to those destinations which may be a bit closer to reality now.
Alaska Airlines has a strong record of on-time flights and loyal customers. Virgin America was the brain-child of investor Richard Branson, who wanted to create a hip airline with a luxury feel at a low cost in the U.S. The airline has its fans who enjoy its cool music and lighting, among other amenities, but that wasn’t enough to succeed and the company went up on the sale block.
Alaska competed fiercely with Jet Blue for Virgin America and came out victorious. Tilden says the move will expand the airline and not drive up prices because the two carriers have little overlap.
He said the two airlines will be stronger together than they were on their own. And that sounds like good news for us in the long-term.