MYNORTHWEST NEWS

Alaska Air buying Virgin America

Apr 4, 2016, 6:29 AM | Updated: 6:35 am

Alaska Air will pay $57 in cash per Virgin share in its acquisition of its rival airline. (AP)...

Alaska Air will pay $57 in cash per Virgin share in its acquisition of its rival airline. (AP)

(AP)

Seattle-based Alaska Airlines is buying rival Virgin America in a deal worth more than $2 billion.

The goal, according to the company, is to create “west coast premier airline.”

Alaska Air will pay $57 in cash per Virgin share. That’s a 47 percent premium to its Friday closing price of $38.90.

Related: Boeing cutting 4K jobs, some in Washington state

The companies put the transaction’s value at about $4 billion, including debt and capitalized aircraft operating leases.

Alaska Air said Monday that the deal will expand its route network to include 1,200 daily departures. The airline is currently the sixth-largest U.S. carrier by traffic and serves 90 destinations in the U.S., Canada and Mexico. This deal gives them a bigger presence in San Francisco and Los Angeles, two coveted gates at Dallas Love Field, and more transcontinental service.

The combined business will be based in Seattle.

The deal marks a shift in the size of consolidations within the airline industry. For more than a decade consolidation swept through the major players, reducing the largest nine carriers in 2005 to four airlines by the end of 2013. The Alaska Air buyout of Virgin America indicates that consolidation has shifted to smaller players.

Virgin America got off the ground with support from minority owner Richard Branson and began flying in 2007. It went public in 2014 and while it has experienced growth in Dallas and added new service to Hawaii and Denver, the airline was having trouble getting enough takeoff and landing slots at busy New York airports. Its limited size and schedule made it difficult for the company to compete with bigger carriers for lucrative business travelers.

Both companies’ boards have approved the transaction, which is expected to close no later than Jan. 2, 2017. It still needs approval from Virgin America shareholders.

Virgin America’s stock jumped more than 33 percent in premarket trading.

Please follow our Community Guidelines

MyNorthwest News

power outage peninsula fire...

KIRO 7 News Staff

Power restored to 22K as Peninsula Light Company reports ‘Majority Territory Outage’ due to fire

Almost 23,000 Peninsula Light Company customers were without power on Sunday due to a fire response.

8 minutes ago

yakima...

KIRO 7 News Staff

Yakima man sentenced for murder of Yakama Nation man

Antonio Montellano, 44, was sentenced to more than 25 years in prison for the murder of a Yakama Nation man in January 2025.

28 minutes ago

e-bike...

Tim Hohl

Mary Bridge Children’s Hospital on pace to double e-bike injuries among kids this year

Mary Bridge Children's Hospital said it's on pace to more than double last year's number of children treated for e-bike and e-scooter trauma injuries.

29 minutes ago

shooting seattle center...

Frank Sumrall

3 dead, 4 injured in Seattle Center shooting during Bite of Seattle event

Three people were killed and another four were injured in a shooting at Seattle Center Sunday evening, SPD confirmed.

11 hours ago

The Modrite Fire, in northeast Washington state, has grown to more than 9,000 acres. (Photo Courtes...

Tom Brock

Washington state wildfires growing in size, forcing evacuations

Dry conditions across the state have prompted Red Flag Watches and Warnings, as a series of wildfires continues to grow across Washington.

17 hours ago

A Kent Police Department vehicle (Photo courtesy of Kent Police Department)...

Tom Brock

Dispute at a family graduation celebration ends with deadly shooting

One man is dead, and another is in police custody after a family celebration in Kent ended with a shooting. Police arrested a 40-year-old suspect at a family graduation celebration after a 41-year-old man was shot multiple times. It happened at a home in the 900 block of E. Cherry Hill St., a half mile […]

18 hours ago

Alaska Air buying Virgin America