Alaska buys Virgin: What it means for Sea-Tac travelers

Good news for passengers on Seattle’s Alaska Airlines which is slated to take over Virgin America’s airline operation after a $2.6 billion deal. Good because potential destinations will increase a little bit, but there could also be a slight downside for airline travelers.

While news of the deal was announced Monday, details of how Alaska will take over Virgin have yet to be made public. KIRO Radio travel expert Steve Danishek broke it down for Seattle’s Morning News and what it could mean for Seattle travelers.

Travelers could see airfares going up a little bit as a result of the buyout, but fortunately not anytime soon.

“It might eventually. Nothing right away,” Danishek said.

“Once Alaska takes over Virgin and sucks up their north-south traffic, they will be in a position to use their dominance to raise fares,” he said, noting that he personally speculates fares won’t rise dramatically.

But competition is still working in favor of customers. Alaska is still up against Delta Air Lines, and a couple of other smaller companies. That should help keep prices competitive.

“This (purchases) is of course an attempt to fend off Delta from getting too far ahead of them in the Seattle market,” Danishek said.

Danishek also notes that airfares are expected to rise as the economy continues to do well. Another consideration is that prices are currently rather low, Danishek said. So in a way, they can only go up.

Frequent fliers

Airfares aren’t the only changes that Seattle-area passengers can expect. Danishek also points out Alaska Air’s frequent fliers will win with access to Virgin America’s partners. These partners include: Emirates; Virgin Australia; Hawaiian Airlines; Singapore Airlines; and Virgin Atlantic. Virgin Australia and Singapore are notable, Danishek said, as they are primary carriers to their destinations.

Boeing benefit?

Alaska is a supporter of fellow Seattle company Boeing. Virgin, however, uses leased Airbuses for its operation. Speculation is that with Alaska at the helm, Virgin’s airplanes could be converted to Boeing aircraft over time.

“Initially, they’ll run two separate airlines &#8212 at least for 18 months or two years. Almost all of the planes, about 55 or 60 of Virgin America’s Airbuses are on lease. Those leases will start to tail out in about three years and go out to about 2024,” Danishek said. “It is entirely possible that they can convert the fleet to all 737s.”

Alaska Arline recently purchased Virgin America for $2.6 billion. Founder Richard Branson will end up taking in more than $786 million in the deal. He naturally feels … “sad” according to his blog where he wrote that because he is not an American, he could not vote in the American-based company’s decision to sell. “There was sadly nothing I could do to stop it,” he wrote.