Alaska Air Group today confirmed a $4 billion takeover of Virgin America.
The combined airline will have 1,200 daily departures, with hubs in Seattle, San Francisco, Los Angeles, Anchorage and Portland with a fleet of 280 aircraft.
The combination expands Seattle-based Alaska Airlines’ footprint in California, bolsters its platform for growth and strengthens the company as a competitor to the four largest US airlines.
The combined airline will offer more frequent connections to international airline partners departing from Seattle, San Francisco and Los Angeles.
Growth opportunities will be opened up on the US east coast by increasing Alaska Airlines’ access to slot-controlled airports like Ronald Reagan Washington National airport and JFK and LaGuardia Airport in New York.
For Virgin America passengers, service will expand in the technology markets in Silicon Valley and Seattle.
Virgin America’s fleet of 60 Airbus A319s and A320s aircraft operate in a three class configuration providing in-flight WiFi and power outlets, as well as personal, touch-screen seatback entertainment.
Alaska Air Group chairman and chief executive, Brad Tilden, said: “Our employees have worked hard to earn the deep loyalty of customers in the Pacific Northwest and Alaska, while the Virgin America team has done the same in California.
“Together we will continue to deliver what customers tell us they want: low fares, unmatched reliability and outstanding customer service.
“With our expanded network and strong presence in California, we’ll offer customers more attractive flight options for non-stop travel.
“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 America president and chief executive, David Cush, said: “Our mission has always been to create an airline that people love – and we accomplished that while changing the industry for the better.
“Joining forces with Alaska Airlines will ensure that our mission lives on, and that the stronger, combined company will continue to be a great place to work and an airline that focuses on an outstanding travel experience.”
The combined airline is projected to have annual revenues of more than $7 billion and expects to make $225 million a year in total net synergies at full integration.
One-off integration costs are expected to be between $300 million-350 million.
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