Alaska Air Group Acquires Virgin America, Becomes 5th Largest US Airline

Alaska Air Group Inc. has completed its acquisition of Virgin America. The merger of the two U.S. airlines, which was first announced in April and voted on by Virgin America shareholders in July, will create the foundation for the nation’s fifth-largest airline.

"Alaska Airlines and Virgin America are different airlines, but we believe different works – and we're confident fliers will agree," said Brad Tilden, CEO of Alaska Air Group. "Together, we'll offer more flights, with low fares, more rewards and more for customers to love, as we continue to offer a distinctive travel experience. The two airlines may look different, but our core customer and employee focus is very much the same."

Execs are also hoping that the joining of two extremely popular carriers will lure customers away from “The Big 4,” which currently control 84 per cent of all U.S. flights.

To celebrate the merger of the two beloved West Coast airlines, the airline is unveiling a co-branded Boeing 737 featuring a livery painted in shimmering red, purple and blue. The aircraft, which features the slogan "More to love," will fly throughout Alaska Airlines' route network starting today.

"Culture has been a real challenge in many mergers, so we're working to do things differently," said Ben Minicucci, Alaska's president and COO who will also become CEO of Virgin America today. "We are being very thoughtful about culture and are working to create an environment that reflects who we are and where we've been, that also enables us to work together, be bold, and succeed in a rapidly evolving industry."

Alaska Air Group now offers nearly 1,200 daily flights in its inventory, serving more than 118 destinations, and accounting for some $7 billion in annual revenue. For Virgin America fliers, this means they now have access to six times as many flights as they did before the merger.

The airline also offers the most seats along the U.S. West Coast. More than 20 per cent of the flights, 289 to be exact, fly to and from California. In totally the airline serves 52 California destinations, including 113 daily nonstop flights to the three Bay Area airports, San Francisco, Oakland, and San Jose, as well as 105 daily nonstop to the four Los Angeles area airports, Los Angeles International Airport, Burbank Bob Hope Airport, John Wayne Airport in Orange County, and the Ontario California Airport.

"This partnership is positive for California air travel consumers and demonstrates an investment in our state," said Gavin Newsom, Lieutenant Governor of California. "Both airlines boast a strong history, and we look forward to seeing their innovative spirit magnified with their global international network of partner airlines."

The airline is also looking to expand its presence at key East Coast airports, including Ronald Reagan Washington National Airport and the three primary New York City-area airports: John F. Kennedy International Airport, LaGuardia Airport and Newark Liberty International Airport.

The airline has announced it is launching new flights to Orlando (daily), Minneapolis (twice daily) and Orange County, California (four times daily) in summer 2017. All flights will originate from the airline’s San Francisco hub, and a full schedule will be announced on Dec. 21.

Alaska Mileage Plan

Starting Monday, Dec. 19, the two mileage plans will become fully complementary. Mileage Plan members will be able to earn miles on Virgin America flights, and Virgin America Elevate members can earn points on Alaska Airlines flights. Elite members will be recognized by both programs, and will receive priority check-in and boarding on all flights.

"Beginning Monday, Virgin America Elevate members and Alaska Airlines Mileage Plan members will enjoy reciprocal rewards earning across each other's networks," said Tilden. "We plan to make this the most customer-friendly merger ever, and we will have much more to announce over the coming weeks."

On Jan. 9, Virgin America Elevate members will be asked to activate new Mileage Plan accounts.

Also starting Dec.19, tickets for Virgin America flights will be available at www.alaskaair.com, although tickets will also be available at www.virginamerica.com.

The Future of Virgin America

Alaska has made no decisions yet as to what to do with the Virgin America Brand. For the immediate future, the airline will continue to operate under its own name. In the meantime, the airline will conduct customer research among Virgin America fliers to see what they most value about the airline.

"We appreciate that there is great interest in the future of the Virgin America brand among customers and employees alike," said Tilden. "This is a big decision and one that deserves months of thoughtful and thorough analysis. We plan to make a decision about the Virgin America brand early next year."

Leadership

Alaska Air Group CEO Tilden will lead the combined company, while Ben Minicucci will serve as chief executive officer of Virgin America as well as chief operating officer and president of Alaska Airlines. Peter Hunt will assume the role of president of Virgin America. Minicucci and Hunt’s positions will remain in effect until the airlines obtain a single operating certificate from the FAA, which is expected to occur in early 2018. (Regional sister carrier Horizon Air will continue to maintain its own, separate operating certificate).

To celebrate the airlines' nearly 1,200 daily flights, the company is giving away 1,200 round-trip flights at http://twogether.differentworks.com.

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