The Alaska Air Group officially closed on its deal to acquire Virgin America in late 2016 and has now commenced the integration process. Whilst the new owner has not confirmed the exact operational arrangements of the acquisition, it is likely that flight routes and airport slots will be amalgamated into Alaska Airlines’ mainline operations. Alaska Air Group had initially planned to retire the Virgin brand completely. However, this rebranding will reportedly be delayed until thorough market research is conducted to ensure a smooth transition and a positive consumer reaction.
Reports of the buyout first emerged in 2016, with the Alaska Air Group expressing its interest in a merger with Virgin America. In July 2016, the United States Department of Justice granted approval for the acquisition of Virgin America for USD $2.6 Billion, plus USD $1.4 billion in assumed debt. In addition to a number of regulatory requirements, code-sharing limitations were also implemented to satisfy fair competition legislation. Most notably, due to American Airlines and Alaska Airlines current market share, both carriers are prohibited from code sharing with one another on over 50 routes.
Alaska Airlines has already transitioned Virgin America’s flights codes to its own. Alaska Airlines’ has reportedly announced that Virgin America’s entire fleet may be discarded, to allow for the continuation of a single model fleet consisting of Boeing 737 aircraft.