SEATTLE and SAN FRANCISCO – Alaska Air Group, Inc. (NYSE: ALK), parent company of Alaska Airlines, and Virgin America, Inc. (NASDAQ: VA) today announced that their boards of directors have unanimously approved a definitive merger agreement, under which Alaska Air Group will acquire Virgin America for $57.00 per share in cash. Including existing Virgin America indebtedness and capitalized aircraft operating leases, the aggregate transaction value is approximately $4.0 billion. With an expanded West Coast presence, a larger customer base, and an enhanced platform for growth, Alaska Airlines will be positioned to provide more choices for customers, increase competition and deliver attractive returns to investors.
The combination expands Alaska Airlines’ existing footprint in California, bolsters its platform for growth and strengthens the company as a competitor to the four largest U.S. airlines. Combining Alaska Airlines’ well-established core markets in the Pacific Northwest and the state of Alaska with Virgin America’s strong foundation in California will make Alaska Airlines the go-to airline for the more than 175,000 daily fliers in and out of Golden State airports, including San Francisco and Los Angeles.
For Virgin America customers, service will expand in the thriving technology markets in Silicon Valley and Seattle. The combined airline will also offer more frequent connections to international airline partners departing Seattle, San Francisco and Los Angeles. In addition, this transaction will open up growth opportunities in important East Coast business markets by increasing Alaska Airlines’ access to slot-controlled airports like Ronald Reagan Washington National Airport and the two primary New York City-area airports, John F. Kennedy International Airport and LaGuardia Airport.
A Larger Network, More Choices and an Enhanced Mileage Plan
The transaction brings together two airlines that consistently earn customer admiration and the highest industry accolades:
Alaska Airlines has been ranked #1 among the nine largest carriers in the United States by The Wall Street Journal for overall operational performance for three years in a row, while Virgin America has placed #2 in the same study for the past two years.
Virgin America has been voted “Best Domestic Airline” in both Travel + Leisure’s Annual World’s Best Awards and Conde Nast Traveler’s Readers’ Choice Awards for the past eight consecutive years.
Alaska Airlines has been ranked “Highest in Customer Satisfaction Among Traditional Carriers” by J.D. Power for eight years running, and has been ranked #1 for on-time performance six years in a row by FlightStats.
Virgin America has been rated #1 for the past three years in the annual Airline Quality Rating report, an annual study of U.S. domestic airline performance based on public data submitted to the Department of Transportation and conducted by professors at Wichita State University and Embry-Riddle Aeronautical University.
Alaska Airlines has been named the most fuel-efficient airline by the International Council on Clean Technology for the last six years.
The combined airline will retain its safety-centric, employee-focused culture:
Alaska Airlines and Virgin America both have been named among America’s ‘best employers’ by Forbes, which annually ranks 500 U.S. companies based on responses to a survey of American workers.
Both Alaska Airlines and Virgin America are listed on the International Air Transport Association’s Operational Safety Audit (IOSA) registry, the globally recognized benchmark for the airline industry. Alaska Airlines has been on the registry for 10 years and Virgin America has qualified for six years.
Alaska Airlines expects that Virgin America’s Pilots, Inflight Teammates, Guest Services Teammates and maintenance technicians will be protected in the combination.
Together, the combined airline will have:
1,200 daily departures, with hubs in Seattle, San Francisco, Los Angeles, Anchorage, Alaska, and Portland, Oregon.
Approximately 280 aircraft, which include regional planes, with an average age of 8.5 years.
Virgin America’s fleet of 60 Airbus A319 and A320 aircraft boast three classes of service, in-flight WiFi and power outlets on every flight, as well as personal, touch-screen seatback entertainment.
Following closing, Alaska Airlines will welcome Virgin America Elevate loyalty program members into its Mileage Plan, ranked #1 by U.S. News and World Report. With Alaska Airlines Mileage Plan, members are able to redeem award miles for travel to more than 900 destinations worldwide, rivaling global alliances. Until the transaction closes, both loyalty programs will remain distinct – with no short-term impact on members. Upon closing, the programs will be merged. Alaska Airlines is committed to ensuring that loyalty members of both airlines maintain the same high-value rewards they’ve come to enjoy in both programs – with access to an even larger network.
Read more on: flyingbettertogether.com
Source: Alaska Airlines