Alaska buying Virgin America? Yes, it’s being widely reported that Alaska Airlines is closing in on a deal to do just that. I’ve long thought that there was some more room for consolidation at the smaller end of the airline industry, but I will admit that a marriage of these two airlines was not high on my wish list. JetBlue was the other reported suitor once Virgin America put itself up for sale, and frankly, I thought JetBlue would be the buyer. They still could be.
JetBlue almost started as Virgin America, but that’s another blog post. Fleet mix, onboard product, and culture seemed to make make Virgin a more ideal fit for JetBlue. Alaska is a fine airline, but “edgy” is not an adjective that comes to mind when I think of them.
For sure, expanded operations in San Francisco and a handful of transcontinental routes would add something to Alaska’s portfolio. However, these don’t strike me as reasons to drop a rumored purchase price of $2 billion on an airline that just seems incompatible. I’m sure a squadron of MBAs have a few ideas on making it work, but color me skeptical at this point. Leaking details of the deal over the weekend could be a way to loosen up someone else’s wallet……like JetBlue.
-MJ, April 2, 2016