On Wednesday, Alaska Air Group, Inc. (NYSE:ALK) completed the $2.6 billion deal with Virgin America Inc. (NASDAQ:VA). After the acquisition, Alaska became the fifth-largest airline by traffic, which is ahead of JetBlue.
Alaska won the bid in April after its rival JetBlue Airways Corp. (NASDAQ:JBLU) quitted because of the high price. The Justice Department approved the acquisition just eight days ago. “It took longer to get the deal through the Justice Department than we expected,” said Brad Tilden, the chief executive officer of Alaska Air. “But we respect the job they do.” To finish the deal, the Alaska raised around $2 billion to fund the deal.
“Alaska Airlines and Virgin America are different airlines, but we believe different works – and we’re confident fliers will agree,” Brad said in the statement. “The Two airlines may look different, but our core customer and employee focus is very much the same.”
In the statement, Alaska Air disclosed that it would go on operating the fleet of Virgin America without changing its name immediately, and it will use Virgin America’s original onboard product and experience for now.
Brad Tilden will be the leader of the new combined operation, and Ben Minicucci, the chief operating officer of Alaska Air, will be the CEO of the Virgin America unit. In addition, Peter Hunt, which is previously the senior vice president and chief financial officer of Virgin America, will be the president of the Virgin America subsidiary,
After the deal, the combined company will expand route network to 1,200 daily flights to 118 destinations in several countries, including the United States, Canada, Costa Rica, Cuba, and, Mexico.
Brad said that many major decisions, which including whether to keep the Airbus A320 planes of Virgin American, since Alaska has an all-Boeing 737 fleet, are still not made.