Alaska Airlines becomes 5th largest U.S. airline

Alaska Airlines closed acquisition to buy Virgin America, the group announced on Wednesday.

The merger of Alaska and Virgin would combine the nation’s sixth- and ninth-largest airlines, respectively, to create the fifth-largest U.S. carrier; it makes Alaska the biggest carrier on the West Coast.

What led up to the merger

Seattle-based Alaska Airlines announced its $2.6 billion deal in April after the merger agreement was signed by Virgin shareholders, reigniting the debate over airline consolidation. It gives Seattle-based Alaska a foothold in key airports in New York and Washington D.C., increasing the airline's appeal to business travelers.

The Department of Justice cleared Alaska's acquisition last week, but it announced Alaska would be required to significantly reduce the scope of its codeshare agreement with American Airline – the world's largest airline – in order for Alaska to complete the deal.

>> Related: Justice Department clears Alaska Air group's acquisition of Virgin America

The department said that these modifications will ensure that Alaska will have the incentive to vigorously compete with American as Virgin does today.

What airlines call the appeal of the merger

In its news release on Wednesday, Alaska wrote the merger brings together two of the country's favorite airlines into a unified force that will provide an attractive alternative to the "Big 4" airlines that currently control 84 percent of the domestic market.

Alaska said the deal will add Virgin's 200 daily departures to its existing 1,000 daily flights. The airline currently serves 112 destinations in the U.S., Canada and Mexico.

Virgin quickly won over passengers with its new jets, friendly crews, trendy mood lighting, extensive
seatback entertainment systems and meals on demand. All of that could go away if Alaska
chooses to fly a uniform fleet, a decision company executives say they were still debating in the spring.

No decisions regarding the Virgin America brand have been made as of Wednesday. Virgin America will continue to fly under its brand with no immediate changes to the onboard product or experience.

>> Related: Here's what's changing in Alaska Airlines' new look

Alaska fliers are just as loyal, loving the airline's compassion. Like other carriers, it charges for bag fees but was the first to add a service guarantee: if a bag doesn't make it to the claim area within 20 minutes, fliers get $25 off a future trip or 2,500 bonus miles.

Here's what the airline highlighted for passengers: 

  • An expanded route network with nearly 1,200 daily flights to 118 destinations across the United States, Mexico, Canada, Costa Rica and Cuba
  • More nonstop destinations served from the West Coast than any airline
  • A global network of partner airlines that, together with Alaska, fly to more than 800 destinations worldwide
  • New daily flights to Orlando, Florida; Minneapolis; and Orange County, California from its San Francisco hub starting summer 2017 – service will be available for sale Dec. 21.

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  • Starting Dec. 19, Virgin America Elevate members and Alaska Airlines Mileage Plan members can earn rewards on each other's flights; elite members will receive priority check-in and priority boarding on each other's flights
  • Starting Dec. 19, customers can purchase Virgin America tickets at alaskaair.com
  • A fuel efficient fleet of 286 aircraft with an average age of 8.1 years, the youngest of the top five U.S. airlines
  • Hubs in Seattle, Portland, Anchorage, San Francisco and Los Angeles – the most West Coast hubs of any airline

The combined company will be led by Alaska Air Group CEO Tilden. Ben Minicucci will serve as chief executive officer of Virgin America in addition to his role as chief operating officer and president of Alaska Airlines.

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