It's official: Virgin America to merge with Alaska Airlines

[ComplexHiAv8r]

Heard DL is buying them and XJT this morning in the JS. Must be true.

 

[ASpilot2be]

I heard Penair is interested. We need more planes and pilots

 

[jskibo]

Nah, it's Seaport, they need the cash and flow

 

[scooter2525]

Family airlines.

 

[Maximilian_Jenius]

Heard DL is buying them and XJT this morning in the JS. Must be true.

United purchasing ERJ XJT and making it a WO, and DL purchasing the ASA side, would be... awesome!

 

[Ecl!pse]

Pilot turned Wall Street analyst eh?

Virgin America started flying Aug 2007. Just months later we were hit with the worst recession since the Great Depression. So of the 8 full years of existence, years 2008-2012 stung a lot. Less than 12 months after starting up, oil shot up to $150 /barrel. No other airline start up faced such dire circumstances. jetBlue started in a different environment, and directly gained benefit after 9/11's legacy cutting. They shrunk down and jetBlue grew. The airline environment before 2008 was a lot different than it was after 2008's recession and the ensuing mergers that gave just 3 legacy airlines plus SWA. The bottom line is the only other startups at the time, like Skybus, failed relatively quickly.

SAVE had a huge loss in stock value from the 80s down to the 30s, and their CEO was put on the chopping block. There's now someone new at the helm. NK and F9 are also heading down a similar merger/buyout path.

Agree completely that nothing happens in a vacuum, and timing is just as critical as the "model" itself. I was more just commenting that it's not at easy as most people like to claim to "grow" into scale -- if you can't generate profits in the environment you operate in, growing will be a challenge - which has been a hurdle VA has faced since inception, JBLU faced in the mid-2000's and again ~ 2013, and that other carriers like LUV and SAVE have been challenged with in recent years (albeit, they are still profitable, just less profitable than expected). At some point carriers can't place sole blame on the market environment for lagging in profitability - the strategy/model itself has to be scrutinized.

The scale though that the big 3 enjoy come via failures and then mergers right? Of course at some point they had to grow, but ultimately the largest % of their growth came through merging. SWA not included...They've grown and succeeded picking up smaller carriers along the way.

Correct - a lot of that growth has come from M&A, especially post-deregulation. To @Cherokee_Cruiser point though, I do think there is something to be said about legacies building significant foundations in the regulated era - when the competitive environment was very, very different (think of all the legacy hubs built before 1979).

 

[Mike Wise]

guys you're all wrong, its great lakes.

 

[JDean3204]

Nah, it's Seaport, they need the cash and flow

I just spit my drink on my laptop, thx for that

 

[skyw82]

If I had to guess I would say it most likely will be one of the middle-east three. They will buy the max allowable amount or they will buy part of the amount either way I expect them to be part of the brand just like Darwin Airlines.

 

[CRJDriver]

Bids from JetBlue and Alaska...

http://www.bloomberg.com/news/artic...d-to-attract-jetblue-alaska-air-takeover-bids

 

[jskibo]

Oooo Virgin Alaska. Good name. Better than Blue Alaska

 

[Beefy McGee]

How about Jet Virgins?

 

[CFIscare]

How about Blue Balls for a Virgin-JetBlue merger?

 

[alaskadrifter]

This doesn't seem like Alaska's style.

 

[ShortField]

This doesn't seem like Alaska's style.

Really against their typical "organic growth."

 

[ASpilot2be]

This doesn't seem like Alaska's style.

I don't think the Alaska style we know really exists anymore.

 

[ChasenSFO]

Alaska would, my bet is anyway, just be knocking out a West Coast competitor and gaining slots, gates, and routes. I highly doubt the planes or any of the Virgin style would stick.

jetBlue, doesn't surprise me at all. I love Virgin America, really sucks to see a few people trying to get rich quick and abandon the airline. But I doubt any merger/total buy out would be approved right now.

 

[ShortField]

I don't think the Alaska style we know really exists anymore.

This is what I've been thinking more and more as well.

 

[purpel]

Lmfao I'm sure it's an April fools joke.

When that dude says "We just had to unfeather it" and releases the birds I just about died.

 

[juxtapilot]

I love the sketches!!