British billionaire Richard Branson recently sold his Virgin America shares to Alaska Airlines, making Alaska the fourth largest airline in the country with the addition. Branson’s original purpose in creating Virgin America was to create an airline Americans loved, and he succeeded. With the sales of the airline at $57 a share, plus Virgin America’s debt and aircraft operating leases, the overall price will come to about $4 billion.
The sale allows Alaskan Airlines to gain a better foothold in the western market in the US, with the increased capacity at San Francisco and Los Angeles. They want to increase their footprint and be better able to compete with the larger airlines in the US.
Their plan seems to be excellent as Virgin America has a loyal following, is fairly new and has the capacity for growth. So although Alaskan Airlines paid quite a bit for the Virgin America, it just may be the thing they need to push them into the legacy markets, as it allows them to compete with newer planes, staff and a refreshing attitude when it comes to flights.
As they get settled and the two airlines merge, they increase the number of flights they have each day, it’s likely that we’ll see and hear a lot more about Alaskan Air, and it will no longer be the airline you use solely for flights to the Pacific Northwest and Alaska. Not sure about their international capacity, but if they do, they are also perfectly positioned for flights to Eastern Europe as well.
With the number of passengers flying to more destinations, this purchase was definitely a wise decision for Alaskan. So now we just have to wait and see.
