Alaska Air wins U.S.
antitrust approval for Virgin deal with conditions
Send a link to a friend
[December 07, 2016]
By Diane Bartz
WASHINGTON
(Reuters) - Alaska Air Group Inc has won U.S. antitrust approval for its
$2.6 billion acquisition of Virgin America Inc on condition that it
scale back its code-sharing with American Airlines Group Inc <AAL.O>,
the Justice Department said on Tuesday.
The merged company would be the fifth largest U.S. carrier after
American Airlines, Delta, United Airlines Inc and Southwest Airlines Co.
Alaska Air said in a statement that it was pleased with the approval and
plans to close the purchase "in the very near future."
Under the settlement with the Justice Department, Alaska and American
would be banned from code-sharing on routes where Virgin and American
now compete, the department said.
Code-sharing is also barred on routes that Alaska Air might start in the
future if American also flies that route.
![](http://archives.lincolndailynews.com/2016/Dec/07/images/ads/current/graue_sda_2016.png)
The settlement is a good one for Alaska since it does not require the
company to dispose of any gates, slots or other hard assets, said
airline analyst Robert Mann of R.W. Mann & Company, Inc. "It's not a
material impact on the economics of the deal," said Mann.
American put its code on nearly 163,000 Alaska Airlines scheduled
flights in 2016, and Delta put its code on more than 78,000, according
to data from air travel intelligence company OAG. Alaska Airlines places
its code on nearly 588,000 of those carriers' scheduled flights as well.
Alaska, which paid a premium of about 86 percent for Virgin, pursued the
deal to better compete against Delta Air Lines Inc and American, the
company has said.
Virgin is the offshoot of billionaire Richard Branson's London-based
Virgin Group, which had become famous for its mood lighting and
media-rich entertainment on flights.
[to top of second column] |
![](../images/120716pics/busine51.jpg)
An Alaska Airlines plane is shown on final approach to land in San
Diego, California April 4, 2016. REUTERS/Mike Blake
![](http://archives.lincolndailynews.com/2016/Dec/07/images/ads/current/brickey_lda_061314.png)
The big four airlines control more than 80 percent of the U.S. travel
market, and the Justice Department is hoping that a stronger Alaska Air
will compete with the giants.
"Today’s settlement ensures that Alaska has the incentive to take the
fight to American and use Virgin’s assets to grow its network in ways
that benefit competition and consumers," Renata Hesse, the acting head
of the Justice Department’s Antitrust Division, said in a statement.
Alaska in April announced its $2.6 billion cash deal for Virgin America,
which will make it the top carrier on the U.S. West Coast.
(Reporting by Diane Bartz, Alana Wise and Jeffrey Dastin; Editing by
Jonathan Oatis and Diane Craft)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
![](http://archives.lincolndailynews.com/2016/Dec/07/images/ads/current/johnsonlumber_lda_CHRISTMAS_2016.png) |