Alaska Airlines and JetBlue interested in buying Virgin America

The low cost airline has put itself up for sale and offers by the two airlines are due by the end of this week. A preferred buyer could appear really soon, but a final deal will take longer to complete.

Image Copyright: Virgin America

Virgin America, a subsidiary of Richard Branson’s Virgin Group, has been operating since 2007, but has been profitable since the last two years: it reported earnings of $201.5 million in 2015. Its homebase is at San Francisco International, mostly operating flights between the west and east coast of the US.
An acquisition by JetBlue would mean that the airline would expand its network on the west coast, particularly in Los Angeles and San Francisco, eliminating a competitor on lucrative trans-American routes and complementing their hub at New York’s JFK airport.

Image copyright: JetBlue

If the airline merged with Alaska Airlines, it would mean that Alaska could be able to expand their network in Mexico and eliminate a competitor on the West Coast.
Image copyright: Alaska Airlines

The analyst Helene Becker told Bloomberg that a merger with “JetBlue would make the most sense from an aircraft, network and product offering perspective”. An example is that both JetBlue and Virgin America only operate Airbus aircraft part of the A320 family, which means JetBlue wouldn’t need to train new crews to pilot the new planes. Alaska Airlines though, which only operates planes from the 737 family, would be forced to train new pilots for the new planes.
Bloomberg also reported that an undisclosed Asian customer might be interested in purchasing Virgin America, though it would mean it had to partner with a US bidder under foreign ownership rules governing US airlines.


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