DOJ Approves Alaska Airlines Deal To Buy Virgin

The U.S. Department of Justice has approved Alaska Airlines’ purchase of Virgin America for $2.6 billion. 

The deal brings together two of the largest domestic air carriers in the United States under one company, carrying 39 million passengers on 1,200 daily departures. It still needs approval from the U.S. District Court but if it gets the go-ahead, Alaska will operate 6% of the nation’s domestic flights, behind only the four major American carriers—American, Southwest, Delta and United, according to the U.S. Department of Transportation.  

The agreement is the latest in a long line of airline mergers that has already put 80% of all domestic flights under control of the four major carriers.  

“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,”acting assistant attorney general Renata Hesse said in a statement. 

After a bidding war with JetBlue that drove up the price, Alaska agreed to buy Virgin in April. Executives said they were pleased with the deal and hope it will help expand Alaska’s presence on the West Coast, particularly in California.  

The approval from the DOJ came with a stipulation that Alaska trim down its code-sharing agreement that allows it to sell American Airlines tickets to its customers. Alaska had the rights to sell American tickets on about 250 routes, but will no longer be able to do so.  

There is still no word on whether Alaska will continue to operate Virgin flights under the old brand or merge it, or whether or how the airline will move toward fleet integration. Alaska flies Boeing 737s and Virgin’s fleet is made up of Airbuses. The group said in April those decisions won’t be made for a few years.