Alaska Air Confident DOJ Will Clear Merger With Virgin America Despite Delay
Alaska Airlines CEO Brad Tilden said he remains confident that a proposed takeover of rival Virgin America will happen. But he acknowledged to Wall Street analysts Thursday that he had been hoping the $2.6 billion deal would have closed “a couple of weeks ago.”
The tie-up has been delayed by anti-trust review by the U.S. Justice Department. Tilden declined to specify what aspects of the merger his company is negotiating with the DOJ.
“We continue to be very confident that the deal will get done, and get done in a way that benefits all of stakeholders -- most importantly our customers,” Tilden said.
Alaska Air management said it is ready to close the deal as soon as the government gives the green light. Seattle-based Alaska Airlines announced its planned takeover of San Francisco-based Virgin America back in April.
If the merger wins approval, it would create the nation’s fifth-largest airline. The combined airline would take the Alaska Airlines name and be run from the existing headquarters near SeaTac Airport.
The current route maps of the two carriers overlap relatively little, but the merger would make Alaska the dominant airline on the West Coast. The antitrust division of the Justice Department has forced the companies involved in past airline mergers to divest some assets in order to preserve competition.
Last month, a San Francisco-based law firm filed a private lawsuit challenging this merger as harmful to consumers.
Tilden defended the deal in the earnings call. “This is a pro-consumer merger of two smaller airlines that will bring new low-fare competition, industry leading service and innovative product offerings for the customers we serve,” he said.
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