Another airline merger is in the works. Earlier in the week Alaska announced a buyout of Virgin America for $2.6 billion. This is not surprising as US carriers have been consolidating the past few years: Delta-Northwest (2008), Southwest-AirTran (2010), United-Continental (2012), and American-US Airways (2015). Post-merger, Alaska-Virgin will become the fifth largest airline in the US.
I personally have not flown on either airline, but I have accumulated miles with Alaska for future travel. I’m considering a plan to earn miles on Virgin America before the merger occurs so that the two accounts will merge into one larger account. I did the same prior to the American-US Airways merger and ended up with a large miles balance.
What’s in the works?
Alaska is promoting the acquisition as “Creating the Premier West Coast Airline.” Not only will Alaska’s west coast presence increase exponentially, especially in California, the merger will combine two of the leading airlines consistently ranked high in overall performance and overall customer satisfaction.
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With the airlines consolidating, the general consensus among airline and financial analysts is that competition will decrease, thus driving prices higher. In Alaska’s press release, they noted that the expansion in routes will create “new opportunities for growth and competition.” We’ll have to wait and see if that’s true or if the cost of flying a plane will increase as there will be fewer airlines competing for your dollar.
How Will This Affect Mileage Plan and Elevate members?
It’s pretty likely that Virgin’s Elevate frequent flyer miles will be incorporated into Alaska’s Mileage Plan program eventually, as US Airways folded into American. Alaska has noted that each program will run independently until the merger is complete.