How Will Alaska Air Benefit From The Virgin America Deal Operationally?
Alaska Air Group’s (NYSE:ALK) plans to acquire Virgin America will bring together the two airlines that are known for providing exceptional in-flight experience and operational consistency, and have been recognized with a number of industry accolades. Apart from generating revenue and cost synergies of roughly $225 million over time, the deal will enable Alaska Air to grow its passenger base by over 20% to 39 million users. Further, Virgin America’s fleet of 60 Airbus A319 and A320 aircraft with a host of in-flight services will expand Alaska Air’s fleet to 280 aircraft, with an average age of 8.5 years. This will complement Alaska Air’s existing fleet and enable the airline to consistently provide high quality services to its passengers.
Additionally, the deal will allow Alaska Air to operate 1,200 daily departures, with hubs in Seattle, San Francisco, Los Angeles, Anchorage, Alaska, and Portland, Oregon. Hence, we figure that the Alaska Air-Virgin America merger will create a low-fare carrier offering a premium product which will be equipped to gain a larger share of the US airline industry.
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Have more questions about Alaska Air (NYSE:ALK)? See the following links:
- Why Is Alaska Air Acquiring Virgin America?
- How Will The Virgin America Deal Alter Alaska Air’s Capital Structure?
- Has Alaska Air Paid A Fair Price For Acquiring Virgin America?
- Alaska Air’s Earnings Rise On The Back Of Rapid Capacity Growth And Lower Fuel Costs
- How Has Alaska Air Used Its Increased Cash Flows From Fuel Cost Savings?
- How Will Alaska Air’s EBITDA Be Impacted, If Crude Oil Prices Rebound To $100 Per Barrel By 2018?
- Capacity Expansions And Fuel Cost Savings Boost Alaska Air’s 2015 Results
- How Do Alaska Air’s Operational Statistics Compare With Its Peers?
- How Does Alaska Air’s Market Share (By Capacity) Compare With Its Peers?
- How Does Alaska Air’s Operating Margins Compare With Its Peers?
- How Much Will Alaska Air’s Revenue And EBITDA Grow In The Next 3 Years?
- How Has The Oil Slump Helped Alaska Air’s Operating Margins?
- How Has Alaska Air’s Revenue And EBITDA Composition Changed Over the Last Five Years?
- How Much Has Alaska Air’s Revenue & EBITDA Grown In The Last 5 Years?
- What Is Alaska Air’s Fundamental Value Based On Expected 2015 Results?
- What Constitutes Alaska Air’s Revenue And EBITDA?
Notes:
1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Alaska Air Group
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