How Will Alaska Air’s Market Share Change Post The Virgin America Deal?
Alaska Air, which along with its regional partner airlines serves more than 100 cities in Alaska, the Lower 48, Hawaii, Canada, Mexico, and Costa Rica, plans to acquire Virgin America in an all cash deal of $2.6 billion. Virgin America is a low-cost airline based in California, providing premium services on routes across the United States and Mexico, with primary focus on Los Angeles and San Francisco and a smaller presence in Dallas Love Field. Hence, Alaska Air’s primary objective to acquire Virgin America is to expand its footprint on the West Coast through access to the California market, while integrating Virgin America’s Dallas services with its existing operations. Thus, this merger will create a sizeable low-fare airline, which will provide a premium product and quality services to its passengers, while challenging the market share of large network carriers on the West Coast.
Below, we estimate the market share of the major US Airlines in 2016, based on their system capacity (measured by Available Seats Miles). We also notice that post the Virgin America deal, Alaska Air will hold more than 6.5% of the total domestic airline market (in terms of the capacity). While this may not impact the legacy carriers such as American Airlines, United Continental, and Delta Air Lines in the short term, it could lead to stiff competition for these airlines in the long term.
- Should You Pick Alaska Air Stock At $37 After Q4 Beat?
- Will Alaska Air Stock Rebound To Its Pre-Inflation Shock Highs of $70?
- What’s Next For Alaska Air Stock After A 24% Fall This Year And A Downbeat Q3?
- Which Is A Better Pick – Alaska Air Or UAL Stock?
- What’s In The Cards For Alaska Air’s Q2?
- Should You Buy Or Avoid Alaska Air Stock At $52?
Have more questions about Alaska Air (NYSE:ALK)? See the following links:
- Will Alaska Air-Virgin America Face Antitrust Issues?
- How Will The Virgin America Merger Impact Alaska Air’s Cost Of Capital?
- Why Is Alaska Air Acquiring Virgin America?
- How Will Alaska Air Benefit From The Virgin America Deal Operationally?
- How Will The Expected Return On The Alaska Air-Virgin America Merger Compare With The Previous Deals In The Sector?
- 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
View Interactive Institutional Research (Powered by Trefis):
Global Large Cap | U.S. Mid & Small Cap | European Large & Mid Cap