It's not a big surprise that regulators are signing off on this deal. What will be interesting, however, is to see how many concessions Alaska had to make in order to get it done. How big will the combined airline now be in Los Angeles and San Francisco?
Alaska Air Group Inc is likely to get the U.S. Justice Department’s approval for its $2.6 billion acquisition of Virgin America Inc soon, a person close to the deal told Reuters.
Separately, a government official said an announcement of the approval was scheduled for Tuesday, but neither source said what conditions would be put on the deal.
Experts had previously said they expected Alaska to agree to give up its code-sharing agreement with Delta Air Lines Inc.
“The Alaska-Delta code share will go away,” said travel industry analyst Henry Harteveldt, citing conversations with sources at one of the airlines. Existing reservations that rely on the code-sharing would be taken into consideration for the timing of the divestiture, he said.
The Justice Department also focused on Los Angeles International Airport, where both Alaska and American Airlines Group Inc have a large presence, but it was unclear if the Alaska-American code-share would be affected, said Harteveldt, founder of travel consultancy Atmosphere Research Group.
The Wall Street Journal had initially reported that the Justice Department was poised to approve the deal.
Seattle-based Alaska Air has said the merger will create the largest airline on the U.S. West Coast and help it compete with bigger U.S. airlines.
The deal, which was announced in April, would also make Alaska the fifth-largest U.S. carrier. The top four control more than 80 percent of the U.S. travel market after a decade of mergers shrank the industry.
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Photo credit: Alaska Airlines is on the cusp of closing its deal with Virgin America, sources said. Alaska Airlines