Alaska Air Group and Virgin America receive clearance for merger from US DoJ
US Department of Justice completed (06-Dec-2016) its review and cleared Alaska Air Group's USD4 billion acquisition of Virgin America, as per the proposed settlement in its civil antitrust lawsuit. Alaska was not required to divest any assets as a condition of DoJ clearance, although the agency required Alaska to "significantly reduce the scope of its codeshare agreement" with American Airlines. To reduce Alaska's dependence on the codeshare and limit its incentives to cooperate with American, the proposed settlement prohibits the two carriers from codesharing on routes where Virgin and American currently compete and on routes where Alaska would otherwise be likely to launch new service in competition with American. The proposed settlement also requires Alaska to obtain DoJ approval before selling or leasing any of the gates or slots divested to Virgin and expressly prohibits Alaska from transferring any interest in the assets to American. The DoJ did not require changes to any other agreements between Alaska and American, including interline or reciprocal loyalty agreements, or any of Alaska's other airline partnerships. The carriers plans to close the transaction in the very near future, taking into account the lawsuit filed by private plaintiffs in US District Court in San Francisco. Alaska believes the plaintiffs' claims are without merit and plans to defend its acquisition of Virgin America accordingly. DoJ antitrust division acting assistant attorney general Renata Hesse stated: "Smaller airlines, such as Alaska and Virgin, provide a critical competitive check on the larger carriers. Although this merger offers hope that a strengthened Alaska can be an even stronger competitor than before, because of Alaska's extensive codeshare agreement with the world's largest airline, the merger threatened to blunt important competition and reduce choices for consumers." [more - original PR - Alaska Air Group I] [more - original PR - DoJ] [more - original PR - Alaska II] [more - original PR - Virgin]