The acquisition of Virgin America comes at a 40% premium, as the stock price soared on news of the $2.5B sales to Seattle based Alaska Airlines reports iHumanMeda.com.
“Our goal is to be the premier airline for people along the West Coast,” Alaska CEO Brad Tilden told investors on a call Monday morning.
Alaska said the deal will add Virgin’s 200 daily departures to its existing 1,000 daily flights. The airline currently serves 112 destinations in the U.S., Canada and Mexico. Key airlines markets like San Francisco, New York, Los Angeles, Las Vegas, Chicago, Boston, San Diego, Denver and Washington D.C. are all possible on Alaska Airlines.
The deal is anticipated to add to adjusted earnings per share in the first full year, excluding integration costs, and boost annual revenues 27 percent to more than $7 billion. Alaska Air said that it expects about $300 million to $350 million in one-time integration costs.