Much has been written about why JetBlue is the perfect suitor for Virgin America, but The Motley Fool shares three reasons why they feel that an Alaska/Virgin America merger would be a solid paring as well. Especially relevant given today’s news that Alaska has supposedly outbid JetBlue with a deal announcement coming as early as Monday.
Fleet operational planning – Yes, Virgin has 50 A320s and 10 A319s, but it’s a homogeneous fleet of only two models, similar to Alaska’s focus on one model – the B737. As Virgin America would likely operate separately from Alaska, the fleet commonality isn’t an actual issue and there would still be only a handful of plane types to help minimize costs.
West Coast capacity outside of Seattle – Alaska would benefit from having additional capacity outside of Seattle where it continues to battle with Delta. As Alaska looks to expand eastward, Virgin’s coast-t0-coast flying is quite attractive.
Clean balance sheet -Virgin’s lack of balance sheet debt and the expiration of 26 leases between 2019-2022 give Alaska “an immense amount of flexibility in optimizing Virgin’s fleet economics.”
Check out their full article here.