Cleared for Take-Off: Alaska Airlines and Virgin America Merger Approved

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If you’ve been eagerly waiting for the government to approve the merger between Alaska Airlines and Virgin America, I have good news.

Today, the Department of Justice gave final approval for Alaska Airlines to acquire Virgin America.  The merger will make Alaska Airlines the 5th largest airline in the US (behind American Airlines, Delta, United Airlines, and Southwest).

But the decision isn’t without conditions.  Alaska Airlines will have to limit its partnership with American Airlines in order to keep competition in the US airline industry.

I’ll share what we know about the merger so far, and what it could mean for your miles and points!

Alaska Airlines – Virgin America Merger Approved

Link:   Alaska Airlines – Virgin America Merger

Link:   Alaska Airlines Press Release

Now that the Department of Justice has given the Alaska Airlines – Virgin America merger the go-ahead, we can expect to see the deal close very soon.  Maybe even before the end of 2016!

But there will be restrictions on how Alaska Airlines can code-share with American Airlines in the future.  Code-sharing means partner airlines market and sell the others’ flights with their own flight number, as if the flight was their own.

To preserve competition among US airlines, the Department of Justice set these conditions on the merger:

• Alaska Airlines must discontinue code-sharing with American Airlines on non-stop routes where Virgin America and American Airlines currently compete
• New routes where Alaska Airlines would have likely operated a code-share with American Airlines (in competition with Virgin America) won’t be allowed either

That said, other code-share routes between Alaska Airlines and American Airlines will likely stay in place.  And there was no mention of Alaska Airlines’ partnership with Delta as a condition of the merger approval.

What Does This Mean for You?

Link:   Should You Transfer Your Starwood Points to Virgin America or Alaska Airlines Now That They’re Merging?

Link:   Alaska Airlines – Virgin America Merger FAQs

1.   Short-Term

Until the deal closes and the airlines obtain a single operating certificate, Alaska Airlines and Virgin America will continue to operate as separate airlines.  And in the short-term, the Alaska Airlines and Virgin America frequent flyer programs will remain distinct as well.

So for the time being, you’ll be able to earn and use Alaska Airlines miles and Virgin America points the same way you do now.

However, the loyalty programs will eventually merge into one Alaska Airlines frequent flyer program.  Alaska Airlines says:

Loyalty points accrued in (Virgin America) Elevate® during the transition period will be transferred and honored.

The same is true of Alaska Airlines and Virgin America‘s co-branded credit cards.  For now, you can still apply for and earn Virgin America points with the Comenity Bank Virgin America Premium Signature Card and Virgin America Signature Card:

In the future, we look forward to welcoming Virgin America Visa Signature members onto the Alaska Airlines Visa Signature card.  Points accrued on Virgin America Visa Signature card during the transition period will be transferred and honored.

There’s no mention yet of a transfer ratio between Virgin America points and Alaska Airlines miles.

That said, it’s likely the Comenity Bank Virgin America Premium Signature Card and Virgin America Signature Card will be discontinued very soon.  So if you’ve been thinking about applying, you might want to do so in the near future.

Here’s my review of the Comenity Bank Virgin America cards.

2.   Long-Term

Once the airlines have merged, they’ll operate a much larger route network with over 1,200 daily flights.

It’s not yet clear if there will be major changes to Alaska Airlines’ frequent flyer program, including award flight prices and partner award prices.  Stay tuned!

I’m most interested in how Alaska Airlines will handle Virgin America’s current partnerships with banks and airlines.  For example, Virgin America is an American Express Membership Rewards, Citi ThankYou, and Starwood transfer partner.

However, Starwood points are the only flexible points that transfer to Alaska Airlines.  I’m hoping the merger makes it possible to transfer AMEX Membership Rewards and Citi ThankYou points to Alaska Airlines as well!

That would open up terrific award possibilities, like using Alaska Airlines miles to book award flights on American Airlines at an often cheaper rate.

I’ll let you know as soon as I hear more!

Bottom Line

The Department of Justice approved the Alaska Airlines – Virgin America merger today.  The deal should close before the end of the year.

But Alaska Airlines must reduce the number of code-share flights it operates with partner American Airlines on routes where Virgin America competes.  For most folks, this won’t have a huge impact.

For the time being, the airlines and frequent flyer programs will continue to run separately.  But after the deal closes, Virgin America flyers will have their points converted to Alaska Airlines miles at a yet-unknown ratio.

And the Comenity Bank Virgin America cards will be discontinued (so apply soon if you’re interested!).

I’ll keep y’all updated as we learn more details of the deal.

What’s your wish list for the Alaska Airlines – Virgin America merger?