Alaska Air to buy Virgin America in the $ 4 billion deal

Horizontal tail of Virgin Atlantic and Alaska Airlines aircraftImage copyrightAlaskaAirlines
Alaska Air Group has agreed to buy Virgin America in the transaction $ 4 billion (£ 2.8 billion) to create the fifth-largest US airline.

This will allow Alaska Seattle expand into profitable hubs such as San Francisco and Los Angeles.

Two board "unanimously approved" the deal, which will see the Alaska purchase Virgin America for $ 57 (£ 40) per share.

However, the Virgin founder Sir Richard Branson said that "unfortunately, nothing [he] could do to stop the" deal.

This merging of commercial airlines as US Airways and American Airlines first in the United States combined in 2013 to make the largest carrier in the world.

"Sadness"

Sir Richard BransonImage copyrightFrazer Harrison
Image captionSir Richard expressed his "sorrow" in the transaction for the acquisition of Alaska Air Virgin America
Virgin America, which accounts for about 1.5% of US domestic flight capacity was listed on the US stock market in 2014 as an offshoot of the London Virgin Group.

In a company blog, Sir Richard said: "I would be lying if I did not admit that our great sadness combined with another airline.

"Because I am not an American, the US Department of Transportation provided I take some of my shares of Virgin America, as the non-voting shares, reducing its impact on any absorption. So it was not, unfortunately, I could not do anything to stop it" .

He added that the consolidation is a trend that "can not be stopped," with the four airlines currently controlling more than 80% of the US market.

expansion

Alaska and its partner regional airlines, which together account for about 5% of US domestic flight capacity, serving more than 100 cities in the US, Canada, Costa Rica and Mexico.

If the transaction is approved by the state of US regulators and shareholders of Virgin America, the companies plan to complete the transaction before January 1, 2017.

Brad Tilden Regional, chairman and chief executive officer of Alaska Air Group, said: "With our extended network and strong presence in California, we offer customers a more attractive flight options to travel non-stop."

Virgin America shares rose 40% to $ 54.52 - just below the offer price - in early trading.

Alaska, which is reported to have beaten competition from rival Jet Blue Airlines for the company, fell 4.7% to $ 78.15.