December 7, 2016
The Department of Justice has approved Alaska Airlines’ $4 billion acquisition of Virgin America. The DOJ’s approval was the final hurdle in the acquisition, which will eventually lead to the fifth largest U.S. carrier.
Though Alaska is being required to reduce the scope of its codeshare agreement with American Airlines, the Seattle-based passenger air-carrier is not required to divest assets such as airport gates. Still, the requirement means reducing the volume of American passengers on Alaska flights by about half.
Though the final regulatory barrier was cleared, a lawsuit in San Francisco federal court will need to be resolved. The lawsuit’s plaintiffs, representing Virgin passengers, are challenging the merger. According to Alaska Airlines, such lawsuits are common with mergers.
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