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| Virgin America bought by Alaska Airlines, triggering Branson windfall | Virgin America bought by Alaska Airlines, triggering Branson windfall |
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| Sir Richard Branson is expected to make almost £550m after Alaska Airlines agreed to pay $2.6bn (£1.8bn) for Virgin America, the US budget airline the British billionaire launched in 2007. | Sir Richard Branson is expected to make almost £550m after Alaska Airlines agreed to pay $2.6bn (£1.8bn) for Virgin America, the US budget airline the British billionaire launched in 2007. |
| Alaska Airlines said it agreed to pay $57 a share, or $2.6bn, in cash for Virgin America, which flies to 21 destinations within the US and Mexico. Including Virgin America’s debt and aircraft operating leases, the deal is valued at $4bn. | Alaska Airlines said it agreed to pay $57 a share, or $2.6bn, in cash for Virgin America, which flies to 21 destinations within the US and Mexico. Including Virgin America’s debt and aircraft operating leases, the deal is valued at $4bn. |
| Shares in Virgin America soared last month after reports that the company was up for sale. Branson’s Virgin group owns about 30% after floating the business on the stock market in 2014 with a value of slightly more than $1bn. The takeover by Alaska Airlines means Branson’s stake has more than doubled in value in the past year and a half. | |
| The airline has attempted to stand out from established competitors in the US with an irreverent and playful image with purple mood lighting and planes named Virgin & Tonic and Jefferson Airplane. It is the the ninth biggest US airline by passenger numbers with about 1.5% of domestic flight capacity compared with 5% for Alaska Airlines. | |
| Virgin America made a pre-tax profit of $61m on sales of $1.4bn in 2014, according to its annual statement released in February. Seattle-based Alaska Airlines triumphed over Jet Blue in a bidding war for Virgin America as smaller airlines seek to bulk up to compete with bigger rivals. | Virgin America made a pre-tax profit of $61m on sales of $1.4bn in 2014, according to its annual statement released in February. Seattle-based Alaska Airlines triumphed over Jet Blue in a bidding war for Virgin America as smaller airlines seek to bulk up to compete with bigger rivals. |
| Alaska Airlines said Virgin America would give it a bigger business in California by expanding into San Francisco and Los Angeles and strengthen it to compete against the big US airlines. The deal will also give Alaska more slots at airports in the north-east US such as Ronald Reagan Washington national airport and John F Kennedy and LaGuardia in New York. | |
| David Cush, Virgin America’s chief executive, said: “Our mission has always been to create an airline that people love – and we accomplished that while changing the industry for the better. Joining forces with Alaska Airlines will ensure that our mission lives on, and that the stronger, combined company will continue to be a great place to work and an airline that focuses on an outstanding travel experience.” | David Cush, Virgin America’s chief executive, said: “Our mission has always been to create an airline that people love – and we accomplished that while changing the industry for the better. Joining forces with Alaska Airlines will ensure that our mission lives on, and that the stronger, combined company will continue to be a great place to work and an airline that focuses on an outstanding travel experience.” |