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What the Alaska Air/Virgin America merger means for consumers

A Virgin America plane takes off past an Alaska Airlines plane at Seattle-Tacoma International Airport in Seattle. (AP)
A Virgin America plane takes off past an Alaska Airlines plane at Seattle-Tacoma International Airport in Seattle. (AP)

Alaska Air Group (ALK) finalized its $2.6 billion acquisition of Virgin America on Wednesday, creating the fifth-largest airline in the US, serving nearly 40 million customers.

The two companies originally announced plans to merge in April, with Virgin America shareholders approving the deal in July. The final step was getting clearance from the Department of Justice, which happened on Dec. 6.

This merger will make the new airline a dominant presence west of the Mississippi, offering more nonstop destinations on the West Coast than any other airline. Overall, their combined fleet of 286 planes will fly 1,187 daily flights to 118 cities in the US, Mexico, Canada, Costa Rica and Cuba.

For consumers, the combination could have a real impact on how they earn and use miles. In 2016, U.S. News and World Report identified Alaska Airlines Mileage Plan as the best frequent flier program for US carriers. Unlike the spend-based programs that have become popular with Delta and American, Alaska Airlines still allows its members to earn points based on number of miles flows. Program members also have access to more than 800 destinations around the world through Alaska’s Global partners. This distinction is something the Alaska Air Group wants to maintain during the transition.

“We plan to make this the most customer-friendly merger ever, and we will have much more to announce over the coming weeks,” said Brad Tilden, CEO of Alaska Air Group, which is based in Seattle.

What we do know is that starting on Dec. 19, Virgin America Elevate members will be able to earn Elevate points on Alaska flights. Alaska Mileage Plan members will also be able to earn miles on Virgin America flights.

Even more, elite members of both programs will get priority check-in and priority boarding on each airline. Travelers will also be able to buy Virgin America tickets through Alaskaair.com.

The next wave of change will occur on Jan. 9, when members of both programs will be able to actually redeem award travel on both networks. Additionally, Virgin America Elevate members will have the option to activate new Alaska Airlines Mileage Plan accounts with their elite status matched.

In the meantime, it’s travel as usual for customers. If you have an existing reservation, your itinerary will remain the same. Likewise, if you are booked on Virgin America, you will still go to the Virgin America airport counter to check in. The same goes for Alaska Air travelers.

This acquisition is just the latest in a series of airline mergers. In 2013, American Airlines acquired US Airways; Southwest bought AirTran Airways in 2011; United Airlines merged with Continental in 2010; and Delta acquired Northwest Airlines back in 2009.

Brittany is a writer at Yahoo Finance.


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