BTC Applauds U.S. DOJ Action On Proposed Alaska Airways – Virgin America Transaction

Dec. 6, 2016
BTC: Preserving competition and the incentive to contest new markets is paramount in a domestic industry where four airlines control some 80 percent of seats – down from 11 airlines in recent years.

December 6, 2016, WASHINGTON, DC – The Business Travel Coalition (BTC) applauded the U.S. Department of Justice (DOJ) in filing a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to block the proposed merger of Alaska Airways (“Alaska”) and Virgin America (Virgin”). Preserving competition and the incentive to contest new markets is paramount in a domestic industry where four airlines control some 80 percent of seats – down from eleven airlines in recent years. 

DOJ offered a proposed settlement wherein Alaska would need to discontinue its codeshare arrangement with American Airlines (“American”) on routes where Virgin competes directly with American and also where Alaska would likely initiate new service in competition with American post merger. DOJ would allow continued codesharing on routes that could offer some consumer benefits, e.g., to destinations one of the airlines would not likely serve on its own in the near term.  

Likewise, DOJ advised that any sale or lease of gates or slots by Alaska that were acquired by Virgin as part of the settlement of DOJ’s lawsuit challenging the 2013 merger of American and US Airways would require DOJ pre-approval. This would ensure that American does not regain control of those assets. Airports where those assets are housed are Dallas Love Field Airport, Washington Reagan National Airport and New York’s LaGuardia Airport. 

“Virgin America and Alaska Airways are both innovative, quality airlines that provide the competitive rivalry necessary to discipline prices for consumers and keep pressure on airlines to improve customer service levels on many routes,” stated BTC founder Kevin Mitchell. “Start-up airline entry is very difficult today and remedies for the many competition and consumer problems are few. As such, the preservation of existing competition is critically important,” added Mitchell.

About BTC
Founded in 1994, the mission of Business Travel Coalition is to interpret industry and government policies and practices and provide a platform so that the managed travel community can influence issues of strategic importance to their organizations.