Thanks! You're all signed up.

X

For Sale: Virgin America?

SmarterTravel

Bigger is better.

Consolidate, consolidate, consolidate.

Such is the mantra of the travel industry, where 80 percent of U.S. domestic air traffic is controlled by just four airlines, and Marriott is in a bidding war to acquire Starwood to create the world’s largest hotel company.

Next up for airline mergers? Yesterday, most industry-watchers would have pointed to Frontier and Spirit, the two ultra-low-cost carriers that are widely assumed to be destined to combine.

That expectation was unsettled if not quashed by today’s Bloomberg story that Virgin America is looking to sell itself:

Virgin America Inc., the airline backed by U.K. billionaire Richard Branson, is reaching out to potential buyers about a sale of part or all of the company, people with knowledge of the matter said.

RELATED: Spirit Has the Profits. Now It Wants the Love

No specifics. No decisions have been made. And “Virgin America may choose not to pursue a sale.” Still, the report was taken very seriously by Wall Street, where Virgin America shares shot up as much as 15 percent in early buying, before trading was suspended temporarily.

Virgin America has a lot going for itself, if you’re a traveler. Newish planes, comfortable seating, advanced inflight entertainment, a cool vibe. But the airline’s singular personality, which has made it a hit with flyers, also makes it an improbable merger partner.

Spirit and Frontier match up well in a merger scenario. In addition to their similar “bare fares” pricing, both airlines operate all-Airbus fleets, and both use the New Skies reservations system for bookings.

On paper, the best fit with Virgin America would be JetBlue. Airbus fleets. Somewhat complementary route networks. Both strive for hipness, although there are differences in emphasis. An argument could be made.

Of course, the eventual buyer, if there is one, may not be another airline at all. It might be a hotel group, looking for synergies between its properties and Virgin America’s destinations. It might be a holding company, looking for exposure to the travel industry, which is robustly profitable right now.

Travelers’ best hope, in fact, is that the buyer is not another airline. Because for consumers, bigger is not better.

Reader Reality Check

A JetBlue-Virgin America merger: yay or nay?

More from SmarterTravel:

After 20 years working in the travel industry, and 15 years writing about it, Tim Winship knows a thing or two about travel. Follow him on Twitter @twinship.

We hand-pick everything we recommend and select items through testing and reviews. Some products are sent to us free of charge with no incentive to offer a favorable review. We offer our unbiased opinions and do not accept compensation to review products. All items are in stock and prices are accurate at the time of publication. If you buy something through our links, we may earn a commission.

Top Fares From

Comments