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Travelers Sue to Block Alaska-Virgin America Merger

SmarterTravel

The merger of Alaska Airlines and Virgin America has left many travelers bemoaning the impending disappearance of Virgin, one of the industry’s best-loved airlines, as it’s folded into Alaska.

Some of those disgruntled travelers are plaintiffs in a suit filed last week in the U.S. District Court in San Francisco seeking to block the merger on anti-trust grounds.

From the complaint’s introduction:

The “threatened loss or damage” to the Plaintiffs and to the public at-large by the potential elimination of Virgin America as a competitor, the most innovative, passenger friendly, premium low cost and unique airline in the industry, is substantial and foreboding… Plaintiffs bring this action under the authority of Section 16 of the Clayton Antitrust Act (15 U.S.C. § 26) and allege that the proposed elimination of Virgin America by the Defendant Alaska Airlines constitutes a substantial threat of injury to the Plaintiffs because the acquisition may have the effect substantially to lessen competition and tend to create a monopoly in various markets in violation of Section 7 of the Clayton Antitrust Act (15 U.S.C. § 18).

The complaint notes that industry consolidation has already progressed to the point that 84 percent of airline service in the U.S. is controlled by just four airlines, American, Delta, Southwest, and United. In conjunction with that consolidation, ancillary fees have skyrocketed, and will likely increase further with the elimination of Virgin as a competitor.

Other effects of the recent consolidation cited by the complaint include a reduction of service to smaller markets, employee cutbacks, and higher fares.

There’s little question that airline consolidation has been a net detriment to the interests of consumers, for many of the reasons the suit mentions. But with the precedent already set by the approval of mergers between American and US Airways, United and Continental, and Delta and Northwest, it’s hard to imagine that this suit will get the traction it needs to succeed.

And from an antitrust standpoint, it can be argued that a combination of Alaska and Virgin, which would create the country’s fifth largest carrier, would increase competition, by creating a player capable of giving the Big Four a run for their money.

The Alaska-Virgin merger will proceed, and air travel will be the worse for it. The loss of Virgin America will be mourned, and it should be. But the airline will soon be a footnote in the history of commercial aviation, as will this lawsuit.

Reader Reality Check

Will you miss Virgin America?

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.

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