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Court order seeks to block the Alaska Air-Virgin America merger
Friday, 12 Sep, 2016
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A last minute legal challenge aims to block the proposed takeover of Virgin America by Alaska Airlines.
The lawsuit, filed in San Francisco on behalf of more than 40 customers, says it would lead to less competition causing higher fares and job losses.
Alaska recently announced more than 200 management jobs would go as a result of the merger.
The $4 billion merger would make the combined company the fifth biggest airline business.
"Lesser competition can lead to monopolies, and the consumer really loses out in that situation. The existence of Virgin America for the free enterprise system is crucial," said attorney Joe Alioto, who is representing the 42 plaintiffs.
The action is seeking a court order to block the $4 billion ongoing acquisition.
The plaintiffs include frequent flyers and travel agents who say their businesses will be harmed by the merger.
Alaska Air says it is unconcerned over the legal challenge and expects to close the deal by the year-end.
"We are working under our existing timing agreement, which states that we will close sometime in early Q4 and not before Sept. 30. We fully expected various litigation following our April 4 announcement and are not surprised by this particular firm, who has a history of making these types of filings," said Alaska Airlines spokeswoman Ann Zaninovich.
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Editor for TravelMole North America and Asia pacific regions. Ray is a highly experienced (15+ years) skilled journalist and editor predominantly in travel, hospitality and lifestyle working with a huge number of major market-leading brands. He has also cover in-depth news, interviews and features in general business, finance, tech and geopolitical issues for a select few major news outlets and publishers.
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