Airline merger tips

Alaska and Virgin America are two great airlines that consistently deliver low fares and an outstanding customer experience. By bringing them together, we are creating the premier airline for people who live anywhere on the West Coast.

When an airline’s own pilots call its service “outright embarrassing,” and deride the company’s corporate culture as “toxic,” you can safely say that airline has a problem.

American Airlines today announced its financial-performance numbers for the fourth quarter and the full year.

According to the just-released Airline Quality Rating study, Virgin America is the country’s best airline. Of the 13 airlines ranked in the study, Alaska Airlines was rated fifth.

Consolidation is the enemy of competition. That’s an axiom of economic theory. And it’s a truth known to any kid who was forced to cut the price of his lemonade when the neighbor opened another lemonade stand across the street.

In case you hadn’t noticed, the Big Three legacy airlines have changed their pricing policy for multi-city trips. And yes, you guessed it: The new policy makes such trips more expensive. In some cases, much more expensive.

Last week, amid unconfirmed rumors that Virgin America was in merger talks with unnamed potential acquirers, I suggested that the best fit would be a combination with JetBlue. According to a new Bloomberg report, I was half right: One of the would-be buyers is indeed JetBlue; the other is Alaska Airlines.

While JetBlue’s new elite status-match campaign isn’t overtly directed at any single airline, its underlying goal is almost certainly to wean away current Virgin America elites in the run-up to that airline’s merger with Alaska Airlines.

Understandably, Virgin America loyalists are an unsettled lot, with their perky, tech-forward airline now set to be absorbed by an airline whose personality is represented by a scowling Eskimo.

Things seemed to be looking up for United. The company’s CEO, Oscar Munoz, had announced his imminent return to the job, less than three months after a heart transplant. In a news release announcing Munoz’s return, a United board member gushed thusly:

Bigger is better.

Goodbye, Virgin America.