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Why Is Alaska Air Betting Big On California?

Alaska Air ( ALK ), through its $2.6 billion acquisition of Virgin America, is aiming big at California. Although we are yet to hear on the final date of closing the deal, a spokesperson from the airline said that the deal is on track to close by the end of this year. The deal is expected to not only add $1.5 billion to the company's top line, but also help Alaska establish a powerful West Coast network by giving access to California's large customer base.

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In the following note, we talk about Alaska's big bet on the Californian market for future growth.

In the following note, we talk about Alaska's big bet on the Californian market for future growth.

1. California Is Almost Thrice The Size of Alaska's Three Top Markets

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2. Alaska Has Huge Growth Potential In California Given Its Limited Market Share Of 7%

Before:

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After:

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3. California Is The Highest Ranking State In Terms Of GSP, Signifying Purchasing Power, and Ultimately Growth In Demand For Air Travel

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4. Increased Access To Gates On West Coast To Make Alaska The Market Leader In LAX and SFO

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5. A Vast Network Across The West Coast To Help Compete With Peers
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See Our Complete Analysis For Alaska Air Here

Have more questions about Alaska Air ( ALK )? See the following links:

  • Airlines And The Federal Minimum Wage
  • How Did Alaska Air Perform Operationally In October?
  • Alaska Air Reports A Solid September Quarter On The Back Of Continued Capacity Expansion
  • Alaska Air Q3'16 Earnings Preview: Continued Capacity Growth, Higher Unit Costs To Weigh On Earnings
  • How Did Alaska Air Perform Operationally In September?
  • Why Has Alaska Air's Stock Price Fallen 20% Since The Beginning Of The Year?
  • Will The Alaska Air-Virgin America Deal Get Delayed?
  • Why Are The Air Fares Offered By The U.S. Airlines Falling?
  • How Did Alaska Air Perform Operationally In August?
  • What Is The Role Of Passenger Airlines In The Air Cargo Industry?
  • Why Have We Revised Alaska Air's Price Estimate To $69 Per Share?
  • Alaska Air Reports Another Strong Quarter Backed By Rapid Capacity Growth And Lower Fuel Costs
  • Alaska Air Q2'16 Earnings Preview: Capacity Growth, Fiscal Discipline To Support Earnings
  • How Will The Virgin America Deal Impact Alaska Air's Share Repurchase Program?
  • Will Alaska Air-Virgin America Face Antitrust Issues?
  • How Will The Virgin America Merger Impact Alaska Air's Cost Of Capital?
  • How Will Alaska Air's Market Share Change Post The Virgin America Deal?
  • Why Is Alaska Air Acquiring Virgin America?
  • How Will Alaska Air Benefit From The Virgin America Deal Operationally?
  • How Will The Expected Return On The Alaska Air-Virgin America Merger Compare With The Previous Deals In The Sector?
  • How Will The Virgin America Deal Alter Alaska Air's Capital Structure?
  • Has Alaska Air Paid A Fair Price For Acquiring Virgin America?
  • Alaska Air's Earnings Rise On The Back Of Rapid Capacity Growth And Lower Fuel Costs

Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com

2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Alaska Air Group

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.