Alaska Air, US regulators near settlement on $2.6-bn acquisition of Virgin America

Alaska Air Group Inc is nearing a settlement with US antitrust regulators over its proposed $2.6-billion acquisition of Virgin America Inc, Reuters today reported, citing a person familiar with the matter.

The US Department of Justice (DoJ) had launched an anti-trust investigation after consumers and travel agents filed a lawsuit to block the merger on the grounds that it would reduce competition and air services.

Virgin's lawyers said in a filing with the Northern District Court of California that ''Alaska believes that Department of Justice review will likely be completed by the end of November.''

Seattle-based Alaska Air had in April struck a deal to buy San Francisco-based Virgin America for $57 per share or $2.6 billion in order to create the 5th largest airline in the US.

The deal would also make Alaska Air the top carrier on the US West Coast and be able to compete with larger airlines.

Alaska Air has been in talks with the DoJ and is said to have offered concessions, including scrapping part of one or more code-sharing agreements it has with larger US carriers.

Alaska Air, based in SeaTac, Washington, was formed in 1985 and a year later acquired Horizon Air and Jet America Airlines.

Alaska Air subsidiaries has around 12,000 employees and operates only US built Boeing aircraft with up to 181 seats.

A successful deal would help Virgin America expand its route network out of Washington State, Oregon, Alaska, Los Angeles and San Francisco as well as rights to operate at New York's LaGuardia and Kennedy, New Jersey's Newark Liberty and Washington's Reagan National airports.