Alaska Airlines has just cleared its path to acquiring Virgin America. There had been a private antitrust lawsuit filed by flyers and travel agents, who hoped to block the acquisition for fear that it would lead to fare hikes and an industry monopoly, However, on Wednesday, Alaska Airlines settled the lawsuit, allowing them to continue with the merger.
The lawsuit was filed in September by 41 consumers and travel agents. Joe Alioto, the plaintiffs’ attorney, stated, “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.”
The U.S. Justice Department has approved the purchase with the condition that Alaska loosens a partnership with American Airlines concerning specific routes. Alaska, which defended that the merger complied with antitrust laws and was not anti-competitive, has denied to share any additional settlement terms. This acquisition will make Alaska Airlines the fifth-largest airline in the U.S., ahead of JetBlue Airways, which has also tried to buy Virgin America.