Alaska Air buys Virgin America

Associated Press

NEW YORK

Virgin America has loyal passengers who love the airline’s cool vibe even if its size and schedule are too limited to meet all their travel needs.

But it appears to be going away.

Alaska Airlines’ parent company announced Monday that it will pay $2.6 billion to buy the Richard Branson-inspired, California-based carrier. Alaska hopes to become travelers’ preferred airline on the West Coast and a tougher competitor to giants American, Delta and United on transcontinental routes.

The deal would vault Alaska over JetBlue – the losing bidder for Virgin America – to become the nation’s fifth-biggest airline by passenger traffic.

Since it started flying in 2007, Virgin has helped bring down fares on transcontinental routes between California and New York, and it engaged in a price war with Southwest that led to dramatically lower fares in Dallas.

Some analysts believe the merger will mean fewer bargain fares. Mergers and acquisitions already have reduced nine major U.S. airlines to four and made it easier for the survivors to limit flights, an indirect way to avoid cutting prices. Now two smaller carriers are combining, again leaving passengers with fewer choices.