Deal of the Week: Will Alaska Airlines Cramp Virgin America's Style?by
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Airline acquisitions don't have a good track record. That didn't stop Alaska Air from paying $2.6 billion for Virgin America, an 86 percent premium above its value March 22, the day before Bloomberg News first reported a deal was in the works. Alaska Air and Virgin aren't the biggest U.S. carriers, but they still have to deal with many of the aspects that have dogged previous airline mergers, including high fixed costs, strong unions and passengers wary of paying too much for tickets. Even Virgin founder Richard Branson is concerned Virgin America's customer service will suffer. Bloomberg M&A reporter Matt Monks joins Deal of the Week host Alex Sherman to discuss why Alaska Air nevertheless was willing to bet big on Virgin.