Skift Take
The Alaska Airlines-Virgin America deal synergies won't be of the Expedia-Travelocity or Expedia-Orbitz type, where the majority of staff members of the acquired companies got pink slips. Virgin America's front-line employees should do well from a job security standpoint but a considerable number of back-of-the-house staff will have something to worry about.
For Virgin America's 2,500 frontline employees, job security is likely in the offing with news that Alaska Airlines is acquiring the company -- but some of the 5,000 or so other "teammates" might consider revising their resumes.
In a letter to employees [embedded below] yesterday, which was filed with the U.S. Securities and Exchange Commission, about the impact of Alaska Airlines' $2.6 billion all-cash acquisition of Virgin America, CEO David Cush said: "All non-frontline teammates will be needed until the transaction is closed, which is a process that typically takes a number of months, and the vast majority will be needed even beyond that point. We will keep everyone updated as we learn more from Alaska."
The deal is expected to close by January 1, 2017.
These non-frontline employees who are at risk because of duplicative airport and office operations might include positions such as maintenance personnel, airport team members, station supervisors, engineers, and other technology staff, for instance.
Cush said 8-year-old Virgin America did not seek the merger but nonetheless the ranks of frontline employees should see "much more stability and opportunity for growth."
Revenue and Cost Synergies
The merger announcement "also means that our major bases of operation -- including SFO and LAX -- will not only remain, but grow, while also opening up substantial new opportunities across Alaska’s larger network," Cush wrote. "The new combined network should provide substantial opportunities for our frontline Teammates, and all work groups with seniority rights will be integrated into single seniority lists using a fair and equitable process outlined by federal law."
In the merger material that the airlines released, Alaska Airlines projected $225 million in annual revenue and cost synergies, which are expected to "ramp up quickly."
The revenue synergies should include taking advantage of
