Virgin America and Alaska Air Group Inc have submitted paperwork on Friday describing their transaction to the government. This came eleven days after Alaska announced that it would acquire Virgin for $2.6 billion. The paperwork is required by the Hart-Scott-Rodino Antitrust Improvement Act.
This law enables the Justice Department, the Federal Trade Commission and the U.S. Justice Department to examine the proposed contract between the two merging parties ahead of time.
This will enable the three agencies to assess whether the contract is anticompetitive to other businesses.
When it comes to airline business, the Justice Department is the agency that takes the lead. The confirmation about the paperwork filing was confirmed by the Seattle-based parent company of Virgin America and Alaska Air.
This partnership, according to some experts, will give west coast liners an advantage with regards to air travel options.
Seattle has been the base of Alaska Air and it also operates in Alaska and the Northwest. Meanwhile, Virgin is based in San Francisco and provides many flights in and out of California.
"They're going to have a lot more flight options and travelers in the Northwest love Alaska because they have a lucrative mileage program, so they'll be able to use it more to even greater destinations," Nancy Parrott said. She is the Vice President and General Manager of CI Azumano Travel.
It will take the Feds about 30 days to review the contract between the two airlines after which they can close their deal. But they can also request for additional information in what is called a second request.
If so, the 30 day waiting period will be extended after the contracting companies have supplied the requested additional materials. Should the regulators deem that the contract violates antitrust laws, they can call for an injunction in a federal court so that the two parties cannot consummate their transaction.
