Essentially, Virgin America never really wanted to sell to Alaska. But with its future in the hands of the private investors, the decision was never the founders to make.

Branson said there was nothing he could do to stop the takeover.

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Why Alaska wanted Virgin

There wasn’t much that Virgin America had that was worth a lot. Its small fleet of Airbus aircraft was mostly leased, and incompatible with Alaska’s all-Boeing fleet. Most of its infrastructure was leased too, such as ground equipment and offices. Its frequent flier scheme wasn’t particularly valuable, and yet Alaska saw a value in the airline. $2.6 billion of value, in fact.

In 2015, the last year before Alaska took over Virgin America, the airline turned a rare profit of $201.6 million. For Alaska to make back its investment with annual profits like that would take almost 13 years. That’s not accounting for the sizeable investment required to assimilate the company, its computer systems, staff and operations.

The airline's Airbus fleet was incompatible with Alaska's all-Boeing operation.

The reason for Alaska’s strong bid for Virgin America was, essentially, about limiting competition. With its home turf in Seattle under threat from Delta’s growing encroachment, market share was becoming ever-more valuable for the airline. And Virgin America was something of a thorn in its side.

In those routes where competition was strong, Virgin America was an aggressive fare discounter. Seats were sold at a barely break-even price, and Alaska was forced to lower its prices too. While it would never be admitted in public, for fear of anti-competitive repercussions, Alaska needed to stop this antagonistic competitor in its tracks.

On the outside, the deal was all about slots and stopping JetBlue, the second highest bidder from taking over the airline. Alaska instantly became the 5th largest airline in the States, and acquired valuable routes to expansion through the gates and landing slots on the East and West Coast. But to do so, it paid a premium. The deal saw it paying $57 per share, 47% higher than the stock was trading at the time.

Nevertheless, the deal was done, and while Alaska might have overpaid for Virgin America, it helped it secure its growth for the future.