Virgin America, established on January 26, 2004, and commencing operations on August 8, 2007, was a low-cost airline that operated until 2018 when it was acquired by Alaska Airlines. The airline primarily focused on providing low-fare services between West Coast cities and other major metropolitan areas while maintaining a commitment to quality service. It had its headquarters in the San Francisco Bay area and offered domestic flights to major U.S. cities, with hubs at Los Angeles International Airport and San Francisco International Airport.

Virgin America began operating independently in 2007 under a brand license from the UK-based Virgin Group, which also controls the Virgin Atlantic and Virgin Australia brands. In April 2016, Alaska Airlines acquired Virgin America for $4 billion, and it continued to operate under the Virgin America name until the full merger with Alaska Airlines on April 24, 2018.

Historical Background

In early 2004, the Virgin Group announced its intention to establish a U.S.-based low-fare airline called Virgin USA, initially aiming for flights to begin by mid-2005. After considering various locations, the San Francisco Bay Area was chosen for its flight operations center, which later became the corporate headquarters. The airline was eventually renamed Virgin America, although the launch date was postponed from mid-2005 to early 2006.

The airline secured investments from U.S. investors Black Canyon Capital and Cyrus Capital Partners in late 2005. With the new ownership in place, the airline submitted its application for a U.S. Department of Transportation certificate on December 9, 2005. The approval process faced significant debates between supportive city and state representatives from California and New York and opposition from national aviation labor unions.

Virgin Group Operations

Virgin America started ticket sales in July 2007, and on August 8, 2007, it made its inaugural flights from New York and Los Angeles to San Francisco. David Cush replaced Reid as the CEO of the airline in December 2007. While the airline reported losses from its early days, with losses totaling $270 million in the first month, it achieved its first profit of $7.5 million in the third quarter of 2010.

Virgin America became the first U.S. airline to offer Wi-Fi access via Gogo Inflight Internet on all its flights. It even offered free Wi-Fi from November 10, 2009, to January 15, 2010, with a subsidy from Google. On December 17, 2014, the airline announced faster fleet-wide ATG-4 in-flight Wi-Fi service from Gogo, with speeds three times faster than the first-generation system.

Virgin America also revealed its plan to introduce flights to Toronto from Los Angeles in March 2010, marking the airline's first international destination. International service commenced with flights to Toronto Pearson International Airport on June 29, 2010. However, due to high operating costs, slower growth, competitive responses, and stronger demand for Dallas, Virgin America terminated its Toronto service on April 6, 2011.

In January 2011, the airline placed a firm order for sixty new Airbus A320 aircraft, including thirty new Airbus A320neos.

Alaska Airlines Merger

Virgin America had its first public offering on the NASDAQ stock exchange on November 14, 2014, selling 13.3 million shares to raise $307 million for the company. In late 2015, multiple airlines expressed interest in acquiring Virgin America, leading the airline to engage with an undisclosed financial advisor to explore the sale. Alaska Airlines showed interest at $44.75 per share in 2015, triggering a bidding war that took place on March 31 and April 1, ultimately valuing the company at $57 per share.