Alaska Air completes acquisition of Virgin America

Alaska Air Group said Wednesday it completed its $2.6 billion acquisition of Virgin America to become the fifth-largest U.S. carrier.

The four big U.S. airlines by passenger traffic are American, Delta, United and Southwest, following years of consolidation within the industry and carrier mergers.

Last week, Alaska Air won U.S. antitrust approval for its acquisition of Virgin America on the condition that it would scale back its code-sharing with American Airlines.

Under the settlement with the Justice Department, the companies would be banned from code-sharing on routes where Virgin and American Airlines now compete.

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Code-sharing is also barred on routes that Alaska might start in the future if American also flies them.

CFRA Research analyst Jim Corridore said Alaska's acquisition of the cost-sensitive California-based carrier would probably lead to higher fares for consumers in the long run.

Consumers will have better route options with Alaska's access to a wider network, he said, "but in general, any time you have competitor come out of a market, it's not really good for the consumer."

Alaska Air said that with the acquisition, it had nearly 1,200 daily flights to 118 destinations. The companies announced the deal in April.

The Seattle-based carrier's stock was down 0.2 percent at $86.73 in midday trading.

The company said it would continue to operate the Virgin America fleet with its current name for a while and would conduct customer research to understand what fliers value most.

(Reporting by Ankit Ajmera in Bengaluru and Alana Wise in New York.)