Two years ago, Alaska Air (NYSE: ALK) offered a big premium to acquire Virgin America in order to gain a platform for growth in California. Within three months of the acquisition closing, the carrier had announced a massive expansion in California — including more than a dozen new routes in San Francisco — Virgin America’s hometown.
However, Alaska Air’s 2017 financial performance was disappointing, and the company is still struggling with a combination of rising costs and weak unit revenue in 2018. Much of the unit revenue weakness has been concentrated in California. As a result, Alaska Air has quickly gone from expansion mode to retrenchment, making cutbacks on several routes in California.
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Alaska Air cutting California routes
