Virgin America (VA) CEO David Cush didn't expect to be where he is is Monday, selling the airline four months before its ninth birthday.
"It certainly wasn't what we were looking for," Cush said in an interview Monday after Alaska Airlines (ALK) - Get Report said it will buy Virgin America for $4 billion, assuming regulatory approval. "We were focused on growing organically. We had great plans. But ultimately, you don't get to choose your path. You've got to be ready to do the right thing, even if it's not what you wanted."
Cush was named CEO of Virgin America in November 2007. The airline began flying Aug. 8, 2008. Eventually, it encountered sharp increases in fuel prices and a difficult economy. "In the rough times in 2011 and 2012, we wondered whether we would keep going," Cush said. "Everyone was failing around us."
But the end comes under far different circumstances, at a time of record airline industry profits. Alaska first approached Virgin America in November. "They put an offer on the table (and) they had the resources to execute the transaction," Cush said. "The discussions became more formal in December. January was when things heated up."
JetBlue (JBLU) - Get Report entered the bidding, and sale discussions "started in earnest on Thursday and Friday-- that's when most of the activity happened," Cush said. "They were both very prepared, both had very good plans, both ran very disciplined processes."
Cush declined to disclose Alaska's opening bid, but he said that between Thursday and Sunday, the price gained 15%. Virgin America had gone public in November 2014 at $23 a share; it was sold at $57 a share. "If we're going to go out, it's a nice way to go out," Cush said.
The deal will make Alaska the third-biggest Bay Area carrier, behind United, which has a hub at San Francisco International Airport, and Southwest, which has its 10th biggest airport presence at Oakland International Airport.
In general, Alaska and Virgin America tend to price somewhat lower than competitors, and Cush said he thinks regulators will look favorably on a deal that will create the fifth-biggest airline with about 8% of industry capacity. At SFO, "we do price a bit lower than United, and United prices a lot lower than they used to," Cush said.
"People are being a little bit pessimistic about how quickly it will go through," he said. "The combined carrier will be a stronger competitor to the majors. It will have a positive impact on competition nationwide." Alaska, which has been strongly focused on its Seattle hub, will have an increased East-West presence.
For now, Cush will continue to run Virgin America. "We will keep executing until there is a close," he said. "We'll make sure our teammates are OK; in general, they are, and my focus will be on running the airline."
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.