Normally a multi-billion dollar exit would be cause for celebration.
So when news broke last month that Alaska Airlines had made a generous offer for Virgin America, it might have come as a surprise that Virgin founder Richard Branson seemed closer to breaking out in tears than breaking out the champagne.
Shortly after the announcement, in a post on Virgin's site, Branson wrote: "I would be lying if I didn't admit sadness that our wonderful airline is merging with another."
The English businessman said that there was "nothing I could do to stop it," explaining that "because I'm not American, the U.S. Department of Transportation stipulated I take some of my shares in Virgin America as non-voting shares, reducing my influence over any takeover."
Branson addressed the merger again while speaking at the Tribeca Film Festival, calling the sale of Virgin America "one of the most disappointing moments of my life."
Though Branson expressed some hope that Alaska Air would "keep the Virgin America brand in a way that people want to see it being kept," he couldn't hide his frustration with how the sale went down, saying that "for years we fought to create a decent airline in America, but the American authorities in their wisdom said because I have an English accent and that I'm born in England and not America, that I had to give up my voting rights."
Virgin America has become one of the most highly regarded domestic carriers since it began operating in 2007. By leveraging a well-known brand and focusing on major cities on the Eastern and Western seaboard, Virgin built a loyal customer base and successfully carved out a niche between the discount and legacy carriers.
Yet Virgin remained a relatively minor player in an airline industry that has undergone a wave of consolidation in the past decade. Since 2005, the number of large carriers has been reduced from nine to just four--American, United, Delta, and Southwest. Together, the big four control 80 percent of the U.S. market.
Branson hoped to keep Virgin independent, but the airline's other owners believed that a merger could ensure long-term viability, and began exploring a potential sale in March.
Alaska Air beat out JetBlue with a $2.6 billion bid, an outcome described by Virgin America CEO David Cush as a "big win for our shareholders," as well as for Virgin employees for whom "being part of a bigger airline offers greater job security in a highly consolidated industry."
Passengers might share Branson's concern about the deal. Consolidation has the potential to reduce competition and increase fares. Already, at 40 of the nation's top 100 airports, a single airline accounts for a majority of capacity, and in the past decade, domestic airfares have grown at a rate faster than overall inflation.
Still, there are reasons to be hopeful that the Alaska-Virgin merger won't lead to higher fares, and might actually bring some benefits for consumers. The travel data analytics service Hopper found overlap on only 15 direct routes between the two airlines' service, meaning there's less potential for an adverse effect on competition.
Some routes might even see downward price pressure. On their own, neither Alaska nor Virgin had a truly nationwide network, but with a fleet of 280 planes making 1,200 daily departures, the combined airline would be the fifth largest in the U.S, and a legitimate alternative to the Big Four.
That's small consolation to the man who's synonymous with a Virgin brand that might disappear from American skies.
From record labels to space travel, Branson has demonstrated a near superhuman ability to make his dreams a reality. But as the sale of Virgin America goes to show, even the most charismatic, well-coiffed billionaires have their limits. Shareholders and regulators are expected to approve the merger sometime next year.