By Thomas Black As a tumultuous era of airline consolidation — kicked off by deregulation in 1978 — reaches its end game, Alaska Air Group Inc. is well positioned to pull off the industry’s last large acquisition on its way to becoming a nationwide carrier.

That much was clear as Chief Executive Officer Ben Minicucci this week laid out bold plans to expand internationally and pamper flyers with premium seating, lounges and a robust loyalty program only five months after concluding the integration of its 2024 acquisition of Hawaiian Airlines. Minicucci said he’s ready to harvest profit now that the airline has grown larger and dominates more markets in Hawaii, Alaska and along the West Coast.

Minicucci’s team has shown it’s adept at managing complex mergers to build scale, first with Virgin America in 2016 and now with Hawaiian. In the latter case, the airline has already achieved two-thirds of the $1 billion in savings and synergies promised and is on track for the rest by the original timing of 2027.

Alaska should soon be ready to contemplate its next disruptive project. This is where one of the final pieces of airline consolidation — JetBlue Airways Corp. — comes into play. JetBlue has a strong market position on the East Coast, but the Long Island City, New York-based airline is struggling financially and in need of scale. Alaska has acquisition expertise and also needs more scale. There’s little operational overlap that would raise antitrust concerns.

A combination would create another nationwide carrier that provides customers with more choice, destinations and competition to keep prices in check. It would be the fifth largest behind the three legacy carriers and Southwest Airlines Co., which once was a disruptive startup but grew out of that role after becoming the largest domestic carrier by passengers.

Before deregulation, the industry had about 10 large airlines, known then as trunk carriers, around eight regional airlines and two each serving Hawaii and Alaska. Fares were regulated, and carriers earned a fixed rate of return under formulas imposed by the regulator, providing little incentive to control costs.

Deregulation drove down airfares and increased flights to popular destinations, benefiting consumers. Legacy airlines struggled as new low-cost carriers entered the fray. Airfare wars erupted, carriers went bust and the industry focused on reducing costs and stuffing as many seats and warm bodies on their planes as possible.

Two of the remaining legacy carriers — Delta Air Lines Inc. and United Airlines Holdings Inc. — hit upon the formula to fend off the upstarts and bring some sanity, profit and luxury back to the market. They figured out how to monetize business-class service instead of giving it away with free upgrades. They invested in services such as lounges, lie-flat seats and seatback screens. They learned how to cash in with airline-sponsored credit cards.

Delta and United are now the most profitable in the industry, and Alaska is following their playbook. Minicucci vowed to boost pre-tax margins to more than 10% from less than 3% in 2025.

The airline expects profit to be driven by new aircraft with more premium seating and increased spending from customers who use its credit card and lounges. The transformation has already started. Main-cabin airfares accounted for 47% of revenue this year, down from 62% in 2019, with the rest coming from premium seating, loyalty programs and even cargo. Main cabin is expected to be about 40% of revenue by 2030.

This trajectory toward double-digit margins sits in sharp contrast to JetBlue, which is saddled with debt and has been losing money ever since the pandemic. Its attempt to purchase Spirit Airlines, the low-cost carrier, was rejected by the Justice Department, and JetBlue abandoned the deal in 2024. The Justice Department previously opposed a Northeast Alliance partnership with American Airlines Group Inc., a legacy carrier.

Despite JetBlue’s strongholds in New York (where it just won coveted airport slots at LaGuardia) and Boston, too much leverage and, more recently, high jet fuel prices have hobbled the airline.

It’s unclear how JetBlue wiggles out of its financial quagmire, especially with high fuel costs. An acquisition would resolve the carrier’s debt risk for noteholders and give shareholders a premium. It would also be able to offer customers more destinations.

For now, Alaska is seeking to gain more scale by joining both the Atlantic and Pacific Joint Businesses, which are anchored by American Airlines. This partnership would involve revenue sharing and schedule coordination, requiring Alaska to seek antitrust immunity from the Department of Transportation.

The authorities need to ensure that such a partnership isn’t a step toward American merging with Alaska. None of the legacy carriers — Delta, United or American — should be allowed to expand more in the US through acquisitions. That goes for Southwest, too. Allowing these four airlines to grow even larger through acquisitions would reduce competition.

An Alaska-JetBlue combination would have the opposite effect, creating a nationwide airline that gives flyers more choices. The two together would still be smaller than the big four. Southwest had international and domestic passenger revenue miles, which is the number of flyers multiplied by the miles flown, of 139 billion in 2025, while Alaska and JetBlue together had 125 billion, according to the Bureau of Transportation Statistics. Both Delta and United had passenger revenue miles of about 234 billion last year and American logged 222 billion.

Alaska isn’t ready to discuss acquisitions yet. It just finished integrating Hawaiian and wants to reap the benefits. “The heavy lifting is behind us. The value creation is in front of us,” Minicucci said during this week’s investor gathering in Seattle. “That first chapter was about building. This next chapter is about harvesting.”After the harvest, perhaps Alaska will be ready to buy and build again. To contact the author of this story: at tblack@bloomberg.net