Alaska Air closing in on Virgin America purchase

SEATTLE, April 3 (UPI) -- Alaska Airlines is apparently getting close to completing its purchase of Virgin America, the airline backed by entrepreneur Richard Branson.

A source close to the negotiations told The New York Times the sale price is somewhere around $2 billion, but the deal could still fall apart at the last minute. JetBlue could still make a last-minute bid for Virgin, but Alaska appears to be in the best financial position to complete the sale.

As Bloomberg reported, Alaska Airlines is one of the only carriers with an investment-grade credit rating. It also has a superior market value and more liquidity.

Delta, the largest carrier in the United States, has made a concerted effort to beef up its West Coast hubs. The Seattle-based Alaska Airlines likely sees the absorption of Virgin's sizable operations in Los Angeles and San Francisco as a way to fend of Delta's push.

Should the deal be finalized, a sale would likely be announced on Monday. Any sort of merger is sure to face stiff scrutiny from the Justice Department. There's concern among policy makers that further consolidation inside the airline industry will lead to higher prices.

The Justice Department was unsuccessful in their challenge of the 2013 merger of American Airlines and US Airways.