As long as we're playing "what if" why don't we consider what if Alaska had grown organically instead of buying VX? The cost to start Virgin America and grow it to 60 aircraft was about $900 million dollars. Alaska could've done the same thing starting in 2007: ordered an additional 60 737s and used them for California expansion. This expansion would've been cheaper and easier for Alaska than it was to launch and grow VX because Alaska was already an established airline with a network, loyalty program, credit card, ttraining department, maintenance etc. I'm guessing that Alaska could've grown itself in California to the size of VX for $600 million vs Virgin America's $900 million.

Alaska's risk aversion meant that Alaska paid $4 billion for what it could've done by itself for $600 to $900 million. That $4 billion was money earned by the Alaska employees and it went straight into the pockets of the billionaire hedge fund owners of Virgin America (Cyrus Capital still owned over 50% of VX's stock at the time of the merger, Branson 25%, various characters from American airlines history held around 10%.)

I think Brad and Ben are smart guys and they learned from this mistake. I'm hopeful that they'll be more aggressive in the future.