In a surprise move, the WSJ is reporting that Alaska Air Group (ALK) is about to win the bidding war for Virgin America (VA). The move is surprising as the market had generally assumed that JetBlue (JBLU) had a better fit with similar Airbus fleets. The report actually suggests that Virgin America fits solidly into the existing routes of Alaska Air. The combination would only involve six overlapping routes that equates to roughly 6.6% of Alaska's capacity. Even better for costs is that the combined airline becomes a solid force in both San Francisco and Los Angeles. The report though is void of details on cost savings, deal structure and even the actual stock price of the deal. The article repeats the general $2 billion valuation for Virgin America though constantly saying the airline is only worth $1.5 billion. Most sites list the airline now worth $1.7 billion making an offer price difficult to ascertain. My general speculation is that Virgin is sold for $45+ and likely in cash considering the desire of Virgin's big investors to cash out. With Alaska Air can use cheap debt for a very accretive transaction, the airline is big time buy at these prices. Disclosure: Long VA