After accepting an all-cash $57 per share offer from Alaska Air Group (ALK), Virgin America (VA) will likely trade sideways until the deal closes later this year. The huge deal premium highlights my long-term conviction that the airline stocks are all extremely undervalued. Trading around $54.50, Virgin America shareholders stand to only make 4.5% waiting for the cash while taking some risk that the government blocks the deal to avoid more consolidation in the airline sector. The trade has been made in Virgin America so I'm out of that position. The move now is explore the accretive benefits to Alaska Air while understanding that investors typically lose interest in merger benefits before the deal ultimately closes. Disclosure: Sold VA shares