A deal could be announced as early as Monday, the source told Reuters.
Earlier, The Wall Street Journal said Alaska Air had emerged as the likely winner of an auction for Virgin America, citing people familiar with the matter.
Alaska Air is expected to pay upwards of $2 billion for Virgin America, which currently has a market value of about $1.5 billion, following a surge sparked by recent news that the company was in play, it reported one of the people as saying. There is no guarantee Alaska Air will clinch the deal, the Journal quoted its sources as saying.
Virgin America has received takeover bids from JetBlue and Alaska Air as the U.S. budget airline backed by British billionaire Richard Branson explores a sale, a person familiar told Reuters last week.
Asian airlines have also expressed interest in buying Virgin America, although they would have to partner with a U.S. bidder under foreign ownership rules governing U.S. airlines. Virgin America is 54 percent-owned by Branson’s Virgin Group Ltd and New York-based Cyrus Capital Partners LP, the Journal said.