The Department of Justice (DOJ) has given the green light to Alaska Airlines’ proposal to acquire Hawaiian Airlines, stating that the merger is not anticompetitive. After a thorough review period, the DOJ did not take any action against the $1.9 billion deal, allowing the two airlines to proceed with the merger.
Alaska’s Statement
Alaska Airlines expressed its satisfaction with the DOJ’s decision, calling it a significant milestone in the process of joining the two airlines. During the review, Alaska worked closely with the Hawaii attorney general to ensure commitments to the future of Hawaiian Airlines and Hawaii consumers, including plans to maintain the Hawaiian Airlines brand, preserve local jobs, and continue providing strong service to and from the Islands.
Even though the DOJ has cleared the merger, there are still other regulatory hurdles and closing conditions that Alaska and Hawaiian Airlines must overcome. They need interim approval from the Transportation Department to operate under common ownership while waiting for final approval for Hawaiian to transfer its international route authorities to Alaska.
Under the merger arrangement, Alaska intends to keep the Hawaiian Airlines brand intact while streamlining operations by implementing centralized scheduling, a single loyalty program, and using interchangeable aircraft. Alaska will be acquiring Hawaiian for $18 per share, with the total deal amounting to $1.9 billion, including assuming $900 million of Hawaiian Airlines debt.
The Biden administration’s DOJ has been critical of airline mergers, as evidenced by its actions against JetBlue’s acquisition of Spirit Airlines and the alliance between American and JetBlue in specific regions. However, the Alaska-Hawaiian merger received support from the Hawaiian government and was seen as beneficial due to the limited overlap between the two airlines’ networks.
Hawaii Governor Josh Green expressed optimism about the merger, highlighting the numerous benefits for consumers, employees, and the community. The merger is expected to expand the number of destinations accessible to Hawaii residents, enhance HawaiianMiles members’ travel options, and provide access to more destinations worldwide.
The approval of the Alaska Airlines’ acquisition of Hawaiian Airlines by the DOJ signifies a positive step towards consolidation in the airline industry, with a focus on maintaining competition and delivering benefits to various stakeholders.