Alaska Airlines has successfully navigated the U.S. Justice Department’s scrutiny after the antitrust investigation into its planned acquisition of Hawaiian Airlines concluded. This development comes after eight months of examination following the announcement of a $1.9 billion merger between the two carriers. The absence of a lawsuit to block the deal marks a significant milestone in the consolidation process.
While the U.S. Justice Department has given the green light, Alaska Airlines and Hawaiian Airlines still require approval from the U.S. Transportation Department before finalizing the merger. The timeline for this regulatory process remains uncertain at this stage. If approved, this merger would mark the largest consolidation in the U.S. airline industry since Alaska’s merger with Virgin America eight years ago.
The recent court ruling that blocked JetBlue Airways’ acquisition of Spirit Airlines, as well as the dissolution of a partnership between JetBlue and American Airlines in the Northeast, underscore the rigorous regulatory environment in the airline industry. Hawaiian Airlines has faced various challenges leading up to the merger announcement, including the impact of Maui wildfires, heightened competition from Southwest Airlines, and slow recovery of travel demand to and from Asia post the Covid-19 pandemic.
Despite posting net losses in all but one quarter since the beginning of 2020, Hawaiian Airlines’ executives have expressed optimism about improving booking trends. This positive outlook is reflected in the nearly 12% increase in Hawaiian’s shares during the current quarter, a stark contrast to the decline seen in most other airlines’ stock prices. The proposed merger aims to leverage the strengths of both carriers while expanding their collective reach to over 130 destinations with a combined fleet of more than 360 airplanes.
Alaska Airlines’ successful clearance by the U.S. Justice Department represents a crucial step towards the finalization of its acquisition of Hawaiian Airlines. As the aviation industry continues to undergo significant transformations, this consolidation sets the stage for a strengthened competitive position and enhanced operational efficiencies for both carriers in the post-pandemic landscape.