With just 48 hours left until the Department of Justice (DOJ) deadline for its decision on the merger of Hawaiian Airlines and Alaska Airlines, the situation remains extremely volatile. New developments indicate the possibility of impending litigation of some form. Two days before the deadline extension expires, there is still no official statement, making Hawaii travelers, the airline industry and investors nervous.
Today, reflecting the uncertainty of the situation, Hawaiian Airlines stock experienced dramatic swings, initially falling sharply but then recovering by the same amount it lost. This wild volatility underscores the level of nervous anticipation surrounding the potential merger and its broader implications for U.S. airlines and for Hawaii.
The Justice Department is taking steps toward a possible lawsuit.
Recent information suggests that the Justice Department may be preparing legal action against the merger. Brian Hanna, a federal antitrust attorney in the Justice Department’s Antitrust Division who was involved in the case that blocked the merger of JetBlue and Spirit Airlines earlier this year, has filed a motion to that effect in Honolulu Federal District Court.
Hanna stated, “I expect to appear on behalf of the United States and represent the interests of the United States before this court.” This move strongly suggests that the Justice Department is positioning itself for possible litigation should it become necessary to prevent the Hawaiian/Alaska merger.
Alaska Airlines, on the other hand, had a lawsuit filed by a group seeking to block its proposed acquisition of Hawaiian Airlines successfully dismissed by a U.S. district judge. The judge ruled that the plaintiffs failed to show how they would be personally affected by the merger. However, this point seems minor compared to the upcoming decision from the Justice Department.
Is a Hawaii deal still possible?
Given recent developments, there is also considerable speculation that Alaska Airlines may be seeking a settlement with the Justice Department to avoid a full-blown legal battle. Such a deal could mean that Alaska accepts certain terms or makes specific concessions to address the Justice Department’s concerns that the merger is anti-competitive.
The Justice Department’s strategy appears to be focused on identifying and correcting the “deficiencies” in the merger proposal. By negotiating potential remedies with Alaska, the Justice Department may be trying to reach an agreement that allows the merger to go ahead without blocking the deal entirely. However, if no agreement is reached, the Justice Department could file suit as early as Thursday to block the acquisition.
The way forward for Hawaiian Airlines.
As the Justice Department’s intentions become increasingly clear, the next 48 hours will be historic and decisive. The outcome of these negotiations – or the potential lawsuit – will have significant implications for Hawaiian Airlines, Alaska Airlines, the entire U.S. airline industry, and Hawaii travelers.
We will keep you updated and follow further developments as we prepare for a final decision that will shape the future of air travel to and from Hawaii. Stay tuned for further updates as the crucial deadline approaches.
Beat of Hawaii photo aboard Hawaiian Airlines’ Dreamliner.
We look forward to your input!
