The airline named after the 49th U.S. state is allowed to proceed with its planned acquisition of the airline named after the 50th U.S. state after the Justice Department allowed a legal review period to expire during which it could have challenged the merger.
Alaska Airlines will now move forward with a $1.9 billion merger with Hawaiian Airlines after the deadline for completing a regulatory investigation by the U.S. Department of Justice passed.
As expected, when Alaska and Hawaiian Airlines announced their merger agreement in December 2023, it didn’t take long for the Department of Justice to launch an antitrust investigation under the Hart-Scott-Rodino Act (HSR Act).
The legal review deadline was originally scheduled to expire last Thursday, but as both sides negotiated the terms and concessions that would allow the merger to proceed uncontested, the Justice Department and Alaska agreed to extend the review deadline by 24 hours.
Another extension was agreed to when talks took longer than expected. The deadline was set for August 20, 12:01 a.m. Eastern Time. When the deadline passed, the review period ended without the Justice Department filing a lawsuit challenging the merger agreement.
“This is an important milestone in the process of joining our airlines,” an Alaska Airlines spokesperson said shortly after the review period ended. “During the Department of Justice’s review, Alaska worked closely with the Hawaii Attorney General to reaffirm and expand our commitments to the future of Hawaiian Airlines and Hawaii consumers.”
Alaska plans to create a single parent company with two separate airline brands that will operate 365 aircraft, fly to 138 destinations and employ 31,200 people. To pass the U.S. Department of Justice’s review, the airline said it was committed to maintaining the Hawaiian brand, preserving local jobs and maintaining interisland connections.
“Alaska has reaffirmed its commitment to our state and will uphold the Hawaiian Airlines brand, maintain and grow union jobs in our Hawaii, and continue to provide essential passenger and air cargo services to, from and within the islands,” commented Hawaii Governor Josh Green, MD
“I am confident that the combination of these two airlines will create a stronger company that will provide more travel options for Hawaii residents and local businesses – and increase competition throughout the U.S. airline industry,” Governor Green continued.
Given the reluctance of the U.S. Department of Justice to allow airline mergers during President Biden’s term in office, overcoming this hurdle is a significant victory for Alaska and Hawaiian Airlines.
The Justice Department was responsible for blocking a proposed merger between JetBlue and Spirit Airlines after convincing a judge that the deal would have harmed consumers. The Justice Department’s intervention has put Spirit in a difficult position, and JetBlue is seriously rethinking its strategy to improve its financial performance.
Last week, Alaska Airlines succeeded in dismissing a consumer lawsuit seeking to block the merger after a U.S. district judge concluded that the plaintiffs could not prove they would be personally affected by the acquisition.
The plaintiffs filed the lawsuit because they feared that Alaska Airlines would treat Hawaiian Airlines the same way it treated Virgin America, which it acquired in 2017. Alaska Airlines had promised at the time to keep the Virgin America brand, but stopped the business a year later.
Alaska Airlines was able to convince the court that the recent merger would not have a direct impact on the plaintiffs, and the lawsuit was dismissed.
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